A Swiss watchmaker paid Charlize Theron $3 million to promote its products. But now the Oscar-winning actress may have to pay Raymond Weil S.A. a lot more than that for briefly wearing a competitor's watch in public.

In a decision that highlights both the rewards and risks of celebrity endorsements, a New York judge said Weil could sue Theron for breaching a contract in which she agreed “not to wear publicly any other watches other than RW watches during the Term [of the contract].”

The deal gave Weil the exclusive use of Theron's image in a print advertising campaign for its “Shine” watch collection but while she was still under contract, she wore a Christian Dior watch at a film festival in March 2006. Weil sued her in March 2007, seeking $20 million in damages.

By wearing the watch, “Theron breached her covenant not to 'wear publicly any other watches other than RW,'” U.S. District Judge Colleen McMahon said in denying Theron's motion for summary judgment. “Theron recognizes as much, calling her decision to wear the watch 'regrettable.' It was more than 'regrettable;' it was a clear breach of the Agreement.”

Theron argued that any breach was “immaterial” since she only wore the watch for “about one hour of the fifteen-month contract term.” But LVMH Watch & Jewelry USA, the owner of Christian Dior, ended up using photos of her wearing it in promotional material.

“Since the essence of the contract is Theron's agreeing to represent RW exclusively during the term of the Agreement, a breach, however fleeting, that resulted in the use of Theron's image in connection with another manufacturer's watch cannot be deemed immaterial,” McMahon concluded.

The judge also said that Theron “cannot hide behind the fact that she had no control over what the photographers did with the pictures they took” at the South by Southwest Festival in Austin, Texas. “Her breach was wearing the watch,” she ruled, and

it was foreseeable to Theron –- a famous movie star -– that photographs of her would be made available for purchase and that they might appear in publications. Her lack of involvement in what happened with the pictures does not mean she is not culpable for any damage they caused to RW.

The decision also reveals how Theron has profited from her association with her other designers. Among other things,

• The French jeweler Chopard paid Theron $250,000 to wear its bling at the 2006 Academy Awards and $50,000 for the same assignment at the (obviously less prestigious) 2006 British Academy of Film and Television Arts Awards.

• A Cartier employee testified that Theron has received a $35,000 ring, a $7,500 bracelet and $8,000 earrings as “tokens of appreciation.”

McMahon has scheduled a final pretrial conference for Dec. 5. But the case is more likely to settle than go to trial –- with Theron presumably learning a lesson about always tailoring her adornments to her endorsements.

In similar cases, the skin-care company Hydroderm has sued Teri Hatcher for promoting a rival's products and Jessica Simpson settled allegations that she failed to promote Tarrant Apparel Group's denim clothing.