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Rory McIlroy, Nike Sued by Oakley for Contract Breach

By Andrew Lu | Last updated on

The world's No. 1-ranked golfer Rory McIlroy is being sued by Oakley after the 23-year-old signed an endorsement deal with Nike.

Oakley claims that McIlroy breached his contract with the company by agreeing to come to terms with Nike and dropping Oakley, reports ESPN.

The sunglass and apparel company said that it tried to use a "right of first refusal" clause in its existing contract to retain the young golfer, but McIlroy ignored the counteroffer, thereby breaching his contract.

In a breach of contract lawsuit, a court generally can award different types of monetary damages. These include compensatory damages, restitution, and sometimes even punitive damages to punish a party for morally reprehensible behavior.

Oakley argues that the right of first refusal gives it the right to match any offers McIlroy may get from other companies for sporting their eyewear and clothing. So if Nike, Reebok, or some other company comes along and makes a higher offer for McIlroy's services, Oakley insists that it should have an opportunity to match and retain the popular young golfer.

However, when Nike came along and offered McIlroy an undisclosed deal (rumored to be about $200 million), the young golfer allegedly turned his back on Oakley even though the eyewear company asserts it made a counteroffer.

Oakley's counteroffer, however, apparently amounted to about 30 percent of Nike's offer -- about $60 million, if the terms of the purported Nike deal are accurate, reports ESPN.

For his part, McIlroy's team claims they were already let out of their contract with Oakley back in September. As the two sides were negotiating a contract renewal, a sports marketing executive at Oakley allegedly sent an email to the golfer's agent that essentially said that there was no contract for 2013, according to ESPN.

If Oakley's Rory McIlroy lawsuit proceeds, a court may eventually have to take a swing at whether a late-night email by a single Oakley marketing executive was enough to cancel McIlroy's multimillion-dollar contract. The suit was filed in federal court in Santa Ana, California.

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