As professional sports become more lucrative, more athletes are signing contracts with teams, agents and sponsors at an early age. Of course, teams have negotiated hundreds, if not thousands, of contracts, and the prospect of dealing with them may be intimidating. This is one reason why many athletes turn to sports agents and lawyers to negotiate their contracts.
Offers and Negotiations
A formal contract is entered when an offer is accepted.
If you are presented with a written contract, that is considered an offer
to enter into a contract. There are other requirements for a valid contract, but for your purposes, the “deal is done” when the contract is signed. Signing the contract is the athlete accepting the offer.
If the athlete proposes a change to some of the terms, that is referred to as a counter-offer
and a rejection of the initial offer. For instance, suppose you are presented with a written contract and, rather than sign and return it, you suggest a change to one of the provisions. That is a rejection of the offer such that, even if you were to later change your mind and sign and return the contract, the team/sponsor/employer could technically take the position you rejected their offer and there is no contract.
Keep in mind there is a difference between an offer and mere negotiations. Parties to a contract routinely discuss a number of different provisions before finally reducing their agreement to a formal contract. In the business world, this may be referred to as a proposal
or a letter of intent
that is something short of a formal offer to enter into a contract. If a team/sponsor/employer says, “We might consider an offer in the range of $100,000 a year,” that is simply a negotiation, not an offer.
An offer can be conditional. This means something else must happen before the offer can be accepted. A good example is where a party makes an offer conditioned
on it being accepted within a stated period of time. For example, suppose a team/sponsor/employer sends you a contract and says, “I am willing to pay you $100,000 a year, but this offer is only open for 24 hours.” That means at 24 hours and one second,
the offer is revoked and no longer exists. If you sign and return the contract after those 24 hours, then the employer could take the position no contract was formed. Therefore, if an offer is made with a time limit and for one reason or another you cannot make a decision within that timeframe, ask to simply extend that time. People do this in real estate deals all the time. The concept is the same.
Another important fact to keep in mind is that, if the parties are ultimately going to sign a written contract, anything verbally
discussed which is not in the written document is not
part of the deal. Therefore, you need to distinguish between what was discussed
from what is actually written down.
Contracts Involving Minors
A big issue is whether a contract with a minor
(i.e., someone under 18 years old) is even valid. This is especially important in such sports as gymnastics, swimming, tennis and, in recent years, basketball, where athletes are typically very young. In virtually every jurisdiction, minors are protected under the law from contracts they sign, generally taking the position that a minor lacks legal capacity
to enter into a contract. While a minor is allowed to enter into a contract – meaning they can bind the other party – courts routinely allow the minor to walk away from the contract or void
it. Some people think they can get around that problem by having the parent sign the contract. That may be true in some jurisdictions, but not in Arizona.
Many jurisdictions recognize an exception to this rule, where the contract is either to provide necessities for the minor (e.g., food, clothing and shelter) or where “the contract is for a purpose benefiting the minor’s employment or business” (Valencia v. White,
134 Ariz. 139, 141, 654 P.2d 287, 289 [App. 1982]). Under this rule, sports contracts might be enforceable as long as the contract is “for the benefit of the minor.” That means if the court thinks the employer/team/sponsor has taken advantage of the minor, then the contract will not be enforceable. These are judgment calls, and each case is decided on its unique facts.
But the minor cannot back out of the contract without a consequence. For example, he or she may have to return the benefits they received from the contract.
To know whether a contract with a minor is enforceable, one could file a petition with a court and ask it to approve the contract. This is done in other situations, such as where a minor is injured in an accident and tries to settle a lawsuit. The parent does not have the authority to resolve the case, but the court can approve a settlement because it is looking out for the minor’s best interest.
Of course, everyone should read a contract before they sign it. But keep in mind, whether you read it or not, once you sign the contract, you cannot back out of the deal simply because you did not read it or you claim not to have understood the terms.
At the end of the day, if you are concerned about the details of the contract, there is one paramount rule: A contract is enforced according to what the parties intended
to be the deal. That intent
is primarily determined by the words in the contract, but sometimes, words can have more than one meaning or the language itself may simply be confusing.
This means you want to make sure that both you and the other side understand the words and phrases in the contract the same way. In other words, “mean what you say and say what you mean.” Do not make assumptions that other people will understand what you mean, because if there is a disagreement between the parties it is decided in court, which means a stranger to the transaction looks at the document and decides what the parties intended. What may seem clear to you may not be clear to another person. If you do not understand a provision in a contract after reading it one time, then it probably is not that clear. Use simple words and simple phrases to convey simple concepts. There is always time to use more words and more complicated concepts.
And while you will almost certainly be presented with a prepared form contract, nothing says you cannot hand-write changes to the written contract (be sure to initial your changes). That happens in many business deals.