Sports and Basic Contract Law

Any above average sports fan knows how the contract situation in that sport goes. How the salary cap (of lack of one) affects how many year and how much money teams give to players. The ability to rework a players contract in football because those don't seem to be less set in stone versus a contract given to a hockey or basketball because of the salary cap is rigid because of the salary cap restrictions. These are extremely basic things that a sports fan like us would know just from watching the sports and ESPN in general. But after about a semester studying contracts in general (and believe me, I absolutely am not claiming to be an expert by any stretch of the imagination), it is interesting reading cases about how the laws of contracts that govern the actions of you and I affect the sports and instances we know and love.

The first case that I read recently involved the former #1 Boston Celtics pick Len Bias. Now basketball guys TBO and Cubsfan might know this case because the dude died of a cocaine overdose soon after getting drafted. What you may not know is that his his dad/ Estate sued the agent and agency representing Bias, because Bias' dad asked the agent to take out a $1,000,000.00 life insurance policy out on his life. The agent never did so and his dad did not do so because he thought the agent would. Bias's dad/ Estate sued the agency for essentially a breach of contract because the actions of the agent prevented the dad for taking out a life insurance policy which he soon after would have benefitted from.

The court in that case ruled that because the agent/agency proved that Bias was addicted to cocaine and because no insurance company would insure a cocaine user for $1,000,000.00, that the agent/agency did not do anything wrong.

Now the big case that came from Bias' death was a criminal charge regarding the people who supplied Bias was drugs and in fact caused Congress to pass a law colloquially known as "The Len Bias Law", but I did not read (and was not forced to read) that case so I am unfamiliar with it.

Another case that is probably more interesting because it involves minors playing basketball. This probably isn't in effect anymore because of NBA's new policy that you have to be one year removed from high school to play in the NBA, but the law opf contracts frowns upon minors enetering into contracts in general. Minors are viewed as not being competent to enter into contracts in general, so when young guys like Kobe, LeBron, and Darco Milic entered into the league, they were forced to sign contracts- yet were probably underage. Now, if you sign a contract with your parents (think student loans), then the contract becomes enforcable. Although I didn't see Kobe Doing Work, a line in the commercial was "I wasn't old enough to sign the contract from the Lakers; I had to have my parents sign it with me"

The reason I mentioned the shitty Darco Millic is being a case in my Contracts book discusses a case about him. When he was 16, he signed an exclusive endorsement with a sports management company. When he became 18 and a top draft pick (sidenote: he was drafted #2 over Dwayane Wade and Carmelo Anthony, oops) he offered to buy out this contract. When the company refused, Millic then opted out of the contract by himself saying he was too young too ever enter it to begin with- and the court allowed him to do that (However, Millic did end up having to return all the benefits he got from the management company).

Think about that. If Kobe had signed the contract with the Lakers alone, he probably could have opted out of that contract after a year or two. If he had played a year or two, shown how amazing he was, he possibly could have voided his own contract due to the age he was when he signed it and gotten a better one on the open market.

I'm not trying to make a point about anything here, I just personally find it interesting how the law has affected sports instances and I find it interesting when I read cases that involve sports or media instances.


David "MVP" Eckstein said...

Way to delete my unnecessary comments, TBO.

Sexy Rexy said...

No, i deleted them, because they were unnecessary

c-note said...

I never knew such rules existed.Something good to know.

Cubsfan4evr said...

This was interesting!