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When a contract is not worth the paper it is written on

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Roar Rookie
26th November, 2018
13

Lately, we have been hearing that league players and coaches have been walking out on their contracts and changing clubs at a bewildering rate.

Talented footballers are required to enter into many contracts: with clubs, agents, third parties and lenders which effectively regulate and secure their financial future.

What is a club contract?
It is usually a written, signed form whereby a player or coach agrees with a club to play or coach for in consideration of payment.

The contract has many terms and conditions that relate to the parties’ obligations. For example, the players have to attend training and promotional opportunities and commit themselves to playing exclusively for that club for a period of time.

There are other restrictions such as no dangerous sports (like jumping out of planes) or motor racing and not to bringing the game into disrepute. These are provisions relating to no drugs, no embarrassing behaviour (see mad Monday) and preferably no drunken orgies.

The club agrees to pay the players usually on a monthly basis, look after their health fund contributions and provide facilities to assist their training and playing.

What is an agent contract?
Most professional footballers sign with accredited sports agents. Most of them think they are Jerry Maguire but they are really professional hand holders.

Not enough of them have financial qualifications or access to top-class legal advice but they ask for and receive under their contract six per cent of all earnings.

Valentine Holmes

Valentine Holmes left the Sharks with a year left on his contract. (Photo by Tony Feder/Getty Images)

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The job of an agent is to negotiate the contracts for their client with the club or third parties. The agent should also look after the player’s future and provide the best financial and legal advice so that life after football is not a wasteland.

These earnings should set up the player for life. But how often does this happen?

What happens when a player or coach walks out on his/her club contract?
There is the difference between a club contract and the other contracts. The club contract is a personal service contract. This means that the player agrees to play only for that club.

If they do not do so there is a breach of contract. There are several remedies if a contract is breached. These remedies are damages, specific performance – which is an order from a court forcing the player to play or a restraining order preventing them from playing for anyone else.

Here is the problem. A club can’t force someone to play. If you do, the player certainly will not try his best and the whole team will suffer.

So, the first remedy can’t work. What about damages? It is not easy to calculate the loss to the club if the player refuses to honour his contract. Obviously, no play, no pay – but what else can the club sue for? So, this remedy has problems.

The last one is restraining the player from playing for another team. This involves obtaining an injunction in the Supreme Court. Most clubs won’t do this.

Let’s say the player wants to go to Brisbane in breach of contract. What happens is that the victim club says to Brisbane “unless you pay us something, we will stop the player from offering his services.”

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Usually, a deal is made. The contract is mutually terminated and both parties start again with new contracts.

There are exceptions: Canterbury threatened to injunct Sonny Bill Williams when he decided to walk out on his contract. A financial deal was worked – and bye bye Sonny Bill.

So, what is the point?
Most contracts are complied with. The players accept their legal obligation and perform them. Many of the others claim they are moving because of their partner, their mother or their dog. Whatever!

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For these social and compassionate reasons players are allowed to walk in effect ripping up their contract. It is much harder to walk away from an agent contract. There are few personal services involved; only financial obligations. Damages and injunctions can work.