Quiz 1- Sport Law

Law

• a collection of rules and regulations that govern the affairs of a community and are enforced by a legal authority

-U.S. law is developed at the federal (which applies to all 50 states) and state (applies to claims within that particular state) levels

-At both levels, constitutions and all three branches of government have a specific and important role in establishing the law

Three Branches of Government (state and federal)

1) The Legislative Branch: which is responsible for enacting new laws and amending existing laws through federal or state legislatures

2) The Executive Branch: which enforces existing laws through elected officials or administrating agencies

3) The Judicial Branch: through the federal and state court systems

Four Primary Sources of Law are issued by the Three Branches of Government

1) Constitution: a document that sets forth the basic principles of government, including limits on government power

• the federal government and all 50 states have a constitution; each provides citizens many protections

2) Statutes

3) Regulations

4) Case or Common law

• These sources of law are used to develop, define, interpret, and apply the law to specific situations

Legislative Branch

• A congress (or legislature), either state or federal, is the legislative branch of the government, comprised of elected officials in the House of Representatives and the Senate.

-responsible for enacting and amending statutory laws

Statutes: written laws adopted by legislatures at all levels, including federal, state, city, county, and municipal (statutes at the local level are typically called “ordinances”)

-only valid in the area governed by the authority legislature

Ex: An Arkansas statute is only valid in Arkansas (any citizen or visitor participating in an activity in Arkansas must abide by its statutes; however, Arkansas statues don’t have any legal significance in any other state)

• The function of statutes is to create the law within a particular area

Executive Branch

• Enforces existing law through elected officials or administrative agencies, which are created by the executive branch

-when statutes require further explanation to be applied to real-life scenarios, the executive branch or an administrative agency will create regulations

Regulations: rules and administrative codes issued by governmental agencies at all levels, municipal, county, state, and federal. Although they are not laws, regulations have the force of law, since they are adopted under authority granted by statutes, and often include penalties for violations.

Judicial Branch

• Although the legislative branch creates law and the executive branch helps to enforce it, the judicial branch interprets and applies it in disputes (interprets constitutions or other existing laws through federal and state court systems)

Case law: when a court decides in a case and authors a written opinion

Common law: the collective body of case law

-these cases help develop patterns called precedent and are important sources for sport and recreation managers

Precedent

Precedent: exists when a reported opinion of an appeals court establishes the legal rule for future cases involving the same legal question

Two types of precedent

Binding precedent: exists within a specific court system and must be followed by all courts within that system at the same or lower level

Persuasive precedent: can come from any court system

Court System

• a structured collection of individual courts, each court being an “organized body with defined powers, meeting at certain times and places for the hearing and decision of causes and other matters brought before it”

-Multiple court systems can apply the laws

The Primary Court Systems

1) Federal Court Systems

2) State Court Systems

3)Administrative Court Systems (Executive Branch) *

• Vast majority of recreation and sport is in federal and state cour

Federal Court System

District Court: the courts of origin in the federal court system

-if a lawsuit is filed in the federal court system, a district will be the first to hear the case (94 district courts in the U.S.)

• The middle tier in the federal hierarchy is the circuit courts (two geographic circuits and a separate circuit for the District of Columbia)

• The highest tier in the federal court system is the U.S. Supreme Court (USSC)

State Court System

• Each state has its own court system, most states also use the hierarchal approach, separating the courts into three levels

-Most states have trial courts of either limited or general jurisdiction, appellate courts, and a supreme court

• The country courts hear a variety of cases, including those w/ alleged damages under $15,000; the district courts hear civil cases in any amount (and, uniquely, serve as an appellate court for the county courts)

• District courts do not have juries; rather, trials are by judges only and cover civil claims up to $30,000 and other civil and criminal matters

• Circuit courts handle major civil cases, along with more serious criminal matters, and do allow for trial by jury

• In the appellate courts, the court of special appeals serve as the intermediate appellate court, reviewing cases from the trial courts; the court of appeals (aka the “Supreme Court” in other states) is the highest court and hears cases almost exclusively based on certiorari

Certiorari: an order of a higher court to a lower court to send all the documents in a case to it so the higher court can review the lower court’s decision

Administrative Court System

• The executive branch of government includes administrative agencies that create regulations, or rules to operationalize statutes created by legislatures

-Administrative courts sit as fact-finding bodies that apply these regulations

-When disputes arise regarding the implementation of the regulations, evidence is presented to an administrative law judge, who will make a decision

-Selecting the proper court system requires a determination of which court has jurisdiction

Jurisdiction

Jurisdiction: the ability to hear a case and provide remedy

• A court must have both personal jurisdiction, which is power over the parties in the case, and subject matter jurisdiction, the power to hear the type of case

Personal Jurisdiction: to determine if this exists, the court will consider such factors as location of the parties, location of property, or consent to personal jurisdiction by the defendant.

-Usually in the federal court system, a district court determines whether personal jurisdiction exists by using the procedural rules of the state in which it is located

Ex: A federal district court in Michigan will follow Michigan procedural rules

Subject matter jurisdiction: a) the claim must arise from federal statutes or the U.S. constitution (federal question jurisdiction); b) the claim must be filed by (or against) the federal government; or c) the amount in dispute exceeds $75,000 and all opposing parties live in different states (diversity of citizenship jurisdiction). one of the following criteria must be met

• Federal courts have exclusive subject matter jurisdiction over lawsuits b/w states; federal criminal cases; bankruptcy; patent, trademark, copyright, antitrust, + maritime cases; + cases arising out of federal statutes

  • In the State court system, a court has personal jurisdiction over parties that reside in the state, conduct business in it, consent to jurisdiction or have sufficient “minimum contact” w/ the state (a court determines if a party has enough contact with the state to make jurisdiction appropriate)

The Legal Process

• Civil Procedure= Money

• Criminal Procedure= Jail Time

-Cases must be filed in accordance with a well-established legal process

Trial Phase

Standing: the legal right to file a lawsuit

Plaintiff(s): party filing the lawsuit

Defendant(s): party against whom the claim is filed

Class action: large group of people filing lawsuit collectively against defendant

Complaint: a formal pleading to the court that must state both the federal and legal basis for the claim

-it must follow specific statutory requirements regarding form

-when a complaint is filed, the court, will issue a summons, which gives the name and file number of the lawsuit and instructs the defendant to file an answer or other response

-Before filing a complaint, a plaintiff must be aware of the statute of limitations in the selected jurisdiction regarding the claim

Statute of limitations: the maximum amount of time that a potential plaintiff can wait before filing a legal claim; these statutes can vary by court system, both state and federal

Answer: a pleading to the court that responds to each allegation in the complaint

-a defendant may deny the claims, admit the claims, or do either in part

Discovery: when both parties gather facts and information to be used as evidence in a trial

-includes requests for documents, requests to admit facts into evidence (declarations), and depositions (statements given by parties to the case under oath)

-Opposing counsel has the right to discover any material reasonably related to the case

Motions: formal requests made to the court seeking a specific action or decision

-can be made before or after

• Motion for judgment on the pleadings, which asserts that no cause of action exists if everything in the complaint were true; Motion to dismiss, often based on expiration of the statute of limitations or filing in the wrong jurisdiction; Motion for summary judgement, which is filed when one party believes that no questions of fact are present in the case and the legal issue can be decided as a matter of law (generally not made until all discovery has been completed)

Settlement

Settlement: carried out using formal contractual agreements that are filed with the court; often times, settlement agreements are not made public and only the parties to the case know the final result

Alternate Dispute Resolution (ADR): Arbitration or Mediation

-these formalized resolution processes are intended to reach an outcome yet avoid litigation

• The parties may opt not to settle or use ADR and proceed to trial, seeking adjudication

Damages: the monetary compensation awarded as a remedy for defendant liability

• If the defendant is found liable, damages will likely be awarded to the plaintiff

-they can be compensatory (intended to compensate for harm) or punitive (intended to punish the wrongdoer + deter similar future acts) and vary based on the specific claim and individual outcome of each trial

Appellate Phase

• After of trial court adjudicates a claim, either party has the opportunity to file a notice of appeal, requesting that the appropriate appellate court review the case

• Appeals are requested based on legal error- a misinterpretation or misapplication of the law (neither party has the right to appeal simply because they disagree w/ the trial court outcome)

Business Structure

• One of the first, and perhaps most important, decisions a sport or recreation business owner must make is how to organize or structure the new business

Sole Proprietorships

• The most common business structure in the U.S and the easiest one for an individual to start and maintain

-unincorporated business, owned by one individual that has no legal existence apart from the owner

-no paperwork needs to be filed w/ the state; the courts will automatically view the businesses under a separate name, however, even sole proprietorships should file DBA

DBA: stands for “doing business as” and identifies your business’s trade name

-if you fail to do this under your SP, the legal name of business defaults to your name

Advantages: Low cost and ease of formation; Owner has unlimited control; No business or corporate taxes to be paid or additional tax forms to fill out

Disadvantages: No legal existence apart from owner; Unlimited liability; Limited access to capital; Limited lifespan of the business

Partnerships

General Partnerships: an association of two or more persons to carry on as co-owners of a business for profit

-Unless otherwise stated in a partnership agreement, the partners will share in the profit + losses of the business

-it’s important to help avoid future disagreements to have a formal written partnership agreement so that all partners understand their rights, obligations, how profits and losses will be shared

Advantages: Low cost and ease of formation; Conduit or pass-through taxation; Partnership pays no tax

Disadvantages: Fiduciary duty toward other partners (act in best interest); Unlimited joint and several liability; Prohibited from selling/transferring shares despite consent (must dissolve and create whole new partnership)

LLP (Limited Liability Partnership)

• LLP is basically same thing as a general partnership

-under an LLP, partners who did not participate in the wrongdoing receive limited liability w/ respect to the negligence, misconduct, or malpractice of another partner

• In exchange for this protection, states require that the LLP register with the state, pay a fee, and keep certain minimum capitalization or insurance to ensure that the LLP has the funds available to meet their legal obligation in a lawsuit

Limited Partnerships

• Limited partners enjoy limited legal + financial liability for the debts and legal obligations of the partnership

-limited partner is usually only involved as an investor

-if they do become involved in the management of the business, they forfeit their status as a limited partner and become a general partner

Limited Liability Limited Partnership (LLLP)

• Just like LLP, LLLP is intended to provide general partners in a limited partnership protection from personal limited liability for the wrongdoing of other general partners

-no partner is personally liable for the business debts of the partnership

Corporations

Basic Characteristics of all Corporations

1) Must file “Articles of Incorporation” w/ Secretary of State in the state of incorporation, which is usually the state in which the business is located

2) Treated as separate legal entities w/ many of the same legal rights as an individual

3) Because it is a separate legal entity, it can be sold or transferred through the sale of stock (makes changes in ownership simple)

4) The life of a corporation is unlimited

5) all corporations provide the owner or shareholders w/ limited liability for corporate obligations

-the only legal or financial liability of the owner or shareholder is the money they invested into the company

Disadvantages: Cost, formal legal requirements, state + federal rules + regulations, double taxation; More paperwork + record-keeping; Pay taxes on the income of the business (Shareholders must also pay taxes on any distributed dividends); Expense of hiring an attorney

C Corporations- tax decision

• C corporations are the most common form

-they may have an unlimited number of shareholders + issue more than one class of stock

-when considering this remember all taxes are subject to double taxation for shareholders

• Investors love C corporations because of greater access to capital

S Corporations - tax decision

• A corporation can also elect to be taxed under subchapter S of the Internal Revenue Code (IRS)

• To be eligible, corporations must have fewer than 75 shareholders, may not have shareholders who are nonresident aliens, + may only issue one class of stock

• Shareholders can elect to be taxed under conduit or pass-through taxation approach that is similar to partnership or proprietorship

Limited Liability Corporation (LLC)

• LLC’s combine the best of both partnerships and corporations

-provides greater flexibility in management of the business + has less-restrictive ownership requirements

• Not limited to individuals, can include partnerships, corporations, other LLC’s, + foreign entities

• Provides important protection from federal antitrust law

• If the members (partnership) manage the business, each has the same ability to bind the entire business through their acts

• If the members (corporation) manage the business, members do not have the ability to bind the entire business unless they are in the designated group managing the business

Advantages: Pass-through taxation; Limited liability; Unlimited # of Shareholders; Stockownership open to partnerships and corporations; Protection from Federal taxes

Disadvantages: Limited Legal precedent; Conversion expense

Ex: Major League Soccer

• LLC’s file Articles of Organizations

Publicly Traded Corporations

• The main reason for “going public” w/ your business is financial (must be a corporation) *

Disadvantages: 1) The organization must comply w/ all Security and Exchange Commission rules and regulations; 2) Must make full financial disclosures concerning profits + losses; 3) Common shareholders are owners of the corporation, they have certain rights, such as voting on the makeup of the board of directors + attending annual meetings; 4) added costs to the organization (annual board meetings, create + mail annual financial reports, assign staff for investor relations, + incur added legal costs)

Non-profit Corporations

• The major difference between for-profit and nonprofit is that nonprofits do not pay taxes

• Another difference is that nonprofits do not have shareholders or owners of any kind

-they can make a profit, but it can’t be distributed to members

• To qualify a nonprofit must be formed to benefit a) the public, b) a specific group of individuals, or c) its membership

Ex: Green Bay Packers, Syracuse University, the U.S. Olympics Committee, Sierra Club, the LGPA, etc.

Two types of nonprofits

1) eleemosynary (charitable): public benefit + religious (private schools + universities)

2) Mutual benefit: private clubs

Benefits of nonprofit: limited legal liability, being exempt from most federal and state taxes, special advertising and postage rates, free radio and tv public service announcements, + exemption from certain labor law requirements

• For a business to be recognized as a nonprofit, it must file the required forms + meet the established legal requirements

Public Corporations

• These are usually municipalities, such as cities, towns, and villages, but are sometimes formed by special legislative acts to perform some special purpose

-In forming a formal corporation, Congress hopes to take the org. + its operation + finances from the governmental sphere of influence and place them in a more businesslike structure

Ex: National Park Service

Litigation

• The process in which judges and the courts or other administrative agency, such the National Labor Relations Board, decide cases

Alternate Dispute Resolution

• refers to all legally permitted processes of dispute resolution other than litigation

-Three of the most forms of ADR, are negotiation, mediation, and arbitration

• ADR mechanisms are established to settle disputes outside the courts

Fundamental Concepts

Benefits of ADR: Reduced costs (no attorney fees, limited discovery); faster/less time in dispute; greater flexibility in outcome, sides can find creative solutions instead of win/loss; proceedings and outcome can be kept confidential; ADR panelists frequently special in the types of disputes they hear/decide

Limitations of ADR: Although decisions are in writing, they do not create legal precedent; Limited opportunity for appeal (in most cases appeals are only granted for arbitrator bias, or fraud); Enforcement of decisions is voluntary unless bound by contract (ex: collective bargaining agreement); Absence of procedural safeguards if an arbitrator makes an error of law or fact; ADR panelists are usually appointed by one side of the dispute- calling their independence into question

Benefits of Courts: Established legal precedents; due process allows time for discovery of all the facts; enforcement of decisions is backed by the state; everything is public- no hidden deals; decision rendered by independent judges- not involved in sports

Limitations of Courts: Expensive- attorney fees and court costs; can take considerable amount of time to reach a decision; no flexibility- one side wins, one side loses; Because everything is public, the sides are more adversarial; Decision rendered by nonexpert jury or judge

Arbitration

• Arbitration is a process for the settlement of disputes that is based on a combination of private and public law

-the private law component is contract law: the basis for requiring parties to arbitrate

-the public law component is statutes that govern the use of arbitration in lieu of judicial proceedings to adjudicate disputes

• A dispute is submitted to an impartial third party or arbitrator, chosen by parties to the dispute, who listens to the issues of the dispute and then reaches a decision or award

-Arbitration differs from negotiation + mediation in that arbitrator is not concerned with reaching a decision that is agreeable to the disputing party but instead will decide the dispute in favor of one of the parties

• In 1925, Congress passed the Federal Arbitration Act, established to reverse the judicial hostility to arbitration agreements as an alternative to litigation

• In 1955, many states began to adopt the Uniform Arbitration Act (UAA), which established a set of procedures and policy standards for arbitration

Voluntary Arbitration

• the arbitration is mutually agreeable to both parties and may be binding or nonbinding, as determined in advance by the parties or arbitration agreement

Mandatory Arbitration

• the parties are often required to use arbitration as their sole method of addressing unresolved grievances according to the arbitration clause, and the decision is typically binding

5 elements of arbitration agreements

1) Demand for arbitration. A written demand identifying the parties, dispute, and relief or remedy sought must be submitted to the opposing party. The arbitration request is less formal than writing, but the issues to be arbitrated must be clear

2) Response. The opposing party typically responds in writing, stating whether they agree that the issue is subject to arbitration under the existing contract or other relevant documents

3)Selecting of arbitration panel. There are two common approaches to determining the arbitration panel; either the disputing parties agree on an arbitrator, or they each select one arbitrator and a third impartial arbitrator joins them to form an arbitration panel

4)Arbitration hearing. Arbitration hearings allow for the presentation of witnesses, documents, briefs, and closing arguments; the process differs from a trial in that written transcripts are not always provided

5)Decision. After hearing from all parties, the arbitrator renders a decision or award. Although the decision is usually binding, it may be vacated if a) the award was procured by corruption, fraud, or undue means; b) there was evidence of partiality or corruption in the arbitrators; c) the arbitrators were guilty of misconduct in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced; or d) the arbitrators exceeded their powers or so imperfectly executed them that a mutual, final, + definite award on the subject matter submitted was not made

Negotiation

• refers to a consensual bargaining process in which participants

try to come up with a mutually satisfying agreement on their own or through representatives (sports agent)

-In business and in sports, negotiations are used to informally resolve disputes and complete transactions such as labor contracts (they are more flexible than the courts and other ADR courts)

Four Basic Steps

1) Planning how you will approach the other parties (it is important that you establish a resistance or walkaway point, which is the point you will not go over or under and will end the negotiations)

2) Exchanging information and requests (it is important that you understand the goal of the other side)

3) Offering and Counteroffering concessions and compromises

4) Reaching an agreement that is mutually acceptable to all parties

Bargaining Range: assuming some overlap between what you are willing to accept and what the other side is willing to pay

Two types of negotiating styles

Distributive Bargaining: used as a strategy to distribute fixed resources, such as money, resources, and assets, between the parties

• AKA the “zero-sum negotiations” because the assets or resources that need to be distributed are fixed

-in this style of negotiation, as there is a winner or loser, the aim of each side is to win as much as they can from the other

Integrative Bargaining: negotiations are based on the basic premise that both sides can often reach a better outcome if they work together rather than assuming that their interests are necessarily antagonistic

• AKA “positive-sum negotiations”; instead of looking at how to divide an asset, negotiators work together to achieve an agreement beneficial to both parties by creating value through discussing multiple issues

• require that the parties collaborate, share information on their goals + trust that the other party will not try to exploit the information

• with emphasis on relationship building, this style is a better approach when the parties have a long-term relationship and know that they will be involved in future negotiations

• the purpose of integrative bargaining is to achieve a win-win outcome.

Mediation

• The parties in negotiations often express frustration and difficulty, as they usually have opposing views, conflicting goals, and even personal antagonisms that make negotiations difficult

-although negotiations only involve the parties and the agents (lawyers), mediation adds an independent third party; the mediator

• Mediation, therefore, is facilitated negotiation

• Unlike arbitration, however, mediation is a nonbinding process, and the mediator has no power to impose or force a solution. That does not mean that they are w/o authority. Just having an outsider involved will often promote the parties seek an agreement

-as the mediation is nonbinding + voluntary, either party or the mediator may terminate it at any time

• In some cases, the parties agree to use the mediator as the arbitrator. Called a “med-arb proceeding,” the process provides the mediator/arbitrator addition power to settle the dispute

• Mediation is a good choice for people who seek ongoing relationships

• In 1947, the government created the Federal Mediation and Conciliation Service (FMCS), it is the nation’s largest public agency for dispute resolution and conflict management in the private, public, and federal sectors

-FMCS is tasked with mediating labor disputes around the country; it provides training and relationship development programs for management and unions as part of its role in promoting labor-management peace and cooperation

Collective Bargaining

• Under labor law, once a group of employees votes to join a union, the employees have the right to collectively bargain (negotiate), with their employers over the terms and conditions of their employment

-The final agreement reached by the two sides is called a “collectively bargain agreement” (CBA)

• In some labor matters, the CBA may mandate that certain disputes be resolved through mandatory arbitration or that medication may be sought by either party

ADR in College Sports

• In the contest of intercollegiate sports, NCAA has used ADR approaches to resolve disputes in limited cases

ADR in Recreation

• Arbitration agreements now commonly appear in waivers and service, requiring signers to pursue arbitration, not litigation

ADR in International Sports

• In international sports settings, disputes present several unique issues, such as jurisdiction, choice of law, and the need for nearly immediate decisions

-Because of the issues, the Court of Arbitration for Sport (CAS) was established in 1984

-Consists of three divisions: Appeals Arbitration, Ad Hoc, + Ordinary Arbitration

• CAS will use Swiss law or the law of the country where the involved sport federation is located

-Also has a mediation division, but this is typically only used to settle contractual disputes

-Disputes related to disciplinary matters, such as doping issues + corruption, are excluded

• CAS created an ad hoc division with the task of settling any disputes arising during the Olympic Games withing 24-hour time limit

-In addition to the Olympics, ad hoc divisions have been created for the Commonwealth Games, UEFA European Championship, + FIFA World Cup

End of Quiz 1

Tort

• an act or omission that cause injury or harm to another; it is a civil wrong for which one can’t be liable

Negligence

• an unintentional (accidental) tort that injures a person, property, or reputation

Two forms of Negligence

1) Acts of Omission: Something one did not do but should have done

2) Acts of Commission: Something one did but should not have done

Elements of Negligence

1) the defendant owed a duty of care to the plaintiff

2) the defendant breached that duty the plaintiff

3) the defendant’s action was the proximate cause of the breach of duty, sometimes referred to as the “substantial factor” or “but for” test for causation

4) the plaintiff suffered damages

*All 4 elements must be present to prove negligence

• must be reasonably foreseeable

Foreseeable: involves one’s ability to predicts what will occur as a result of his or her action (commission) or inaction (omission)

Three Origins that create a duty

1) a relationship inherent in the situation (lifeguard/swimmer; coach/athlete)

2) A voluntary assumption of the duty (passerby administers CPR)

3) Mandated by statute (law requiring ambulance + doctor of high school football games)

Duty: refers to the legal responsibility owed others

Gross negligence

• Gross negligence means the defendant acted with extreme carelessness

• Recklessness means that they were so lacking in care that one could characterize the misconduct as intentional

Two types of Damages

1) Punitive Damages

2) Compensatory Damages

• Damage that includes compensation: Economic loss, Physical pain and suffering, physical suffering, and emotional strain

Damage is the actual element of negligence

Damages is the monetary compensation sought or rewarded as a remedy for a negligent act

Potential Essay Question* (pg. 47,52)

• The Doctrine of Respondeat Superior (or Vicarious Liability) states that the negligence of an employee is imputed to the corporate entity if the employee was acting within the scope of the employee’s responsibilities and authority.

• Corporate entity is Not responsible if the negligence of an employee goes beyond the scope of the employee’s responsibility authority (“Ultra Vires Acts”)

Which parties are liable?

1) Employees/Service personnel

2) Administrators/ Supervisors - not liable for negligence of subordinates, but are for their own negligent act

3) Corporate Entity

Indemnification

• An agreement by which one party agrees to indemnify, reimburse, or restore a loss of another upon the occurrence of an anticipated loss (aka hold harmless agreements)

Express vs Implied

Express: written or said

Implied: based upon actions or happened before

Defenses against Negligence

• Common law is derived solely from the prior judgements and decrees of the courts

• Contract law governs the rules regarding binding agreements between parties

• Statutory law is created by acts of legislative body

- Such law requiring or prohibiting specific acts or actions may apply to individuals, public recreation and sport entities, or private recreation and sport entities

Common Law

1) Elements of Negligence Not proven: the best defense against a claim of negligence is that one or more of the elements required is not present

2) Implied Assumption of Risk: the defense of implied assumption of risk is applied when the plaintiff, the injured party, voluntarily consents to exposure to those risks inherent in an activity

• Elements: risks must be inherent to the sport or activity; the participant voluntarily consents to be exposed to the risk; participant knows and appreciate the inherent risks of the activity

Common law defenses: Ultra Vires Act; Elements of Negligence Not Proven; Implied Assumption of Risk

Contract Law (private law)

Waivers of liability: participant releases the business from liability for negligence by the corporate entity or its employees

Statutory Law

Pure comparative fault: the award to the plaintiff is reduced by the percentage of fault assigned to the plaintiff

Modified: the plaintiff is not entitled to any recovery if the plaintiff is substantially at fault (50% of more)

Volunteer Immunity: seeks to encourage people to volunteer for nonprofit organizations

• Statute of Limitations

Intentional Tort

• a misdeed, or wrong, in which the actor possessed intent or purpose to cause injury of some sort

Assault

• Assault and Battery has both civil and criminal aspects

Assault: the “touching of the mind, not the body”, is the threat of harmful or offensive touching

To prove assault:

1) intentional conduct on the part of the defendant

2) that caused reasonable apprehension on the part of the plaintiff

3) was imminent harmful or offensive contact

• Reasonable apprehension of the imminent contact= knowledge that the contact is coming

Battery

Battery: is the actual harmful or offensive touching

To prove battery:

1) intent to touch on the part of the defendant

2) that caused harmful or offensive contact to the plaintiff

3) the plaintiff did not consent to the contact

• The contact does not have to be body to body, meaning that a part of the body of the defendant does not have to touch a part of the body of the plaintiff

- Contact can occur if the plaintiff causes an object to touch the body of the plaintiff

Two types of defamation

1) Slander: defamatory comments made verbally

2) Libel: defamatory comments or photographs made in writing/print

Actual malice vs Negligence

• Under common law, the standard for proving fault or negligence varies depending on whether the person about whom the comment was made is public or private

Private figures: Individuals who are not employed as public officials or involved in public issues; Since private figures do not have the same access to the media and do not have the same opportunity to the refute defamatory statements, they only need to prove an alleged defamatory statement was negligently made (negligence)

• Public officials, general purpose public officials, and limited purpose public figures all must prove actual malice

Defenses against Defamation

1) Truth

2) Privilege: a defendant cannot be punished for making a defamatory statement if ensuring that it is made is more important than preserving the plaintiff’s reputation

3) Statute of limitations

Tortious Interference with Contract

• is a claim that one party intentionally caused or attempted to cause a second party to breach the second party’s contractual obligations

Ex: Tampering: when one team attempts to lure a player who is clearly under contract to another team

Contract Law

• a formal term to describe voluntary agreement that imposes duties and benefits upon the parties; it is a promise or a set of promises for which, if breached, the law provides a remedy

Three sources of Contract Law in the U.S.

1) Common Law Principles (Judiciary) {primary source}

2) Uniform Commercial Code (UCC) - legislative {primary source}

3) Restatements of Contract

Common Law Principles

• Common Law is created by court decisions involving similar issues

- Examples of agreements in the recreation and sport industry governed by the Common Law of Contracts include coaching contracts, scholarships agreements, fitness center memberships, and other contracts to purchase services

Uniform Commercial Code (UCC)

• UCC governs contracts for the sale of goods; set of statutory laws drafted by legal scholars to create uniform commercial laws nationwide

- Goods include tangible property that is moveable when purchased

Mixed Sale: when an agreement includes both the purchase of a service and a good

Restatement of Contracts

• Secondary source of law

• it lacks the legal authority held by the common law and UCC, but it looked at for guidance

Express Contract

• the parties clearly state the terms of their agreement, verbally or in writing

- the terms of an express contract include, at minimum, the parties’ identification and the contract's subject matter, length of time, and cost for each party

Implied contracts

• Occur when the conduct indicates that an agreement exists (aka quasi contract), yet there is no written proof of a formal exchange of promises

Classification of a Contract

Valid: it enforces it or grants some other relief to the nonbreaching party (a court does not enforce a contract that fails to meet the legal requirements or is contrary to some other rule of law)

Void: meaning neither party is obligated to perform

Voidable: which provides one party the option of canceling the agreement (courts generally deem contracts signed by minors {those under age 18} with no accompanying parent consent as voidable by the minor, provided the minor did not affirm the contract as an adult)

Contract Formation

1) Agreement (Mutual Assent): The first step in creating a valid and enforceable contract is to confirm that the parties mutually assent to the fundamental terms.

• Courts determine mutual assent by considering whether the parties had the same understanding of the material terms of the agreement, starting with the offer and acceptance

2) Offer: An offer is a conditional promise from the offeror (the party who make the offer) to the offeree (the party to whom the offer was made)

• An offer occurs when one party demonstrates a willingness to enter into an agreement with definite terms that leaves another party in a position to respond

- Definite terms include (a) the parties, (b) the subject matter, (c) the time and place for the subject matter to be performed, and (e) the consideration or price

• Unilateral offer involves the offeror making a promise to the offeree if the offeree takes some specified action

• Bilateral offer an exchange of promises

3) Acceptance: The offeror is not bound and an agreement not formed until they accept the offer. Only the offeree can accept. They can accept by signature, verbally, through performance (in a unilateral contract) or any other mode permitted by the offeror

• The acceptance also must mirror the offer

• A counteroffer, which alters the terms of the offer, is not acceptance. A counteroffer terminates the offeror’s offer and creates a new one.

4) Consideration: the exchange of something of value; it involves each party giving up something to benefit from the contract

• Agreements in which only one person is giving up something are considered gifts and will not be enforced by courts, as they lack consideration

5) Capacity: Contracts are voluntary agreements, so parties to a contract must possess the capacity to comprehend its terms and how those terms affect the party’s legal interests

• Courts do not enforce agreements in which one of parties is shown to have lacked the capacity to represent their interest effectively

• To void the contract, the party must show that, when they entered the contract, they either lacked enough mental capacity due to age or a medical condition or were so intoxicated that they could not understand its nature

6) Legality: The courts will also not enforce contracts involving illegal action or a subject matter that violates public policy

• Courts also refuse to enforce employment contracts that include overly broad covenants not to compete and covenants not to solicit (aka “noncompete clauses” or “restrictive covenants”, these provisions attempt to ability of an employee to compete against the employer if they are fired or resign

Special Doctrines of Contract Law (exceptions to the general rule)

1) Promissory Estoppel: a remedy courts will apply when an agreement lacks the requirements of a contract, but the nonetheless creates some form of detrimental reliance by one or more of the parties

• a) a promise that reasonably expected reliance, b) reliance on the promise, c) an injustice to the party who relied on the promise

2) Writing and Formality: Statutes of frauds are intended to prevent fraudulent contract claims by requiring certain agreements be reduced to writing and vary by state (required to be in writing)

• Relevant transactions common to the sport and recreation industry include contracts (a) that cannot be performed within a year, (b) to guarantee another party’s debt, (c) for the sale or lease of land, and (d) for services rendered in negotiating the purchase of a business or business opportunity

3) Parol Evidence Rule: Parol evidence consists of any oral or written terms outside the four corners of the final, integrated contract, such as earlier versions of a contract or comments or statements made during negotiations.

• To efficiently handle such evidence, courts developed the Parol evidence rule: once a contract is complete and final statement of the parties’ agreement, any prior of contemporaneous oral or written statements that alter, contradict, or add new information are inadmissible

• The rule addresses breach of contract disputes in which one of the parties references statements made in the negotiation or provisions of earlier agreements not included in the final contract as binding

Breach of Contract

• A breach of contract occurs when a party fails to perform the duties imposed under the contract

• To succeed on a claim, the nonbreaching party must show (a) there was a valid contract, (b) the plaintiff performed as specified by the contract, (c) the defendant failed to perform as specified by the contract, and (d) the plaintiff suffered an economic loss as a result of the breach

Defenses to a Breach of Contract Claim

• To defeat a breach of contract claim, the breaching party often argues that the agreement lacked one or more elements of an enforceable contract and may also argue that one or more of the parties were mistaken about the subject matter of the contract, so there was no agreement

- Mistake defenses are only successful if the breaching party can show that it was a mutual mistake and involved the subject matter of the agreement

• Generally, courts do not rescind contracts based on a unilateral mistake of the breaching party or mutual mistakes over the value of the exchange

• Courts may rescind contracts involving fraud in either the inception of the contract or in the inducement to sign in

• Another defense included in many contracts is force majeure

- These clauses are standard in most sporting event contracts and aim to address any unforeseen circumstances preventing a party from performing its contractual obligations (Ex: acts of God, natural disasters, labor disputes, terrorism, war, and governmental action)

Remedies for a Breach of Contract

1) Legal Remedies: Legal remedies are most prevalent and result in a court awarding the nonbreaching party a monetary award for the damage incurred due to the breach

• Legal remedies are divided into five categories: compensatory, consequential, nominal, punitive, or liquidated'

2) Equitable Remedies: A monetary award cannot adequately remedy certain contractual disputes. The most common forms of equitable remedies are specific performance and injunctions

3) Rescissions and Restitution: Contracts that are unconscionable or involve illegal or fraudulent conduct, mistake, or duress are often rescinded or voided by courts

• Rescission undoes the contract by requiring all parties to return the consideration provided and any benefits reaped

Elements of Employment Contract

1) Duties and Responsibilities: The contract should state that the employee agrees to devote their best effort to full-time performance as the position requires

2) Term of Employment: The length of the contract should be explicit

3) Rollover Provisions: Rollover provisions allow the organization to extend an employee’s contract for an extra year, with the mutual agreement of the employee and organization. Rollover provisions tend to be one-sided in favor of the employee.

4) Reassignment Clause: A reassignment clause allows for the removal of the employee form the originally contracted position and reassignment to another position that is consistent with their education and experience

• Employment contracts, therefore, should avoid of any language that fives the employee the right to be in any specific titled position (ex: head coach, athletic director)

5) Compensation Clause: A compensation clause should include the base salary, terms of pay increases over the time of the contract, fringe benefits, moving and relocation expenses, bonuses, additional retirement benefits, and all other compensation specifically delineated and agreed upon

• Fringe benefits: this area can include a myriad of benefits that organizations offer employees and administrators. For example, some schools include complementary cars, travel, loans, moving and housing expenses, country club memberships and tickets as part of the employee’s compensation package

• Bonuses and Incentives: Bonuses and incentives are becoming more important to all employees. They may include signing bonuses, incentives based on team success, ticket sales, and, for college and university coaches and administrators, graduation rates of student-athletes. Contracts should also be clear on when bonuses are earned.

• Sovereign Immunity: Depending on the state’s sovereign immunity rules, an employee may not be able to sue, even for an alleged breach of contract

- In states that still have sovereign immunity, therefore, it is incumbent on employees to include an expressed waiver in the employment contract

• Provisions for Outside and/or Supplemental Income: These outside sources of income may include radio or television contracts, endorsements, shoe, apparel and equipment contracts, income from speeches and written materials, and camps.

- The organization should include in the contract that it is not legally liable for claims arising from these sources and retains all right of final approval for any outside income sources.

6) Termination Clause: A termination clause states when an employer may terminate a contract for “just cause”

• In coaching contracts, “just cause” termination may be caused by violation of league or NCAA rules or morals/criminal conduct

• Should also spell out the due process rights employees have to challenge their termination. This could include a formal hearing within the organization or an arbitrator

7) Buyout Provision: To solve problems involving terminating an employee, employment contracts should contain a liquidated damages or buyout clause. A buyout provision allows the employee or institution to terminate the contract for a preagreed specified amount of money

8) Arbitration Agreement: An arbitration agreement is a clause that stipulates that if any dispute arises from the interpretation of the contract or other factors concerning the contract, the issues will be dealt with through arbitration

9) Covenant Not to Compete: Covenants not to compete are also commonly used in coaching contracts. The purpose of the clause is to protect the competitive advantage of the school while not overly restricting the coach’s future earning possibilities.

• If the clause is too restrictive in scope or time, courts will refuse to enforce it