Football transfers are a legal minefield. They generally involve the conclusion of three main agreements:
- A transfer agreement between two football clubs,
- A termination agreement between the Player and the selling club, and
- An employment agreement between the Player and the buying club.
Naturally, navigating various contractual clauses and assessing the risk involved is a tedious task. However, most football clubs, at least, at the lower levels, may not have the budget for an in-house legal team to meticulously review and advise on such contracts. They instead tend to rely on template agreements, or replicate clauses verbatim from previous agreements without accounting for the specific requirements or peculiarities of the transfer deal. With the advent of Artificial Intelligence (AI) tools, this issue has worsened as it is viewed as a quick and cost-cutting solution to draft and conclude the necessary contracts and documents for a transfer deal. Moreover, even if a legal team is involved, they are generally involved after the commercial terms are agreed upon, in principle, between the Clubs and/or Club – Player. Therefore, there is often an unnecessary urgency created to complete the deal rather than negotiate over contractual clauses that could potentially pose a risk.
Such issues are also exacerbated in instances where negotiations between clubs are pushed to the very end of the transfer window as a negotiation ploy. In such an instance, there is a risk of legal oversight being hurried, or overlooked in order to complete the deal before the end of the transfer window. Clubs may tend to rely on past agreements and insert clauses verbatim without considering the nuances of the new deal and how such boilerplate clauses may not be suitable to their interests.
In the short term, all parties are satisfied, and the deal is complete.
The problem however arises when there’s a contractual breach, or when a party wants to exit the agreement but finds themselves bound by unfair and arbitrary contractual terms. This is when the importance of legal oversight and risk mitigation are realised.
With this intention in mind, this explainer is intended to provide football clubs, players and their agents, a general overview on important provisions that are often overlooked, or common mistakes, that may pose a potential contractual risk.
Part I
Employment Agreements – form, content and valid conditions precedent
| Sl. No. | Description |
| 1. | Is there a standard form of an employment agreement and what are the essential elements of an employment agreement? |
| 2. | Whether a Football Club can condition the validity of a player’s employment contract to the successful passing of a medical examination? |
| 3. | Whether a Football Club can condition the validity of a player’s employment contract to a visa/work permit being granted? |
| 4. | Whether a Football Club can condition the validity of a player’s employment contract on the issuance of an international transfer certificate? |
Part II
Employment Agreements – miscellaneous considerations
| Sl. No. | Description |
| 1. | Can a Football Club prevent or restrict a player from consulting a medical specialist of his own choosing? |
| 2. | Whether a Football Club can regulate or restrict the player from wearing football boots of different brands/sponsors that are not sponsors of the Club? |
| 3. | Whether a pre-contract can be made subject to the successful passing of a medical examination? |
| 4. | What constitutes a valid “relegation clause”? |
| 5. | What is the main difference between a “buyout clause” and a “release clause”? What are the main points for a club/player to consider prior to inserting such clauses? |
Part III
Transfer Agreements – pre-contractual requirements and essential elements
| Sl. No. | Description |
| 1. | Is it mandatory for a prospective club to inform and/or seek the permission of a player’s current club prior to contacting the player? |
| 2. | What is the general order of conclusion of agreements – a transfer agreement first and then an employment agreement? |
| 3. | What are the essential elements of a transfer agreement? |
| 4. | Is it necessary to obtain the consent of a player to a transfer agreement? |
Part IV
Transfer Agreements – conditions precedent and conditions subsequent
| Sl. No. | Description |
| 1. | Whether the validity of the transfer agreement can be conditioned to the payment of a transfer fee? |
| 2. | Whether the validity of a transfer agreement can be conditioned to the issuance of the International Transfer Certificate? |
| 3. | Whether the validity of a transfer agreement can be conditioned to the successful passing of a player’s medical examination? |
| 4. | What are sell-on clauses and what should particularly be considered in regard to such clauses? |
Part V
Essential Checklist
| Sl. No. | Description |
| 1. | Essential Checklist while reviewing/drafting transfer agreements. |
| 2. | Essential Checklist while reviewing/drafting employment agreements. |