Contract Law


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  • Hello everyone. My name is Jonathan Luszcz and in this presentation, I am going to summarize the second chapter of the the text, Sports Law by Patrick K. Thornton. The second chapter consists of what is a contract, aspects of contract law, standard player contracts, bonus clauses, guaranteed contracts, negotiation of contracts, endorsements, and coaches’ contracts.
  • In sports contracts are everywhere. Broadcasting, sponsorships, ticket sales, facility leases, merchandising and licensing, players, and coaches. The law of contracts comes from a variety of sources. Common law, Uniform Commercial Code or UCC, and federal and state statues structure what is contract law today. In other words, contracts are everywhere including the sports world.
  • Contracts in sport cover most of the aspects of contract law but there are some unique features that make sport contracts different than other contracts you may see in business. For example, a National Letter of Intent gives an institution, student-athlete, and the parent/guardian of the student-athlete to be exclusive to one institution and only that institution.
  • A contract is a promise or set of promised for the breach of which the law gives a remedy or the performance of which the law in some way recognizes it as a duty. In order for a contract to be a valid contract, these ‘elements’ must be satisfied.
  • The parties to the contract must be competent to enter the contract. A party could automatically void the contract if the party is a minor, under the care of a guardian, or intoxicated at the time a party enters a contract.
  • The second element is that the contract cannot carryout something illegal. It must contain something legit and reasonable.
  • The third element is that consideration must be exchanged between both parties. Both sides must get some sort of value in exchange to make the contract valid.
  • The next element is that mutuality of the agreement between the parties. So both parties agree on the terms stated in the contract.
  • The last element is that the obligations of both parties must exist between the parties. If one party breaks the obligation then the contract then the contract is not valid.
  • In the case of the Los Angeles Rams v Cannon, the NFL Commissioner Mr. Rozelle approached Billy Cannon with a contract offer with the L.A. Rams for a three year contract in order to block him off from the emerging AFL. After the interview, Cannon agreed to sign three sets of National Football Player Contract forms covering the years 1960, 1961, and 1962 and took possession of two checks, one for $10,000 and the other one for $500. A couple of weeks later, the Houston Oilers of the AFL offer him a more lucrative deal in which he signs. Cannon sent a letter following the offer by the Oilers that he did not desire to play for the Rams and returned his checks. Mr. Gunsel, commissioner of the AFL however did approve the offer which made him employed by the Oilers and not the Rams. Because he was employed and had the approval of the commissioner of the AFL and not the employed status AND approval of the NFL, Cannon won his case.
  • Every professional league use some sort of standard player contract. However, star players like Mr. Garnett here can modify the standard contract through the negotiation process to add incentives and bonuses. A standard player contract will most likely include the obligation for the player to keep himself in good physical shape and perform the services he is expected to fulfill for the team.
  • In the case of Tillman v. New Orleans Saints Club, Tillman suffered an injury during a practice drill. He sees the team doctor and the doctor confirms he can play. However, Tillman explains that he cannot fulfill his duties as a football player due to the injury. The Saints then terminate Tillman. He then sees another doctor and this doctor confirms that Tillman cannot cannot play football with this injury. The court agrees with the Saints doctor due to the explanation and nature of the injury. Therefore, Tillman was not owed the rest of his contract because Tillman would not fulfill his duties as a football player.
  • If you are good enough like Mr. KG then you may be eligible to have a bonus or addendum in your contract. Bonus clauses can include performance bonuses based on statistics, awards, signing a contract, or other incentives.
  • Houston Astros owner Drayton McLane Jr. made good on a promise that pitcher Roy Oswalt set when he was a rookie. He wanted to own a bulldozer and if he won a National League Championship Series game, McLane Jr. kept the promise true and gave Oswalt a tractor for winning Game 6 of the NLDS to bring the Astros to their first World Series in 2005.
  • Guaranteed contracts mean whatever the player is being paid, he or she will receive that money guaranteed whether that person is on the team or not. These contracts are quite rare given the nature of sport and injuries. The only way that a guaranteed contract be voided is if one of the elements of a contract is broken.
  • When negotiating a contract, one who may represent someone must know particular aspects of the procedure like the collective bargaining agreement, the standard player contract, the league bylaws and constitution, court cases that are relevant in dealing with negotiations, contracts of ‘similar players, and information in regards to player salaries and benefits. In addition, a player and his or her representative must consider contract guarantees, bonuses, clauses, injury protection, disability insurance, and renewal contract provisions.
  • Endorsements have become standard now in sports. Corporations who pick athletes to represent the company take a chance on the athlete with the possibility that the athlete may bring bad publicity to himself, translating to bad publicity on the product.
  • Just like players, coaches are under contract too. Also like players, coaches’ contracts have been very lucrative over the last 10 years both in the professional and collegiate levels. Contracts of coaches and players draw a lot of parallels. They both have the same elements but the player and the coach are not treated the same. In Coach K’s case at Duke University, he holds a position as the Head Men’s Basketball Coach. He is responsible for carrying out the duties faithfully and diligently, comply with the university rules and NCAA rules, department duties assigned by the Director of Athletics and adhere to the rules of Duke University, North Carolina, and the United States.
  • So lets wrap this up. We covered what exactly is a contract, the elements of contract law, standard player contracts, bonus clauses, guaranteed contracts, negotiation of contracts, endorsements, and coaches’ contracts. I hope you all enjoyed the presentation. I thank you for your time and consideration and will be open to answer any questions that people may have.
  • Contract Law

    1. 1. Chapter II<br />Date: September 15, 2010<br />Agreement<br />$2.3 million<br />Team Option<br />Contract Law<br />Restricted<br />Clause<br />Agreement<br />Principal<br />Void<br />Signature: Done by: Jonathan Luszcz<br />
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    4. 4. What are the elements of a contract!? I don’t want to be tricked again…<br />
    5. 5.
    6. 6.
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    9. 9.
    10. 10. V<br />
    11. 11. New contract…finally.<br />
    12. 12. V<br />TILLMAN…<br />
    13. 13.
    14. 14. WIN A BULLDOZER!<br />+<br />=<br />Oswalt wins a NLDS game, he will receive whatever goal he set.<br />Wins the game to send the Astros to the WS<br />Roy Oswalt starts Game 6 of the 2005 NLDS<br />
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    19. 19. RE<br />What is a contract?<br /> Elements of Contract Law<br /> Standard Player Contracts<br /> Bonus Clauses<br /> Guaranteed Contracts <br /> Negotiation of Contracts<br /> Endorsements<br /> Coaches’ Contracts. <br />
    20. 20. CREDITS<br /><br /> <br /><br /> <br /><br /> <br /><br /> <br /><br /> <br /><br /> <br /><br /> <br /><br /> <br /><br /> <br /><br /> <br />
    21. 21. CREDITS<br /><br /> <br /><br /> <br /><br /> <br /><br /> <br /><br /> <br /><br /> <br /><br /> <br /><br /> <br /><br /> <br /><br /> <br /><br /> <br /><br /> <br /> <br />
    22. 22. CREDITS<br /> <br /><br /><br />