Contracts in Sports

What is a Contract? A Contract is an agreement between parties that creates a legal obligation. Where a sportsperson enters into an employment contract with a sports team or an endorsement contract with a company, such a contract becomes binding on both parties, to mean that neither can back out before the contract ends, without them being sued for breach of contract. A sportsperson should then ask themselves what are the things they need to know about the contracts they are getting into to evade a situation. They are;

Elements of a valid contract

  • Offer – This is given to show intention to enter into a contract, and if accepted becomes binding on both parties.
  • Acceptance- After the offer is made then the person who the offer was made to, either accepts or rejects the proposed contract.
  • Capacity – The parties to the contract need to be 18 years of age or above, and be of sound mind, as a mentally disabled person lacks the capability in the eyes of the law.
  • Consideration – This is the value that induces the parties to enter into the contract and is usually in the form of money.

A contract can be declared invalid and be automatically terminated, if there was Misrepresentation by either party, e.g. whereby a person lies that they are a sports person in order to enter into a contract with a sports team when in fact they are not, or where there was Undue Influence, e.g. a sportsperson who is forced using threats or violence to enter into a contract with a sports team.

Types of Sports Contracts

Professional Service Contracts – An individual’s employment agreement agreeing to render services as a rugby, football or golf professional players for a professional sports team.

Endorsement Contracts – Independent contracts which do not require employer-employee relationship, as it grants the sponsor the right to use (i.e., license) the sportsperson’s name, image, or likeness to advertise their products or services. Such as Eliud Kipchoge’s endorsement deal with Nike who sell merchandise using his name, image and likeness.

Appearance Contracts – Sportspeople usually come across such contracts when partnering with companies such as Safaricom to appear for their public events such as Blaze.

Clauses Covered Under the Contract

Title – Identifies the nature of the Contract.

Information Clause- Provides the name and address of the parties.

Player services Clause – Refers to the type of service provided by the player.

Player obligations Clause – Contains the obligations of contracting parties towards each other, such as the rights, duties and responsibilities.

Term clause- It outlines the start and end of the contracts.

Confidentiality clause – It states that the parties involved should not disclose the information in the contract to the public

Arbitration Clause –This clause states that the parties involved can engage an arbitrator, who is a person who is not a court judge but has authority to settle a dispute, in case any issue arises.

Remuneration Clause – States how much the sportsperson will be paid for their services.

Player restrictions Clause – This states that during the contract’s time period, the player will not engage in any other sport or activity which can involve any risk of personal injury of the player e.g. participating in rock climbing activities which has a high risk of injury.

Termination Clause – A contract is terminated when it is breached, declared invalid or when its time period comes to an end. Therefore, a sportsperson has the right to terminate a contract where their sports team does not deliver on the terms agreed upon.

Remedies Clause – When a sportsperson does not do what is stated in their contract their sports team has a right to sue them, and the court will order the sportsperson to either pay the sports team an amount of money or to carry out their obligations as specified in the contract, or to do both.

Next time we take a look at ‘Taxation in Sports’. See you then!

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Written By;

Joan Kamau

Legal Expert

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