The summer period is usually a busy period for many sports
clubs; each club will be trying to sign their desired player/s, agents will be
looking at making the best deal for their clients and athletes will be seeking
new pastures in their career.
More often than not, such negotiations take place behind the
scenes, with the general public only knowing at the end of such negotiations
what the final price paid for acquiring the services of such player/coach was
and, in some instances, the wages being paid for such services.
Prior to such acquisition being paraded to the fans and
media, long negotiations would have been taking place between all the parties
concerned, sometimes running into long hours of the night if no deal has been
brokered yet and the deadline to sign players is looming.
Whilst it is usually the employer who would table a draft
contract to be eventually signed between the club (employer) and the
coach/player (employee), in some cases the employee himself could make demands
for certain contract clauses to be inserted in the contract, such as bonuses
and image rights.
The purpose of this article is to provide an analysis of
sports contracts by looking at the elements that make sports contracts valid as
well as to provide insight on key components to have inserted in sports
contracts and key points to keep in mind when sitting around the negotiation
table.
In order for a sports contract to be valid, there must be
four elements present, the capacity of the parties to contract, the consent of
the party who binds himself, a certain thing which constitutes the
subject-matter of the contract and a lawful consideration.
It is important that all four elements are present
simultaneously, meaning that if one of the above elements is missing or not
adhered to, then the contract can be declared null and void.
Capacity means that all persons who are not under a legal
disability, such as being a minor or interdicted, are capable of entering into
a contract.
Both parties to the contract must give their consent, which
consent cannot be vitiated in any manner, such as through fraud, violence or
error.
If the consent is vitiated, than such contract may be null
or annullable.
Every contract must have a thing (object) which one of the
contracting parties binds himself to give, or to do, or not to do. Finally, a
contract must have a lawful consideration (commonly referred to as ‘causa’),
such as ensuring not to breach one’s fundamental human rights.
A contract without a lawful consideration or founded on a false
or unlawful consideration, shall have no effect.
A sports contract is a legally binding employment contract
done in a prescribed form; i.e. a written agreement.
Key components
Once executed, it is deposited with the relevant sports
association of which the employer forms part of and should also be registered
with the national employment agency.
A sports contract should have the following key components
contained within it; the names of all the parties entering into such contract;
usually the employer and employee, the validity (duration) of the contract,
renewal rights (if any) at the end of the contract, termination clauses, the
amount of wages to be paid, when and how such wages are to be paid, whether
such wage is to be paid gross or net of tax and social security, clauses with
respect to medical injuries sustained during the validity of the contract,
dispute clauses, disciplinary clauses as well as the conditions to which the
parties agree to bind themselves to, such as attendance of club events and
providing the employee with housing arrangements.
Some sports contracts could also contain clauses on the
release of the employee, especially with respect to players, benefits, such as
being provided with a car, as well as bonuses connected with final league
positioning.
Prior to signing a sports contract, it is advisable that any
party to such contract first consults with their lawyer to ascertain that the
terms of such contract are properly defined and lawful.
Make sure that their responsibilities and duties are clearly defined, and that all parts of the contract are duly completed and type written with no blanks left.
They need to make sure that the contract is governed by the law of a sound jurisdiction, preferably the jurisdiction in which such party is domiciled or where such performance is arising, and check that there are clauses dealing with force majeure especially in view of the ongoing COVID-19 pandemic.
They must also be sure that the other party is duly
authorised to sign such sports contract.
The parties should also ensure that each clause is clearly
understood by them, and, were needed, to ask for further clarity.
Once such contract is signed, each party should ensure that
they are provided with a signed copy for their records.
Should any amendments need to be carried out to the original
contract, such changes must be done by means of an addendum, duly signed by all
parties concerned and making reference to the original contract.
Ultimately all parties should know that the terms of any
sports contract can be negotiated by either party prior to such party signing
same.
