Grey Areas In 50 Shades Dispute

Fraudulent claim is now worth millions due to the storied success of the trilogy

27.08.2015

Expert Intellectual Property lawyers from Irwin Mitchell say that the Fifty Shades of Grey lawsuit is a reminder of the importance of signing legally binding contracts that all parties fully understand before entered into a business arrangements, but also a reminder that a contract isn’t worth the paper it’s written on if it has been induced by fraud.

This comes after news that a US judge has ordered Australian, Amanda Hayward, to set aside of fund of nearly £7m to be used to pay damages to her former business partner, Jennifer Pedroza. 

The pair originally set up a small online publishing firm, The Writers Coffee Shop, which initially published the blockbuster 50 Shades of Grey trilogy. The success of the books is well-known, and when Random House came calling the firm sold the publishing rights in a lucrative deal which would generate millions. However, after the deal was done, the firm was restructured in a way which would see all of the royalties flow to Hayward to the exclusion of Pedroza. The jury agreed with Pedroza that Hayward had tricked her into signing the restructuring documents, by misrepresenting their purpose and effect.

Unfortunately, this kind of issue is not as uncommon as people might think, as unscrupulous business owners frequently take advantage of their trusting and less savvy partners to restructure businesses to their own advantage.

Expert Opinion
"In the film Mr Grey attempts to persuade his love interest Miss Steele to sign a contract fraught with complications and this court case is a strange example of life imitating art.

The phenomenal success of the 50 Shades of Grey series, and its divisive effect for the owners of the The Writers Coffee Shop, is a perfect example of why business partners should always ensure that their arrangements are governed by clear and non-ambiguous contracts which all parties understand, and why any change to those arrangements should be carefully scrutinised, particularly if the business has really started going places."
Alex Newman, Partner