Gamerco SA v. ICM/Fair Warning (Agency) Limited

ICM/Fair Warning (Agency) Limited (defendant) organized a European tour for the music group Guns ‘n’ Roses (defendant). The tour was for 53 days. The tour required hiring over 100 support personnel. The tour also required chartering a Boeing 727, 12 large trucks, and five sleeper coaches for the entire 53 days. ICM and the music group contracted with Gamerco SA (plaintiff) to promote the group’s appearances in Spain, including a July 4 concert in Madrid. Under the contract, Gamerco would erect the stage and prepare the venue for the concert, and Guns ‘n’ Roses would appear and perform for 90 minutes. The contract guaranteed ICM and Guns ‘n’ Roses either $1.1 million or 90 percent of the net door receipts for the Madrid concert, whichever was greater. Gamerco paid an advance of $412,500 towards this ultimate payment. However, on June 30, engineers discovered problems with the chosen venue. On July 1, the permit to use the venue for the concert was revoked. Despite efforts to locate an alternative venue, nothing suitable was available, and the concert was canceled on July 2. Gamerco sued to recover the advance payment of $412,500, arguing that the contract had been discharged by frustration. Both defendants argued that this amount should be reduced by the expenses that they had incurred to fulfill their part of the contract. In support of this claim, the defendants submitted evidence of their total tour expenses, and then allocated two of the 53 tour days as expenses for the Madrid concert. The defendants also submitted other expenses, like hotel room costs for July 3 and 4.