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Trump and NBC headed to arbitration over "breach" of contract

Many California business owners have likely heard that Donald Trump intends to take legal action against NBC for violating the terms of a contract with the Miss Universe Organization, according to his top attorney. NBC severed ties with Trump on June 29 after the presidential candidate made offensive descriptions about Mexican immigrants in a stump speech.

The Miss Universe Organization is jointly owned by Trump and NBCUniversal, and NBC's decision to end its business relationships with Trump meant that this year's upcoming Miss USA pageant telecast and next year's Miss Universe telecast were canceled. Spanish-language broadcaster Univision also pulled the plug on the pageant telecasts, and Trump has already filed a suit against that network.

Trump's attorney told CNN that he believed NBC breached the agreement by pulling out of the pageant broadcasts. However, he also said the pageant telecast contract has an arbitration clause, which Trump will follow. Such clauses, which call for disputes to be privately handled through an arbitrator instead of in court, are becoming increasingly common in business agreements.

Trump's lawyer also said the contract has no morals clause, which could have let NBC out of its contractual obligations by claiming Trump's comments embarrassed the company. The rest of the contract details are not yet known. Meanwhile, Trump has demanded $500 million in damages from Univision.

A breach of contract can lead to substantial financial losses by the injured party. Such contract disputes are often handled through arbitration. California business owners dealing with this type of an issue may find help in resolving the issue by retaining an attorney who has experience in contract law.

Source: CNN, "Donald Trump's lawyer: NBC in 'breach' on Miss Universe contract," Brian Stelter, July 5, 2015

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