Untimely slip could cost Theron £1.75m

Raymond Weil seeks damages after actress breaks brand endorsement contract

It certainly wasn't the first broken celebrity relationship to end up in court, but Charlize Theron's split from the Swiss watch manufacturer Raymond Weil could very well turn into one of the most expensive.

The Oscar-winning actress learnt yesterday that she will have to pay substantial damages to the luxury goods manufacturer after breaking a multimillion-dollar endorsement deal by wearing other designers' timepieces. Raymond Weil is seeking $3m (£1.75m) in compensation after the South African star was photographed at a film festival showing off a watch produced by its arch rival Christian Dior during an 11-month period when she was being paid to be the "face" of Raymond Weil.

In a 32-page judgment which lays bare many of the enduring perks of a film star's existence, New York Judge Colleen McMahon ruled that Theron was guilty of ignoring the terms of her contract with Raymond Weil, most notably at a film festival news conference in Texas.

The ruling lifts the lid on the intriguing world of celebrity endorsements which has recently seen a host of prominent stars sued for allegedly breaking sponsorship deals, including the Desperate Housewives actress Teri Hatcher and the singer Jessica Simpson.

The judgment revealed how Theron was paid hundreds of thousands of dollars to wear different brands of jewellery on red carpets and in photo-shoots, and received $3m to endorse Dior perfume in a series of advertisements. In one incident, she received $50,000 for wearing Chopard jewellery to the 2006 Bafta Awards in London, and a further $200,000 for wearing two items from the firm's range to that year's Oscars. In another, Montblanc paid a charity $250,000 for Theron to model one of its silver necklaces.

However, Raymond Weil was prompted to sue Theron after the actress was photographed wearing a Dior watch during a press conference at the Texas Film Festival. Although Theron only wore the timepiece for an hour, several American newspapers ran pictures captioned "Charlize Theron wears Dior".

"By wearing a Christian Dior watch at the film festival, Theron breached her covenant not to 'wear publicly any watches other than Raymond Weil'," ruled Judge McMahon. "Theron recognises as much, calling her decision to wear the watch 'regrettable'. It was more than 'regrettable;' it was a clear breach of the agreement."

Theron's lawyers had claimed in her defence that she was guilty of an oversight rather than a deliberate fraud, and that she'd never understood the terms of her original contract. However, Judge McMahon ruled that Theron "was not an unwary agent", noting that her initials appeared 10 times on the 10-page contract she broke.

Both sides in the dispute were ordered to attend a pre-trial settlement conference on 7 November. Should they fail to reach an agreement on the level of damages, the case will go before a jury for a decision on how much loss was suffered by Raymond Weil.

It's a far cry from 2005, when the model-turned-actress signed her original deal with Raymond Weil. Back then, the company's chief executive, Olivier Bernheim, gushed that she was a "stunning and radiant woman who transcends any standard definition, and has evolved into a feminine myth, an icon".

Like a decent watch, he added, she represented "beauty, style and perfection of function," and meeting her offered "an unforgettable encounter, a moment of pure magic where time seems to vanish in the air".

Big deals: Stars in trouble

*Theron can at least reflect that she in good company. Teri Hatcher was recently sued for singing the praises of a lipgloss manufacturer, CityCosmetics, when she had an exclusive endorsement deal with its rival Hydroderm. Jessica Simpson, meanwhile, is defending a lawsuit from Tarrant Apparel, who is upset that she has failed to wear its clothes at public events.