Essential Checklist

The below checklist is a brief toolkit for clubs, players and their legal advisors when negotiating the transfer of a player – in particular, the transfer agreement and the employment agreement. 

Transfer Agreements

1. Identify the parties to the transfer agreement, namely, the releasing club; the new club and the player and possibly, the agent involved), and if it involves a national transfer or an international transfer. 

2. Ensure that the transfer agreement is subject to the conclusion of the employment agreement between the new club and player. It would also be prudent to subject the payment of the transfer fee to the condition of the termination of the employment agreement between the player and the former club. 

3. Identify the nature of the transfer – a permanent transfer or a loan. In case of a loan, ensure that the transfer agreement expressly details the consequences of a premature termination of the employment agreement between the player and the loanee club (i.e. whether the player has an obligation to return to the former club or not); the club which has to pay the wages of the player during the period of loan; and the consequences upon the natural expiry of the loan (whether the player has to return to the club or the loanee club has an option to purchase the player). 

4. Identify the respective obligations of the parties. Ensure that the party that you are representing or advising in the transaction is aware of the obligations, and all obligations are reasonable and in accordance with the applicable law. 

5. Verify the age, status and nationality of the player. This is necessary in order to anticipate possible costs on training compensation, as well as other regulatory measures to comply with in case the player is a minor. 

6. Identify the conditions of the transfer agreement and when it comes into force. Particularly, if the conditions are conditions precedent or conditions subsequent to the transfer agreement and how the same affects the validity of the transfer agreement. 

7. Verify if the clauses such as a sell-on or a buy back clause or a right of first refusal clause are included and within the limits of Article 18bis (Third Party Influence) and Article 18ter (Third Party Ownership) of the FIFA RSTP. 

8. Clarify and determine whether the transfer fee is net or gross, and particularly the currency and mode of payment. Furthermore, if the payment of a portion of the transfer fee is contingent on a future sale of the player, or sporting performance of a player – ensure that the conditions are clear, unambiguous and categorically included in the transfer agreement. In particular to a sell-on clause, it would be necessary to properly define what earnings of the selling club would be included in the transfer fee payable to the player’s previous club. 

9. Examine the conditions and consequences of termination of the transfer agreement, and ensure that there are no unreasonable damages or penalties included in case of an unjustified premature termination. 

10. Clearly establish the competent forum to decide on any disputes related to the transfer agreement and the applicable law to the transfer agreement. In case of an international transfer, it would be recommended to keep it within the jurisdiction of FIFA and on appeal to CAS. 

Employment Agreements

1. Ensure that the essential elements of the contract are expressly included in the employment agreement, and are clear, balanced and reasonable. These include the names of the parties, the term of the employment agreement, the date of signing, the obligations of the parties, the salary of the player and the signature of the parties. 

2. Identify and confirm the player’s age and nationality and ensure compliance with the necessary rules and regulations of FIFA as well as the national football association rules governing minor players, if applicable. 

3. In reference to the salary of the player, it is necessary to verify and confirm whether the salary is in terms of “net” or “gross” terms. To understand the tax burden, it is also necessary to understand where the player will be a tax resident of and the ways to reduce the tax burden. Further, the date of payment and currency of payment have to be specifically detailed in the employment agreement. It is also advisable to obligate the club to provide the player with the proof of payment of the tax paid and the relevant tax certificates. 

4. If the country in which the player is employed in does not permit for the payment in the currency that the player prefers, it is necessary to insert a clause that in spite of the currency fluctuation, the corresponding amount in the main currency is guaranteed. 

5. Other benefits apart from the salary, such as bonuses, insurance, provision of housing, car etc have to be clearly defined and established under the employment agreement. 

6. Verify if there are mechanisms to compel the performance of the main obligations of the agreement such as penalty provisions, default interests and fines. In all cases, ensure that the player is not arbitrarily imposed with any fine or penalty without specifically being notified of the default and/or without been given an opportunity to be heard. 

7. It is also necessary to check if the employment agreement details the payment of the agent fees (if the same agent was relied upon by the player and buying club – dual representation); or whether the commission of the agent is to be specifically included in a separate dual representation agreement. If the agent fees is already included in a dual representation agreement, it is necessary to ensure that the fees mentioned in the employment agreement is expressly disregarded/deleted or a clause is included to make a reference to the dual representation agreement over such a clause. 

8. It is further necessary to check if the player has to issue an invoice to the club for his service or whether the club shall pay the wages without the requirement of an invoice. This largely is dependent on the status of the player with the club – as an employed person or as a self-employed person. 

9. Verify if there are specific national employment/ labour law formalities to comply with basis where the player is to be employed. If the player is to be self-employed, the formalities pertaining to self-employed persons are to be adhered to, as far as applicable. 

10. Examine the conditions of a premature termination of the agreement, and especially special clauses such as a buy-out clause, release clause and a buy-back clause. Basis the value and perceived performance potential of the player, it may be advisable for the parties to agree upon a staggered/structured buy-out/release clause that is conditioned on the year the buyout is to take place. 

11. In case the contract refers to club’s internal policy and disciplinary rules, ensure that there is an obligation on the club included in the agreement to provide the same to the player in the language that he understands and comprehends. Ensure that all disciplinary fines and penalties are proportionate to the disciplinary breach and the amount, if any, does not exceed more than 1 (one) months’ salary at the most. However, ensure that the Club does not have the right to set-off such fines/penalties against the Player’s salary on its own accord, but only after the issuance of a final and non-appealable decision by a competent body that the player committed a disciplinary breach. 

12. Examine other provisions which could lead to the premature termination of the contract such as the anti-doping rule violations. In this regard, it is necessary to safeguard the player’s interests and ensure that the club does not have the right to terminate the agreement upon a charge of an anti-doping rule violation on the player. Instead, such a right, if necessary, can only be exercised upon a final and non-appealable decision rendered by a competent body. 

13. Specifically verify and confirm the obligations of the parties, and the representation and warranties made. In this regard, it is necessary to ensure that the club does not have the right to terminate the agreement due to the poor sporting performance or skill of the player. Furthermore, it is necessary to also obligate the club to ensure reasonable and safe working environment for the player to perform his obligations. 

14. Determine the consequences of the validity of the agreement upon the injury of the player, especially in case of a long term injury. In this regard, it is also necessary to include provisions that enable a player to seek treatment and advise of a medical professional of his choosing. Clubs tend to also require the parties to submit to the advice of a third mutually appointed medical professional in case there is a conflict of opinion between the club’s medical professional and the player’s chosen medical professional. 

15. Examine the commercial aspects of the agreement, such as the image right clauses. Ensure that the Player still retains the right to wear the boots of his own choosing, even if it conflicts with the brands and endorsement rights of the club. Furthermore, in respect of the media duties and public appearances, ensure that such duties are reasonably notified to the player and the same does not clash with his approved training and match schedule. In case the player is required to travel for such media and club promotional duties, ensure that the player’s costs and expenses are all covered by the club. 

16. Check the dispute resolution forums, and if national laws mandate for the dispute to be referred and adjudicated before a national court/ national labour tribunal. If not, in case of an employment agreement having an international dimension, include provisions that obligate the parties to submit their disputes before the FIFA Football Tribunal and before CAS in appeal.