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Chapter 2: Sports Contracts

Chapter 2: Sports Contracts. All Contracts. Offer Acceptance Consideration Legal purpose Capacity to contract “Meeting of the minds” “Legally binding agreement”. All Contracts and Threes…. Valid, void, voidable Predict, provide, protect Fraud, duress, mutual (bilateral) mistake

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Chapter 2: Sports Contracts

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  1. Chapter 2: Sports Contracts

  2. All Contracts • Offer • Acceptance • Consideration • Legal purpose • Capacity to contract • “Meeting of the minds” • “Legally binding agreement”

  3. All Contracts and Threes… • Valid, void, voidable • Predict, provide, protect • Fraud, duress, mutual (bilateral) mistake • K = O + A + C + (leg. + cap.)

  4. Sports Contracts • Personal Services Contracts • Mostly “boilerplate” as the result of Collective Bargaining Agreements • Those not boilerplate usually involve standard language too: sometimes referred to as sponsorship, appearance or endorsement contracts. • Salary, bonus, options • SPK: Standard Player Contract

  5. Consider: California’s Seven Year Statute • Also known as De Havilland Law • Limits the amount of time anyone can be held to a contract for personal services for a maximum of seven years • Exception: recording artists • Does De Havilland Law relate to long-term sports contracts?

  6. Minors and Contracts • More related to entertainment law contracts than sports law. Why? • Minors = those under the age of 18 • Are given special attention in California, New York and Tennessee, among other states, when it comes to entertainment-related deals • California: Coogan’s Law • New York: Child Performers Education and Trust Act • All designed to protect minor’s financial interest

  7. Statute of Frauds • Certain contracts must be in writing to be enforced • Sale of Land • Contracts which cannot be performed within a year • Guarantors (sureties) • UCC-sale of goods over $5,000 • Others….

  8. Contract Riders • Addendum to a standard contract • Bonuses listed here • For athletes: incentives-yards rushing, points scored, number of wins, number of plays. • For entertainers, the unique issues related to that artist including food, beverage, lodging and technical requirements for production are found here.

  9. Damages for Breach of Contract • Compensatory damages • Specific performance (injunction) but not likely for personal services (unique talents, abilities, and skills). • Consequential damages • Liquidated (agreed-upon) damages • Punitive: NOT available for breach of contract (sometimes called “exemplary”) but possibly available for tort actions

  10. Waivers • Valid as long as reasonable • Sometimes referred to as disclaimer, release or exculpatory clause • Must be conspicuous • Tickets to entertainment and sports contests almost never considered valid waivers of legal rights • Discussed further in Chapter 3, Sports Torts

  11. Bankruptcy • Consider bankruptcy issues in entertainment and sports contracts. (executory contracts). • Consider recent changes in bankruptcy law as well.

  12. Other Contract Issues • National Letter of Intent (NLI) program • Health club contract regulation • Coaching contracts • Professional athletes and the “hold out”

  13. Contract Drafting Clauses and Considerations • Title • Describe the parties • Term • Purpose • Duties and Obligations • Compensation • Termination • Guaranteed v. Non-guaranteed?

  14. Additional Clauses • Morals clause • ADR • Modification • Governing Law • Merger • Waivers • No compete clauses (covenants not to compete)- consider “free agency” • Exhibits and addenda

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