A sports contract means a contract under which an athlete is employed or agrees to participate, compete, or engage in sports or athletic activity at a professional or amateur sports event or athletic event.
These athletes’ contracts play a significant role in defining the terms and conditions of their engagement with teams, leagues, sponsors, and other stakeholders. It further outlines various rights, responsibilities, and obligations for both parties involved. In protecting these rights, some fundamentals must be considered, which are:
Under the law, once a person is of legal age, he or she can enter a valid contract, the age of 21 is the age at which absolute and unlimited legal capacity to contract shall commence according to common law. People below this age are therefore infants for contractual transactions. However, in recent times, the age has been modified to 18. It was argued by some that the age of majority has to do with personal law and so should be governed by customary law which is the age of puberty and this might differ between people. This has been settled by the court in Labinjoh v. Abake where the court held that customary law would govern customary transactions and English law would govern non-customary transactions. However, customary transactions are now practically non-existent and so the age of majority for contracts is 21. Nothing stops that said person from signing a contract that is binding as an athlete with any team league, sponsors, and other stakeholders, the contract can be signed by an athlete that is 18, pending attaining this majority as it depends on the terms of the contract signed.
b) Terms and conditions
A contract is valid where there is an offer and it is important to know what constitutes an offer. An offer is a definite undertaking or promise made by one party with the intention that it shall become binding on the party making it as soon as it is accepted by the party to whom it is addressed. An offer should be definite, leaving no room for doubt as to the terms. There is no limit to the number of people an offer may be made to as stated by Bowen, L.J;
“an offer may be made to the whole world, and anybody interested could step forward and create a contract by accepting the offer”.
Then this goes to an acceptance, which is the unequivocal assent to the terms of an offer. Acceptance in this instance may either be by the passing of documents, by spoken words, or by conduct. Acceptance by conduct would only be admitted when it is clear from the conduct of the parties that there is an agreement with the terms of the contract. While it has been stated that the passing of documents, spoken words, and conduct may constitute acceptance, silence does not constitute acceptance. In Felthouse v. Bindley, the plaintiff made a written offer to his nephew to buy his nephew’s horse and he stated that he would assume his nephew accepted if he got no reply. The court held that such a contract was not binding as acceptance should be manifested outwardly and not just in the mind of the offeree. Therefore, acceptance must be communicated to be valid. Several situations may seem like acceptance, but upon closer inspection turn out to not be acceptance.
A contractual agreement between two parties cannot be enforced by a party that has not furnished consideration, with the only exception being a contract under seal. Therefore, a binding contract requires an exchange of promises to ensure mutual benefit.
Since consideration is a basic feature of contracts, it is important to know what exactly consideration is, and what is not consideration. consideration is passed and there is consensus ad idem between parties. Further, for a contract to be valid, there must be full disclosure of the terms of the contract by both parties. Once this is fulfilled, the contract becomes binding on all parties. The law believes in the sanctity of all valid contracts and it is enshrined in the Latin maxim pacta sunt servanda.
Without a valid contract, a professional athlete remains an amateur. There are standard contracts that athletes usually sign, although the actual terms may differ from one athlete to another, depending on the negotiation between an athlete and the club/organization.
c) Fair compensation and benefits:
Athletes, regardless of their age, should receive fair compensation that reflects their skill level, experience, and market value. In some instances, the labour rights of a professional athlete are also important in determining the type of equitable remedies available to him/her.
This is particularly important for younger athletes who might be entering professional sports at a younger age, and as such, adequate benefits, such as healthcare, retirement plans, and injury coverage, should also be included in contracts to protect athletes’ well-being both during and after their careers.
d) Trade and transfer clauses:
In team sports, contracts may include clauses related to trades or transfers to other teams. These clauses can protect athletes from sudden and disruptive team changes and give them some control over their career trajectory. A professional athlete must be mobile at all times and any restriction on his mobility must be due to his legal obligations to his current employer. Where a professional footballer owes no legal duty to a club by way of an existing contract, he can move from one club to another without hindrance.
This provision mandates the contractual parties to maintain the confidentiality of specific information and refrain from revealing it to external parties or the general public. Such a provision finds applicability in agreements between sports franchises and their athletes. It serves the purpose of safeguarding sensitive data like medical records, proprietary information, personal particulars, or financial records.
This outlines the monetary recompense that shall be accorded to an athlete or player for their involvement with a specific team or participation in an event. The clause could encompass additional rewards, endorsement agreements, medical coverage, lodging, travel disbursements, or other motivating factors.
This clause restricts athletes or teams from utilizing illicit tactics to recruit athletes from another team, ensuring fair practices. It also shields an organization from an athlete attempting to lure another member into negotiations with a different entity while still bound by an existing commitment.
h) Dispute Resolution:
The dispute resolution mechanism between both parties must be stipulated and not subject to national legislation and should be properly embedded in the athlete’s contract, stating that a dispute regarding an employment contract is to be submitted to arbitration under member association statutes or to the Court of Arbitration for Sports (CAS). Modern sports contracts typically include provisions for resolving disputes, which may involve arbitration or mediation rather than litigation. These mechanisms offer a more efficient and less adversarial way to address conflicts, safeguarding both parties rights and interests. Furthermore, ADR mechanisms can also provide a more confidential and less formal setting for the resolution of disputes, enabling parties to resolve their differences in a less adversarial manner.
2. ENDORSEMENT DEALS
Sponsorship in sports dates back to 1928, with the first deal between Coca-Cola and the Olympic Games, in the same manner, partnerships like this continue to this day. According to the British Broadcasting Corporation (BBC 2023), the inception of broadcasting in the 1950s gave companies access to a larger public, and the increased commercialization of sports quickly followed. As marketers discovered fresh and inventive ways to grab attention, inventory expanded from shirt sponsorship to advertising boards and sponsored graphics. Sports sponsorship is the financial support of a sport (be it an event, organization, or performer) by an outside entity (be it a person or an organization).
It is a business arrangement whereby the sponsor (which could be any company) gives money to the sponsee (sports team, tournament, or athlete) in exchange for a specific set of rights. The sponsor essentially uses those rights to increase brand recognition, visibility, and customer loyalty, generating favourable public recognition (PR).
This enables a professional athlete or a sports personality to advertise, promote or recommend a product or service. On the other hand, this contract grants the sponsor or company the right to utilize the athlete’s name, image, and reputation. An Endorsement Contract must state the agreed compensation, appearance obligation, duration of the contract, indemnification clause, royalties, additional clause, and any other relevant terms and conditions