Sportsmanlike Conduct: Auction House Spares Bidder From Brady’s Retirement False Start

Jack Flagg – On January 23, 2022, Tom Brady threw his last touchdown pass of the 2021-22 season in a playoff loss to the Los Angeles Rams. Brady connected with Mike Evans for a 55-yard score with 3:20 left to play in the fourth quarter. In celebration, Evans launched the ball into the stands, and a lucky fan was able to take home the ball. 

On February 1, 2022, Tom Brady, the greatest quarterback and winningest player in NFL history shocked the sports world by officially announcing his retirement in a lengthy Instagram post. The G.O.A.T. was hanging up his cleats, and he had thrown his last touchdown pass.  

On February 13, 2022, the lucky fan who took home the ball realized its value. He decided to put the ball up for auction with Lelands Sports Memorabilia and Card Auctions – one of the world’s most well-respected sports memorabilia auction houses. Both parties fully understood the ball’s value and described the item this way: “If there is any item in the field of sports collectibles that needs no embellishment, it is this historic piece: the final touchdown ball of Tom Brady’s career.” 

On March 12, 2022, the auction closed. An anonymous bidder took home his prize, spending over $500,000 for the historic piece. And, on March 12, 2022, the piece truly was historic. This ball was the last ball ever thrown for a touchdown by the best quarterback in the history of football. Everything about the ball was exactly as described . . . for about 24 hours. 

Then, on March 13, 2022, Brady took to Twitter and announced his return to football for a 23rd season. In an abrupt “un-retirement,” Brady shocked the sports world once again and probably caused the anonymous bidder’s heart to skip a beat. Brady’s return to football means that the bidder’s “last” touchdown ball is now just “another” touchdown ball out of the 624 from Brady’s career to date. 

Now that Brady’s back, experts say the ball is worth a fraction of what the bidder paid for it. According to one auction expert, the ball might only be worth only $50,000, but its value might actually be closer to $25,000. In 24 hours, the bidder’s prize plummeted over 90% in value.  

Luckily, for the bidder, Lelands has agreed to void the sale. This recent news has confirmed many experts’ speculation that Lelands was likely to return the bidder’s money in order to maintain its reputation, regardless of the legal remedies (or lack thereof) available to the bidder. Now we know that the bidder never actually submitted the payment since news of Brady’s unretirement came so soon after the auction closed. Under Lelands’ auction rules, the auction house reserved the right to either charge the balance to the bidder’s credit card or resell any items won by the bidder if payment was not received within 30 days after the date of the invoice. Lelands simply chose not to charge the bidder’s credit card.  

The bidder and his lawyer are quite pleased with Lelands’ cooperation in voiding the sale. But if the auction house had decided to demand payment, would the bidder have had a legal remedy? 

For one legal commentator, the real question was, “What did the auction house do wrong?” Dan Lust, a sports law professor at New York Law School and the co-host of “Conduct Detrimental” added, “Was there fraud in the description? Were they in cahoots with Brady and had the auction expedited so that they could sell it? No.” 

Lust makes a valid point. Lelands may not have meant to do anything wrong, here. The underlying fact, that Tom Brady was retired and therefore would never throw another NFL touchdown pass, was true at the time of the sale. Under contract law, that means there was no misrepresentation about the item being sold. If the bidder were to bring an action against Lelands for misrepresenting the football, the bidder would certainly lose. There is no fraud here.  

Did Lelands warrant that the ball was “the final touchdown ball of Tom Brady’s career” though? Lelands described the ball as such on its auction page, and the ball was purchased under that assumption. The unfortunate issue for the bidder is that both representations and warranties speak to the past and present. So long as the ball satisfied the sale description at the time of the sale, the warranty is made and there has been no breach of that warranty.  A reasonable buyer would not expect that the auction house could warrant that Brady would never un-retire or throw another touchdown pass. 

The bidder’s best chance may have been to claim a mutual mistake. Because a contract generally requires the two sides to come to a meeting of the minds, if one or both sides of the contract were mistaken about the key facts the contract is based on, there may never have been a true contract formed. 

According to section 152 of the Restatement 2d of Contracts, a contract based on a mutual mistake made at the time of the contract formation may be a defense to a breach of contract where (1) the mistake concerned a basic assumption on which the contract was made, (2) the mistake materially affects the agreement, and (3) the adversely affected party does not bear the risk of the mistake.  

For the bidder to have prevailed, he would have needed to argue that he did not bear the risk of the mistake. This would mean that his knowledge was not limited as to the mistaken facts. Under one interpretation, practically everyone’s knowledge was limited as to Tom Brady’s decision to unretire. Even Tom Brady may not have known what decision he would make at the time the auction closed. Therefore, the buyer should bear the risk of the facts changing after the sale.  

Another argument, however, is that both parties had a full view of the facts, and neither party made assumptions as to the accuracy of the facts. Both parties relied upon the retirement news that came straight out of Brady’s own mouth, and neither could have foreseen the change to the underlying facts at issue. Both sides had all the knowledge they could have possibly had.  

The more interesting legal issue here, though, is that the mistake did not exist at the time of the sale. At the time of the auction, the underlying facts were true – there was no mistake. The facts only changed immediately after the transaction occurred, which begs the next question: can a material mistake arise after a contract for sale is made?  

Furthermore, Brady has yet to throw another touchdown pass, and will not even get a chance to do so until August. The sports world is assuming the inevitable, but the facts have not yet changed to make them a true mistake in the bidder’s contract. The ball currently is still the “last” touchdown pass Brady has ever thrown, until he fires his next one.  

Thankfully, the bidder need not worry about any of these legal concerns anymore, but other active sports memorabilia bidders should be wary. With professional athletes being able to play for so long in today’s age, more of these “Bradyesque” retirement rug pulls are bound to happen in the future. It would be unwise to continue to rely on the goodwill of the auction house knowing that legal recourse for such a mistake is extremely limited. Future bidders – keep this valuable lesson close to your heart: Buyer BEWARE! (Or, at the very least, never trust Tom Brady!) 

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