1. chapter 5
Contract Law

2. Contracts Coaching contracts Player contracts Endorsement agreements
Scholarships and letters of intent
Concession agreements
Lease agreements
Seat License agreements

3. Contracts Defined as, Can be:
“A promise, or set of promises, for breach of which the law gives a remedy, or the performance of which the law in some way recognizes a duty.”
Can be:
Bilateral – 2 promises (i.e., offer and acceptance)
Unilateral – 1 promise (other party performs)

4. Elements of a Contract Offer Acceptance Consideration Legality
Capacity

5. Offer Made by offeror Creates power of acceptance
May provide the way that another party can accept the offer

6. Acceptance Acceptance by the offeree or agent (not third party)
Must be in positive manner through words or conduct
Not changing terms
Recall counteroffer
Communication to the offeror
Not silence
Bilateral contracts (promise for a promise)

7. Consideration Each party must provide consideration
Must be some value or benefit given or given up by each party
Cannot be a gift, past performance, or illegal acts

8. Examples of Consideration
Money for the promise to provide a meal
Money for the promise to provide use of an arena
Promise by a restaurant to host a Halloween party in exchange for having the restaurant decorated for Halloween (decorating products and services)
An act or promise not to act (forbearance)
Promise to pay a salary for the work (acts) of an employee
Promise to release a worker from an employment contract if she agrees to not open a business in the same geographic area for a certain time (forbearance)

9. Legality and Capacity Legality: Capacity:
Even with offer, acceptance and consideration will be a contract only if it covers something legal.
Capacity:
Those mentally incompetent, minors cannot enter into valid contracts.

10. Typical Provisions Party designations Term: Length
Warranties and representations: Promises in the contract
Obligations and duties
Termination

11. College Contracts Student-athletes: Contracts with the university
National letter of intent
Scholarship

12. Employment Contracts: Athletes
League collective bargaining agreement
Contract between players (union) and owners (league)
Uniform Players Contract: Standard contract for all professional athletes in a league
Endorsement contract
Athlete agent representation agreement

13. Employment Contracts: Coaches
College and professional: Both incredibly high salaries
Benefits
Termination

14. Game and Event Contracts
Game contracts: For game or contest itself
Event contracts: Hosting overall event that may surround a game

15. Waivers and Releases Form of contract Use Invalid if signed by minor
Signed before event
Participant absolves organization from liability for injuries suffered at the event
Use
Club sports
Health and fitness
Invalid if signed by minor

16. Lease Agreement between facility owner and team or sport organization
Offer: Promise to play at facility (team)
Acceptance: Funding and maintenance of facility (city or district)
Consideration: Rent or payments (team), maintenance and revenues from use (city or district)

17. Contract Law Issues
Parole evidence rule
Statute of frauds

18. Alternative Dispute Resolution (ADR)
Arbitration:
Final and binding
Mediation:
Up to the parties to agree

19. Capacity If a minor enters a contract, contract is voidable:
Minor can ratify (make contract valid)
Minor can disaffirm
Adult under contract has no choice
Exception is disaffirmance: Words or conduct to show intent not to be bound by the contract; restitution
When age is misrepresented: “Shield, not a sword”
Intoxication: Voidable?
Mentally incompetent: Void, voidable, or valid?

20. Remedies Duty to Mitigate Suit for specific performance
Force defendant to perform specific contract terms (e.g., franchise agreement)
Refrain from engaging in activity prohibited by contract
Liquidated damages
Liquidate means to pay a debt
Monetary penalty stated in the contract
Economic loss
Loss of reputation (good will)
Actual costs due to breach of contract
Duty to Mitigate

21. Management Perspective on Contracts
Get it in writing.
Read the contract thoroughly.
Keep copies of all contract documents.
Use good faith when negotiating contracts.
Note deadlines for performance.
Ensure the performance of third parties.
Share contract information with those who need to know, and educate staff on the consequences of contract breach.
Resolve ambiguities as quickly and fairly as possible.