Sports Law: Chapter 5

Bilateral contract

Contains two promises—one in the offer and one in the acceptance

Unilateral contract

Only one party makes a promise, the other performs an act in exchange

Elements of a contract

Offer, acceptance, and consideration

Offer definition

Conditional promise to do or refrain from something in the future

Key aspect of offer

Creates power of acceptance in offeree

Power of acceptance

Offeree can turn offer into contract by agreeing

Offer details

More details make it more likely to be an enforceable offer

Offer should include

Parties and subject matter, performance terms, and consideration

Acceptance definition

Offeree agrees to offer, creating a contract

Acceptance requirement

Must be communicated to offeror

Acceptance communication

Must follow manner directed by offer

Consideration definition

Exchange of value or benefit given up in contract

Gifts as consideration

Not valid because giving party receives nothing in return

Illegality rule

Contracts not valid if transaction is illegal

Legal capacity

Some parties (minors, mentally incompetent) lack capacity to contract

Minor contracts

Voidable by minor but binding on adult

National Letter of Intent (NLI)

Requires parent/guardian signature for minors

Oral contracts

Can be valid if offer, acceptance, and consideration are present

Typical contract provisions

Party designations, term, warranties, obligations, termination

Party designation

Written contract must clearly identify all parties

Contract term

Length of time contract exists; may use methods to calculate

Warranties and representations

Legal promises that certain facts are true

Warranties example

Teams warrant they are valid league members in lease agreements

Obligations and duties

Duties each party must fulfill, with timelines

Termination provision

Explains rights to end contract at expiration or breach

Student-athlete contract

NLI + scholarship = binding financial aid + participation commitment

Taylor v. Wake Forest (1972)

School can only give aid equal to normal cost of attendance

University obligation

Must provide aid as long as athlete remains eligible

Athlete contracts

Governed by collective bargaining agreements (CBA)

CBA definition

Contract negotiated between union and management in pro sports

CBA scope

Includes salaries, conduct, drug testing, draft rules, grievances

Uniform player contracts

Players negotiate only salary, subject to caps

Salary cap

Set as % of basketball-related income (BRI) including multiple revenue sources

Endorsement contract

Grants sponsor right to use athlete’s name, image, likeness (NIL)

Athlete agent contract

Athletes hire agents to negotiate with teams/events

Coach contracts

Include salary + revenue from camps, endorsements, appearances

Coach firing issue

Strong contracts make it hard for universities to fire coaches

Game contract

Agreement for single contest between sport organizations

Game contract considerations

Date/time, trademarks, media rights, expenses, security

Event contract

Includes game contract + facility lease, concessions, sponsorships, media

Waiver definition

Contract where participant waives right to sue for injuries

Waiver requirement

Must meet contract elements (offer, acceptance, consideration)

Waiver fairness

Based on equal bargaining power and voluntary agreement

Waivers and minors

Unenforceable if signed by a minor

Capacity in waivers

Ability of participant to understand terms

Unfair waiver

Unenforceable if forced, tricked, or unclear

Lease agreement

Contract between facility owner (lessor) and lessee

Lease parties in sports

Often community + facility district + team

Lease consideration

Typically rental payments

Nonrelocation clause

Keeps team from breaking lease and leaving facility

Seat license

Fee giving priority to buy tickets, not actual ticket purchase

Contract breach

Failure to meet obligations under a contract

Parole Evidence Rule

Written contracts prevent contradictory outside evidence

Statute of Frauds requirement

Contracts in land, >1 year performance, or >$500 goods must be written

Remedies for breach

Damages awarded by courts

Compensatory damages

Money to cover actual losses

Consequential damages

Money for indirect economic losses caused by breach

Liquidated damages

Pre-agreed amount of damages in contract

Specific performance

Court orders breaching party to fulfill duties (rare in sports)

Specific performance limits

Applied to unique items, not athlete/coach contracts

Duty to mitigate

Harmed party must reduce damages after breach

ADR definition

Alternatives to litigation to reduce cost/time

Arbitration

Neutral arbitrator makes binding decision after hearing

CAS (Court of Arbitration for Sport)

Handles international sports disputes in Switzerland

Mediation

Informal process where neutral mediator helps parties reach agreement