Introduction to the Importance of Contract Law in Sports

Discuss about the Sports and the Law for Trade Practices Act.

The author of the journal article has emphasized on the importance of the contract law in playing the crucial role in regulating the sporting activities. The article evaluates the applicability of contract in the context of sports and contribution of law in the modification or adjustments in the sport contracts, particularly, those contracts that has incorporated provisions of international agreements like the World Anti-Doping Code[1].

The author has attempted to convey in this journal that there is no such different body as ‘Sports law’ instead different sports related activities are governed by distinct standard legal principles. I believe the author implies that the sports related activities are not subjected to any particular legal authority or statutes instead are governed by contracts like any other human endeavors. This is evident from the application of various legal principles from distinct fields to the sport activities such as principles set out under tort law, administrative and public law, rules under the private international law along with the general law doctrine of restraint of trade. Besides the statutory provisions of Corporations Act [2001][2] and Trade Practices Act [1974][3] also play crucial role in governing the sports related activities either by analogy or directly to settle any disputes arising from sports activities.

However, the importance of contract in sports has led to the emergence of the concept of ‘Sports Law’ and has been significant in drawing a thin line between law and sports. It is immaterial whether sports is being played at an elite level or at a humble level as the law of contract prevails at both the level. A contract in the context of sports is a valid contract that is enforceable in the court of law. While the sports related contract is of a domestic or local nature, nowadays, sporting contracts are rapidly having a transactional aspect[4]. The standard example is the influence of an international code with respect to the contractual regimes in respect of those sports is the World Anti-Doping Code [WADC] 2009. This legal statute is described as a form of international sport law that ensures anti-doping area. Although the statute is a mere, contract but holds great importance to several athletes and other sporting organizations.

In the contemporary era, where sports played at higher level have transformed into big businesses which makes it more obvious that contract made in regards to sporting activities are legally binding and enforceable at court of law. However, this principle is generally not followed and was neither followed during past years as well. This is evident from the landmark case of Cameron v Hogan [1934][5], which demonstrates that in case of amateur sports where the ruling body is an unincorporated voluntary organization, the courts have always been inclined to determine that the parties did not have any legal intention to be bound by the contract. hence, such contracts were held to be unenforceable in the court of law.

The Applicability of Contract Law in the Context of Sports

However, under such circumstances, when the contract is unenforceable, the aggrieved party shall be entitled to seek remedies by claiming a declaration with respect to the authenticity of the rules of the body that have been used to the disadvantage of the aggrieved party. Nevertheless, the interpretation of rules of any individual organization is to be taken into account as to whether they had legal intention to maintain legal relations and provide the aggrieved party with opportunities to seek remedies against any breach. In order to determine such intention to create legal relationships, I believe, the courts must determine the manner in which the parties wish to become bound by the contract.

In regards to the formation of contracts within the context of sports, it can be stated that in respect of sports, the traditional principles of contract law is less applicable such as the usual method of forming a contract involves the presence of an offer, acceptace and consideration. While contracts relating sporting activities or the business of sports includes sponsorship and marketing contracts or media contracts that may be formed using the traditional contract formulation method. However, other important contracts include athletes on one hand and big sporting organization on the other hand, which involves matters like disciplinary or selection disputes proceedings. This implies that such contracts are found in several documents entered between different parties apart from the athlete and the sport organizations, thus, giving rise to multipartite contracts. However, the WADC shall be binding upon the parties to multipartite contracts to govern drug related offence as was held in International Rugby Board v Troy [2009][6].

I believe that the author has correctly asserted that interpretation of sporting contracts is essential to determine whether a sporting contract has been entered with the legal intention to be bound its contractual terms. However, the interpretation of the contract must take place objectively and not subjectively. Hence, it is essential to determine that conduct and words of the each contracting parties would make any prudent person believe that they have a legal intention to be bound by the contractual obligations. The phrase ‘what any prudent person would have understood’ implies that the text of the contract should be construed to understand its objective and purpose of the contractual transactions.

In my opinion, the author has rightly inferred that in the context of sports, while settling the disputes related to selection, the agreement terms agreed upon by the sporting organizational and participants holds substantial importance. Therefore, to ensure that the selectors are discharging their legally enforceable duties with respect to selection agreement, it is important that the terms of the agreement be in accordance to the general principles of contract law. Further, the rule applies to disciplinary matters equally, that is, the type of penalty that must imposed may be discretionary but must be based on good sense and realism. However, the contractual terms determining the disciplinary matters must apply the principles of contract law as well as the rules of procedural fairness.

The Emergence of ‘Sports Law’

The concept of procedural fairness usually relates to natural justice must be incorporated into the contract that will be interpreted based on the intention to incorporate fair procedures within the contract between the sporting organization and the athletes as was ruled in McClelland v Burning Palms Surf Life Saving Club [2002][7]. Article [8] of the WADC is also a paradigm of a contractual regime that imposes minimum standards of procedural fairness[8]. The management of anti-doping organizations shall provide a hearing process for the person alleged to have breached the anti-doping provisions and shall be entitled to a fair and an impartial hearing procedure. The contract between the athlete and the sporting organization plays a decisive role in determining the rights of the athletes to be acknowledged about the charge and the nature of evidence that may be adduced and heard at the hearing or the duty of the organization to provide reasons for imposing such charges on the athlete.

Therefore, I agree with the author that contract is essential in determining the rights and obligations of the respective parties and the penalty that is being imposed upon them for violation of the statutory rules and contractual obligations. WADC demonstrates the significance of a contract that includes a multi-layered regime that precisely mentions about the sanction applicable to the multi-layered sanction regime in any relevant contract.

Thus, in my opinion, the author has clearly explained the importance of contracts and the crucial role it plays in regulating the sports activities. This article has assisted in enhancing my knowledge regarding the importance of contract in the context of sports law as it is apparent from the journal article that the common and the most crucial aspect of the concept of ‘sports law’ is contract. Although the essential elements that renders a contract as valid and enforceable are also applicable while entering into a valid contract except certain types of contracts where certain other elements like disciplinary proceedings and selection disputes proceedings are considered more important than the general principles of contract to render the contract as valid. It is crucial that such contractual elements are based on good faith and fairness principle so as to ensure a contract as valid and legally viable.

1. Carter v New South Wales netball Association [2004] NSWSC 737

Sandra Carter was a life member of Mountain Druit net Association [MDNA] and was a highly accomplished coach as well as netball administrator within the State and local netball community[9]. A group of parents who had personal dislike for her formed an ad hoc group and alleged that she committed child abuse which included allegations of psychological and physical abuse, medical mismanagement, gross negligence in duty of care and depriving prescribed medicine and committed cheating and deception of human rights. the plaintiff suffered severe major psychological distress and went into serious depression resulting in hospitalization and resignation from her post[10]. The NEAC further alleged that she contravened the Anti-harassment policy of NSWNA [NSW Net Association].

The Importance of Contracts in Regulating Sports Activities

The investigation to determine whether Carter had contravened the policy was inappropriately handled where the evidences and witnesses provided by the plaintiff were neither adduced nor the witnesses were examined. Further, she was not even given an opportunity to properly and fairly respond to the allegations instead penalty was imposed upon her and subjected her to disciplinary proceedings for child abuse, resulting in suspension as NSWNA member for 5 years.

The plaintiff was entitled to fair and impartial hearing to respond to the allegations but was deprived of that opportunity. Further, the Disciplinary Committee of NSWNA failed to conduct an appropriate investigation regarding the allegations pertaining to the contravention of the Anti-harassment policy of the NSWNA.  Furthermore, the witnesses and the evidences provided by the plaintiff were not even taken into consideration, which would have otherwise safeguarded the plaintiff from being suspended. In regards to the importance of contracts in respect of disciplinary proceedings, it is crucial to include provisions that are based on the rules of procedural fairness or natural justice.

In addition, the courts found that such issues amounted to internal disputes of voluntary associations and as general rule stipulated in Cameron v Hogan[11], courts usually do not intrude in such cases. However, in the carters case the interference of court was interpreted as a significant injustice that necessitated the courts to interfere into the matter. This is because the situation amount to eh exceptional circumstances that validates interference of the courts. The situation Carter amounted to denial of natural justice jeopardized the livelihood of the plaintiff and amounted to a conduct which absurd d unreasonable. The decision has defamed the plaintiff as ‘child abuser’ in her own local community that has severely affected her self-esteem and reputation of the plaintiff. It has affected her future potential employment prospects as well.  

The case is significant for sports management as it explains how crucial it is for the sports administrators to ensure that a fair and reasonable approach is adopted in case of both the perpetrator and victim as far as their rights as individuals are concerned. Various policies, code of conduct and regulations associated with mainstream sports that are usually applicable to the spectators and for the parents. It is often that the implementation of such policies and codes give rise to issues rather than the policies or codes themselves in respect of the person who are subjected to compliance of such codes or policies like that in Carter’s case[12].

It is a fact that serious threats like doping, child-abuse and other misconducts shall remain within the sports industry. Under such circumstances, it is essential for the sport management or the administrators to strike a balance between the risks associated to and rights of the concerned parties by implementing or construing such policies or codes on fairness principle and common sense. In addition, constant and carefully monitoring and undertaking immediate as well as appropriate actions based on the rules of procedural fairness might deter the occurrence of such threats or reduce its impact.

References

Cameron v Hogan [1934] HCA 24 (03 August 1934) – 51 CLR 358.

Carter v New South Wales netball Association [2004] NSWSC 737

Corporations Act [2001] (Cth)

International Rugby Board v Troy [2009] 4(1) ANZLJR 1.

McClelland v Burning Palms Surf Life Saving Club [2002] 191 ALR 759 at 785 [97].

Sullivan, A. “The Role Of Contract In Sports Law”. ANZSLA, 2010, pp. 5(1) 3-25., Accessed 29 Apr 2018.

Trade Practices Act [1974]

World Anti-Doping Code [WADC] 2009 at section [8]