Last year, eHarbour signed a contract with the United States Olympic Committee and US Sailing, the National Governing Body for the sport of sailing, to sponsor the US Sailing team in the upcoming Olympics. The marketing team hoped that sponsoring sailing at the Olympics would be good publicity to promote eHarbour software. Unfortunately, the venue for the Olympic Games had to be moved to a country now known for multiple human rights violations, including the treatment of women and certain ethnic groups. There is now a lot of bad publicity about the upcoming Olympics. There have been articles in newspapers and magazines demanding that corporate sponsors pull out from the upcoming Olympics. Some members of Congress have called for sponsors to withdraw sponsorship of the Olympics. Discuss whether eHarbour can withdraw sponsorship from the Olympics without violating its existing contract with the United States Olympic Committee and US Sailing. What could defenses eHarbour assert in a breach of contract case? What are the consequences if eHarbour decides not to withdraw its sponsorship? What recommendation would you give?Background Information on eHarbourThe company Harbor provides navigation software for pleasure boats and yachts. The software uses GPS data, maps, satellite imaging, weather information, and other data to assist with navigation. The company provides an app that users can download to any smartphone or other electronic device. Daniel Hudson, Shawn Hudson, and Heidi Hudson founded the business three years ago. The company is based in Tampa, FL. Before confounding eHarbour, Daniel Hudson worked as a lawyer with his solo law practice in Tampa, where he focused on criminal law. Daniel also owns his yacht and enjoys sailing. Shawn Hudson previously served in the US Coast Guard, where he gained experience with navigation system software. Heidi Hudson is Shawn Hudson’s wife, who has many years of experience in the marketing industry. After Shawn retired from the coast guard, the three decided to form a new company to develop new navigation software for pleasure boats and yachts. Daniel Hudson runs the company’s day-to-day operations and serves as company general counsel. Shawn focuses on developing the software, and Heidi leads the marketing department.The three each own a one-third stake in the company. The company is currently formed as a general partnership agreement. Daniel has registered the name “eHarbour” as a fictitious business name or doing business as a DBA name with the State of Flordia. Sales for eHarbour software and downloads for the eHarbour app have significantly increased in recent months after a national news story featuring a yacht owner who used the eHarbour app to avoid a powerful hurricane and survive a near-death situation. Besides the three owners working full-time for eHarbour – the company currently has five full-time employees. In addition, the company uses some independent contractors for software development and other services. With business booming, the company faces additional legal questions and issues.


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