In the wake of the Bosman ruling, which exempted out-of-contract football players from being subject to transfer fees to join EU clubs, player influence has increased substantially. For instance, it is not uncommon for players to decline signing a new contract with their current club in order to terminate their contract and subsequently relocate for free. In the absence of a transfer fee requirement, the acquiring club will likely be inclined to offer the player substantial remuneration, comprising both a signing-on fee and compensation. Indeed, many in-demand players often run down their contracts in the knowledge that they will ultimately be in line for a bumper pay day.
With regards to terminating a contract, in situations where domestic employment law differs from FIFA regulations or standard contracts contain termination provisions that deviate from FIFA’s regulations, the club’s ability to terminate the football player’s contract would be contingent on the applicable regulation. FIFA possesses the authority to adjudicate conflicts pertaining to contract disputes of an international nature, including, but not limited to, all contractual disputes between clubs and foreign players. In this article, Football Contract Termination Letter, we take a look at the mechanism and process involved.
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What is Fifa’s stance on contract termination?
The player may unilaterally terminate the contract in accordance with the FIFA transfer regulations, but only under specific circumstances.
A contract between a professional and a club may solely be terminated by mutual consent or at the conclusion of the contract’s term, as stipulated in Article 13.
Nevertheless, in accordance with Article 14, either party may terminate the agreement without incurring any repercussions (such as compensatory measures or sporting sanctions) on the grounds of “just cause.”
Article 15 of the agreement grants an “established professional” the right to terminate their contract for “sporting just cause” if their participation in official club matches during the season has not exceeded 10%. Although compensation may be owed, sporting sanctions will not be imposed if a sporting just cause is established. On this ground, a player may solely terminate his contract with the club with which he is registered within fifteen days of the club’s final official match of the season.
A contract cannot be unilaterally terminated during the course of a season, as stated in Article 16.
What is “Just Cause”?
In accordance with FIFA’s Regulations on the Status and Transfer of Players (RSTP), the contract must be held in the highest regard. Contract termination is permissible solely in the event of just cause or when an established participant possesses sporting just cause. Supporting the principle that contracts must be honoured is in the commentary edition of FIFA’s transfer regulations.
The determination of the existence and definition of just cause shall be based on the specific merits of each case at hand. Indeed, conduct that contravenes the provisions of an employment agreement remains insufficient grounds to warrant the termination of the contract on the basis of just cause. Nevertheless, if the breach endures for an extended duration or if numerous violations accumulate over a specific time period, it is highly likely that the breach of contract has escalated to the point where the party impacted by the breach has the right to unilaterally terminate the contract.
Just cause for termination may apply in the event that the counterparty has violated its contractual obligations.
Is compensation liable if a contract is terminated?
The party who breaches a contract by terminating it without just cause is obligated to provide compensation. In the process of determining the appropriate level of compensation, it is customary to take into account the legislation of the relevant country where the sport takes place. Additional factors that will be considered include the remuneration and perks promised to the player under the current and/or new contracts, the duration of the current contract, up to a maximum of five years, the costs and expenditures incurred or paid by the previous club, and whether the breach of contract occurs during a “protected period.”
The protected period for contracts signed by players under the age of 28 is three years; therefore, they may exercise the option to terminate the contract three years subsequent to its execution. Two years is the duration of the protected period for contracts with players aged 28 and older. The protected period recommences when the duration of the prior contract is extended during contract renewal.
The delegation of compensation entitlement to a third party is not permissible. In the event that a player is required to settle compensation, both the player and his new club shall bear joint and several liability for its payment. Whether agreed upon by the parties or stipulated in the contract, the amount may vary.
How we can help
We have a proven track record of helping clients deal with the process involved in drafting a football contract termination letter. We will guide you diligently and ensure all checks are carried out swiftly and efficiently and we firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting. You can read more about the range of sports law services we offer by clicking here: https://blackstonesolicitorsltd.co.uk/sports-law/
How to Contact Our Sports Solicitors
It is important for you to be well informed about the issues and possible implications of terminating a football contract. However, expert legal support is crucial in terms of ensuring a positive outcome to your case.
To speak to our Sports solicitors today, simply call us on 0345 901 0445, or click here to make a free enquiry. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.
Disclaimer: This article provides general information only and does not constitute legal advice on any individual circumstances.
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