Ron Prince Seeks Punitive Damages Against Kansas State

Former Wildcat football head coach Ron Prince has filed a counterclaim against KSU for breach of contract. 

Coaches and athletes (those players that get paid (i.e. the pros), that is) are mostly paid amounts that depend on what they are expected to produce, not what they actually do produce.  The exceptions of course are with coaches/players with contracts that have bonus and performance clauses.  Still, the following paragraph in the Star article makes me wonder why KSU thought that Prince might actually be worth this much when they signed him to his contracts:

If Prince receives everything the claim says he is owed, he will have cost Kansas State more than $7 million in buyouts and damages for a three-year career that ended last season with a 17-20 record.

Of course KSU didn't know he was going to go 3 games under 0.500 in his short career when they signed him.  They also didn't know that he would only stay 3 seasons.  But wouldn't caution be the word of the day when signing a coach who hadn't been a head coach at a division 1 school?  And wouldn't caution be the word when extending his contract prior to the 2008 season (Wikipedia entry that describes the extension is here)?