Chapter 3. Sports Contracts

• Pages: 50-96

3.1 INTRODUCTION

Sports contracts are a commonplace reality in the sporting world today. In fact, it can be

argued that all sporting relationships begin and end with a contract as being the instrument

in issue.

Not only have international superstars like Usain Bolt, Brian Lara, Tim Duncan and

Dwight Yorke, amongst others, capitalized on sports contracts throughout their distinguished

careers. So too have an emerging group of regional sportspersons, including Raheem Ster-

ling, Patrick Husbands, Shelly-Ann Fraser-Pryce, Kirani James, Adonal Foyle, Daren Sammy

and Chris Gayle, amongst others, whose rapid rise to success is on account of prudent con-

tractual engagements as much as it is on account of their prodigious talent and sporting

prowess.

While Caribbean athletes have, particularly in recent years, been the primary beneficiary

of well-negotiated contracts that advance their commercial interests, increasingly, regional

coaches and agents have also cashed in, with varying degrees of success. Although the details

of contractual arrangements entered into by regional coaches and agents have generally

not been made public, it is clear that with the increasing commercialization of sports and

the related increase in the value of elite players, both coaches and agents stand to benefit

handsomely.

Notwithstanding the positive strides made by Caribbean sportspersons to date in so far as

the eective exploitation of their unique skills and expertise through contracts are concerned,

this is certainly not an area that is free from legal hiccups and heartaches. From agents thwart-

ing their fiduciary duties owed to players, to players and coaches unilaterally and prematurely

terminating their contracts with clubs, this is an area of Commonwealth Caribbean Sports Law

that ebbs and flows.

Against the backdrop of the increasing importance of contractual engagements in sport in

the Commonwealth Caribbean, and the tensions and challenges which arise in this connection,

this chapter attempts to explore the theoretical and practical underpinnings of contract law

as applied to the sporting context in the Caribbean. More specifically, it will seek to address,

from a distinctly Caribbean perspective, a number of important subject matters, including

basic principles of contract law and how they are applied in the sporting context; how sports

contracts are typically interpreted; common terms that could be found in players’, coaches’ and

agents’ contracts; how tribunals treat the breach and termination of sporting contracts; and the

remedies that are available when a suciently serious breach of a sports contract is found to

exist. It also addresses the controversial doctrine of restraint of trade as applied in the sporting

context.

While this chapter attempts to provide nuanced insights into the application of contract

principles to the resolution of sporting disputes in the region, it does not, however, attempt

to do so exhaustively. In this regard, where long-standing principles of contract law apply,

the chapter will only cursorily address these principles, though not in a manner than robs the

first-time reader of the practical application of said principles. By contrast, on more nuanced

points, the chapter provides in-depth analyses, informed not only by decided cases and legisla-

tion, but also provocative social and academic commentary.

CHAPTER 3

SPORTS CONTRACTS

Sports contracts 51

3.2 BASIC PRINCIPLES OF CONTRACT LAW

Although, in the past, sports contracts were largely oral in nature, they have increasingly been

put in writing in recent years, as both players and clubs have become more apprehensive about

losing millions of dollars as a result of a lack of certainty over contractual obligations.1

Irrespective of whether a sports contract is oral or written, certain foundational principles

of contract law invariably apply. These principles, according to the court McGill v The Sports and

Entertainment Media Group,2 eectively mean that in order for a contract to be enforceable, several

requirements must be satisfied. At the elementary level, there must be an oer by one party, and

acceptance of that oer by another party. It is only upon acceptance of an oer can there be

said to be a contract, at least in principle, though the contract’s ultimate validity is dependent on

its fulfilment of other requirements, namely intention to create legal relations and adequate con-

sideration. In the normal course of things, where professional players are involved, the require-

ments of intention to create legal relations and consideration are not in issue, since, according to

their Lordships in Walker v Crystal Palace Football Club,3 an employer–employee relationship exists

whereby the player, in consideration for payment from a club, agrees to ply his trade in accor-

dance with directions provided by the club. Things, however, become muddier in terms of the

enforcement of a contract when an amateur player is involved, particularly when he voluntarily

provides his service without receiving any consideration. In such cases, it is unlikely that it can

be said that an enforceable contract is in existence, since there would be questions over whether

there is an intention to create legal relations4 and whether there exists adequate consideration.

In addition to the foregoing requirements, it is instructive to note that, in principle, in

order for a contract to be enforceable, the terms of said contract must be suciently certain5

so that both parties understand their respective rights, roles and responsibilities, and the overall

nature and scope of the contract. In this regard, the ter ms must at least identify the parties to

the contract; the subject matter of the contract; the consideration involved or at least a method

for arriving at said consideration; and the obligations by which the relevant parties are bound.

Afuller articulation of these requirements, from a Caribbean perspective, can be found in

Kodilyne’s text, Commonwealth Caribbean Contract Law.6

Another important requirement that must be satisfied, as illustrated below, is that of con-

tractual capacity. Contractual capacity speaks to the ability of a sportsperson to enter into an

enforceable sports contract, thereby being bound by the terms of said contract, and, in this

regard, also being able to enforce said contract as against the other party.

3.3 CONTRACTUAL CAPACITY

Most players who have attained the age of majority, provided that they are not under a mental

illness or drunk at the time of entering the contract, can be said to have the requisite capacity

1 For example, see Rooney v Tyson, 956 F Supp 213 (NDNY 1997) where controversial boxer, Mike Tyson, had

orally agreed to employ his coach ‘until he chose to retire’. This raised serious questions regarding the cer-

tainty of that ter m of the contract since it was argued that it intimated an indefinite period of employment.

2 [2016] EWCA Civ 1063.

3 [1910] 1 KB 87.

4 Smith v South Australian Hockey Association Inc (1988) 48 SASR 263 (at the time the player was suspended for hitting

a hockey umpire, he was playing purely as an amateur and receiving no remuneration for his participation. As

a result, it was held that that there was no intention to create legal relations in respect of the contract between

Smith and the hockey association. In short, there was no binding contract between the parties).

5 McGill v The Sports and Entertainment Media Group (n 2) [49]–[51].

6 Gilbert Kodilinye and Maria Kodilinye, Commonwealth Caribbean Contract Law (Routledge, 2013).

52 Sports contracts

to enter into a binding sports contract. Where a minor, that is, a person under the age of 18,

proposes to enter into a sports contract, however, the question invariably arises as to whether or

not he has the requisite capacity to so contract.

It is a foundational principle of contract law that where a minor enters into a contract, that

contract is voidable at his election.7 This eectively means that, at any time before he attains

the age of majority or within a reasonable time thereafter, he can refuse to proceed with the

undertakings arising under the contract, though the other party at all times remains bound by

said contract, if he or she is an adult. This rule is intended to aord minors the opportunity to

escape the lasting binding consequences of contractual agreements that they entered into while

a minor, perhaps not at the time appreciating the nature of the decision they would have made

or the consequences associated therewith.

This general rule is, however, subject to an important exception. In short, where a minor

enters into a contract for necessaries, he or she is bound by said contract, provided that he or

she obtains a benefit from said contract. Where the contract contains terms, some of which

are beneficial to him and others not beneficial, the question is whether, taken as a whole, the

contract is to his advantage. The burden of showing benefit is always on the party seeking to

uphold the contract. Thus, in Roberts v Gray,8 where the minor had entered into a contract to go

on tour with a professional billiard player, but later reneged on his promise to do so, the Court

of Appeal found that the contract was binding on him, since it was a contract for necessaries,

and it was indeed for his benefit.

Contracts for necessaries are not restricted to contracts for food and clothing, but extend

to contracts for education, training and apprenticeship, provided that they benefit the minor.9

However, trading contracts, such as the one in Shears v Mendelo,10 which precluded a minor, who

was a professional boxer, from taking any engagements under any other management without

his manager’s consent, are not considered contracts for necessaries, and are thus voidable, at

the minor’s election.

The modern locus classicus on the question of capacity in the sporting context is Proform Sports

Management Ltd v Proactive Sports Management Ltd.11 In that case, Proform Sports Management had

entered into a representation (management and agency) agreement with Wayne Rooney, who

was at the time a little over 15years old, in 2000, for a term of two years. At the time Rooney

entered into that agreement, he did not have the benefit of legal advice. In fact, his father, Wayne

Rooney Senior, also signed the Proform agreement, under which Proform was obliged to act as

Rooney’s exclusive agent and to carry out all the functions in respect of personal representation

on behalf of his work as a professional football player in consideration of a management fee

equal to 5% on the player’s earnings under his player contract and transfers. Among other things,

the agreement obliged Rooney not to appoint any other agents, and not to negotiate playing

contracts and transfers covered by the agreement. At the time, Rooney was engaged with Everton

Football Club, which provided him with the opportunity to receive professional football training.

In June2002, a letter was written to Proform, signed by Wayne Rooney and by his parents,

which requested that the footballer be released from all obligations under the terms of the rep-

resentation agreement with immediate eect. In July2002, a similar letter was sent to X8 Ltd,

which had by then eectively taken over Proform’s business. In that letter, Wayne Rooney and

his parents indicated that Rooney had decided to sign with Proactive SportsManagement. The

7 Glenn Wong, Essentials of Sports Law (ABC-CLIO, 2010) 379.

8 [1913] KB 520.

9 ‘Children and young persons’ (Legaleze.co.uk, 2015) www.legaleze.co.uk/members/MS_children.aspx.

10 (1914) 30 TLR 342.

11 [2006] EWHC 2812 (Ch).