SPORTS CONTRACTS AND AGREEMENTS
The sports industry is a broad and dynamic one coupled with the presence of multiple stakeholders ranging from both athletes, clubs, medical personnel and sport centric companies all who make up the sports industry. These stakeholders at various stages must interact with one another so as to foster the development and improvement of the sports sector, therefore the interactions and relationships of these various stakeholders are governed by contracts and agreements which they consensually enter into with one another.
In this vain, a contract is defined by Black’s Laws Dictionary as an “agreement by which one person obligates himself to another to give, to do or permit, or not to do something expressed or implied by such agreement”. More specifically, a sports contract is one that governs the relationship and interactions between athletes, teams and other major stakeholders in the sports industry.[1] It is also important to note that these contracts, although sector/industry specific are guided by the general principles of contract law, these principles or elements include an agreement, competence of parties, consent of the parties, consideration, in the form required by law and a lawful purpose.[2]
As noted above, the contract must be created or entered into for a lawful purpose which in most cases are a plethora of purposes thus leading to the formation of different sports contract. These different sports contracts are created so as to serve a specific lawful purpose, which then takes us to the type of sports contracts that can be entered into.
TYPES OF SPORTS CONTRACTS
As earlier noted, the different forms and types of sports contracts are created or entered into for a specific purpose, therefore these contracts are categorized based on the purpose or role they seek to fulfil in the sports industry. They include:
- Professional Service Contracts
- Endorsement Contracts
- Appearance Contracts
- Insurance Agreements
- Agency Contracts
PROFESSIONAL SERVICE CONTRACTS
These are sometimes called “Standard Player Contracts”[3], they are contracts entered into between athletes and sporting entities or organization such as clubs. These contracts are generally made in boilerplate forms, this simply means the contents of the current contract can be reused in subsequent ones without making major alterations to the new contract. These contracts are further written in standard form with the use of formal languages.[4] This contract spells out the express will of the parties’ i.e. the athlete and the club, stating the roles and responsibilities of the various players or athletes in the professional sports business. In simple terms, this is an agreement or contract under which an individual is employed as a professional athlete or further agrees to render services as a player to a professional sports entity.[5]
ENDORSEMENT CONTRACTS
This is a type of contract that is made between a corporate entity who is termed a “sponsor” and an athlete or club permitting or granting the sponsor the right to make use of the image, likeness or name of either club or athlete in the course of advertisement.[6] This form of contract would include terms such as a Public appearance clause, exclusivity clause and a compensation clause[7] most importantly there is the existence of a moral clause which permits the sponsor to terminate or suspend the agreement in the event the athlete or club engages in questionable acts which would negatively affect the image of sponsor.[8] For the execution of this contract the parties need not have a prior relationship ranging from employer-employee or agent-principal relationship the parties must merely agree and consent to the terms of the agreement.
APPEARANCE CONTRACTS
This is a type of contract that is entered into by the athlete with the view of assigning him the role of making public appearance in public functions. In these contracts, the athletes are furnished consideration, usually payment for their appearance at events which are conducted by either sports organizations or other corporate entities, these events could also include tournaments or competitions. Thus it is simply an indirect contract between the player and the venue.[9]
INSURANCE AGREEMENTS
These are contracts that are entered into primarily by athletes with the aim of getting indemnification in the event of unforeseen circumstances which include but not limited to injuries or accidents. These contracts are entered into so as to ensure the safety of the athletes.[10]
AGENCY AGREEMENTS
This type of agreement is one which is between a professional athlete and a sports agency specifying the obligations of parties, the type of service to be rendered.[11] The duties usually arising from this contract include a fiduciary duty, a duty of trust and loyalty owed by the sports agency to the athlete who in turn is obligated to fully disclose information to his/her sports agents.[12]
[1] Yellowbrick “Understanding Sports Contracts: Key Factors and Negotiation Tips” (Yellowbrick.com, 3 November, 2023) https://www.yellowbrick.co/blog/sports/understanding-sports-contracts-key-factors-and-negotiation-tips accessed 3 September 2024
[2] US Legal “Sports Contracts- Basic Principles” https://sportslaw.uslegal.com/sports-agents-and-contracts/sports-contracts-basic-principles/ accessed 3 September 2024.
[3] ibid
[4] Your Legal Career Coach “Types of Contracts Under Sports Law” (YLCC, 17 November, 2021) https://www.yourlegalcareercoach.com/types-of-contracts-under-sports-law/ accessed 3 September 2024.
[5] Kima and Partners “Professional Service Contracts in Sports” https://www.kimaandpartners.com/practice-blogs/professional-service-contracts-in-sports/ accessed 3 September 2024.
[6] Ashwin “Contracts in the Sports Industry and the Clauses Covered Under it” (Enhelion Blogs, 19 January, 2021) https://enhelion.com/blogs/2021/01/19/contracts-in-the-sports-industry-and-the-clauses-covered-under-it/ accessed 3 September, 2024.
[7] Upcounsel “Endorsement Contracts: Everything You Need to Know” https://www.upcounsel.com/endorsement-contracts accessed 3 September 2024.
[8] Justia “Endorsement Agreements for Athletes & Legal Considerations” https://www.justia.com/sports-law/endorsement-agreements-for-professional-athletes/ accessed 3 September 2024.
[9] Kima & Partners “Appearance Contracts in Sports” https://www.kimaandpartners.com/practice-blogs/appearance-contracts-in-sports/ accessed 3 September 2024.
[10] Your Legal Career Coach “Types of Contracts Under Sports Law” (YLCC, 17 November, 2021) https://www.yourlegalcareercoach.com/types-of-contracts-under-sports-law/ accessed 3 September 2024.
[11] Contract Counsel “Sports Agency Contract” https://www.contractscounsel.com/t/us/sports-agency-contract accessed 3 September 2024.
[12] ibid
