Minors’ Agreements in Sports
By Roshan Gopalakrishna
In most legal systems, an agreement between two parties is legally binding and each party is required to honour the terms of the contract. An exception to this general rule occurs when one of the parties to the contract is a minor. To protect the best interests and welfare of children, the law generally deems minors incapable of possessing the necessary judgment to be legally bound by their agreements. As a result a contract with a minor is voidable at the option of the minor, or in the case of India is void ab initio.
The inherent danger of dealing with minors or children comes into sharp focus in the realm of sports contracts. It is a common trend for athletes to sign their first professional contracts or management contracts before they become adults or reach the age of majority.
The law with regard to minors and sports contracts in India is especially hazy. This module gives a brief overview of the prevailing law in the United States, the United Kingdom and India regarding minors and sports contracts.
The Law in the United States
The age of majority in the United Sates in most states is 18 years and any person below the age of 18 years is considered to be a minor. Contract law in the United States is almost completely based on common law principles and doctrines. Common law principles dictate that a contract can only be valid if it is between two parties who have the capacity to contract. Minors in the United States generally lack the capacity to enter into a contract that legally binds them to their agreement. However, contractual promises made between an adult and a minor are usually binding on the adult. In other words, a contract entered into between a minor and an adult is voidable at the option of the minor, but the adult will be legally bound to perform the adult’s side of the deal. In order for a minor to avoid a contract, he or she need only manifest an intention not to be bound by it. Nevertheless, the minor will be liable for any tangible benefits he or she received and will also have to pay restitution before he can cancel the contract.
This common law right granted to the minor to avoid a contract is known as the minor’s right to disaffirm. It should be kept in mind that only the minor has the option of disaffirming his or her contractual obligations; any adult parties to the contract remain bound by it unless released by the minor’s disaffirmance. Even if a parent or guardian of the minor approves the contract, the minor can still disaffirm the contract on a ground of infancy while asserting that the guardian did not have authority to enter into the contract. Generally speaking, a minor may disaffirm a contract at any time during minority or for a reasonable time after the minor comes of age. The minor has to also disaffirm the contract in its entirety rather than only a part of it.
However, there are some exceptions to a minor’s right to disaffirm, such as, a contract entailing necessary products like food, shelter, clothing, lodging or if the minor represents his or her age.
One case involving a minor’s right to avoid a sports contract in particular is Central Sports Army Club (CSKA) v. Arena Associates Inc., where Sergei Sasmonov, a Russian hockey player, left his team in Russia (CSKA) to play hockey in the United States with the Detroit Vipers in the International Hockey League. Samsonov’s contract with the CSKA was signed when he was a minor without the consent of a parent or a guardian. CSKA filed a suit against the Vipers in a New York court alleging breach of contract by Samsonov. It was held by the court that the CSKA contract with Samsonov was void. In doing so, the Court observed that the contract laws of the States of Michigan and New York which were similar to Russian Contract Law, allowed a minor to disaffirm his or her contract even if a parent or guardian had given consent.
In order to circumvent the obvious risks involved while signing contracts with a minor, a number of states in the US, including California and New York, have laws which prohibit a minor from disaffirming a contract if the contract itself is pre-approved by the Court before it is signed.
The state of California has a famous statute, widely known as Coogan’s law, which applies both to child entertainers and sportsmen that generally limits the minor from cancelling a contract if it is pre-approved by a court. The Court may grant such an approval on receipt of a petition by either party to the contract with reasonable notice to the other party. Unlike in New York where there are stricter regulations, the petition is seen as a formality by the Court and approval is granted without much scrutiny. Once a Judge approves the contract, the minor is generally prohibited from disaffirming the contract on the ground that he or she was a minor when signing the contract. The Court will also set aside a maximum of 50 per cent of net-earning until the minor turns 18 years old so that the minor’s earnings are not misused by his parents or legal guardians.
Like California, the state of New York also authorises court approval of minor contracts and such approval applies to contracts by performing artists and professional athletes. However, unlike in California, a judge may refuse to approve the contract until it is satisfied that the Contract is in the minor’s best interests. The parents or the minor should also agree to set aside a portion of the earnings to be placed under the control of a guardian. The court will generally determine the amount of earnings to be set aside by considering factors such as the parents’ financial circumstances, the needs of the minor’s family and whether the minor is married.
Aside from New York and California, several states such as Texas, Florida and Massachusetts have provisions either in their civil codes or legislations which make it mandatory for minors entering into sports or entertainment contracts to seek court approval.
The Law in the United Kingdom
In the United Kingdom, a minor is defined as any person under the age of 18. The law regarding a minor’s ability to enter into a legally binding contract is also based on common law principles. In the United Kingdom, a minor’s agreement is voidable at the option of the minor. Therefore, under British Law, a contract with a minor is binding on the adult but not on the minor.
However, a minor can be held bound (to a certain extent) in the case of some contracts, such as, those for necessaries, employment and apprenticeship. “Necessaries” consist of those things without which a person cannot reasonably exist. They include food, clothing, lodging, education or training in a trade and essential services. Such contracts are deemed to be for the benefit of the minor and are therefore enforceable.
One of the earliest cases that characterised a minor’s ability to contract was Roberts vs. Gray. In this case, the defendant, a minor, had agreed to accompany the plaintiff, a professional snooker player, on a world tour in order to receive training and experience. The court held that the agreement between the plaintiff and the defendant was a contract of employment and for the benefit of the defendant. It was stated in this case: “[i]f upon consideration of the whole agreement there is a manifest advantage to the infant, he cannot avoid it” and “[o]n examination of the whole contract, it is for the benefit of the infant, although it contains terms that, standing alone, would not be for his advantage. There is, therefore, no right on the part of the infant to repudiate the contract.” The defendant subsequently had to pay damages for breach of contract.
Certain provisions are made for those players who are yet to attain majority. For example, the Professional Football Association with the FA, Premier and Football Leagues provide trainee players with a written guidance informing them of their contractual rights and duties. Where appropriate, the same rules are applicable in a contract of apprenticeship. The rules regarding a contract of apprenticeship vary slightly. Apprentices hold a special position with regard to contractual law. The contract must be written and cannot be terminated other than due to grave misconduct on the part of the apprentice. An apprentice may acquire statutory employment rights like the right not to be unfairly dismissed. However, as per the employment law, a dismissal may be fair even if it constitutes a breach of contract, but an apprentice dismissed in breach of contract can receive damages for any immediate financial loss and loss of future prospects.
Doyle v White City Stadium Ltd defined a minor’s liabilities during the course of employment. A minor boxer, who hit his opponent under the belt during a match, was bound by the rules which allowed for suspension and payment of a fine. The court held that:
“[i]t is as much in the interests of the plaintiff himself as of any other contestant that there should be rules for clean fighting, and that he should be protected against his adversary’s misconduct in hitting below the belt or doing anything of the sort. There is no question of his rendering services to employers. The position is that he himself has been given the opportunity of making his livelihood by professional boxing on terms and conditions which safeguard him as a contestant from any improper conduct on the part of those with whom he may engage in fight. Moreover the rules contain specific provisions under which the interests of the boxer are safeguarded in respect of any conduct of the promoter or manager with whom or through whom he may have to make arrangements and terms.”
A more recent and prolific case with regard to a minor’s agreement in sports was Proform Sports Management Ltd v. Proactive Sports Management Ltd and Paul Stretford. Proform Sports Management proceeded against Proactive and Paul Stretford with the claim that the representation contract which Proform had entered into with Wayne Rooney when he was 15 was binding on him and that Proactive and Stretford were liable for inducing Rooney to breach the Proform contract. The critical issue that was raised in this case was whether a football agent’s representation agreement fell under the purview of those contracts which were enforceable against a minor. It was held that a minor’s contract with a football agent is not essential to enable a player to earn a living. The contract with the agent was a ‘trading contract’ and hence voidable. It is the contract with the player’s respective football club which provides them employment and training and thus, falls under those contracts to which a minor is bound. The case brought forth an issue which is pertinent to the modern sports scenario with the progressive increase of sports persons with agents and managers.
The Law in India
Under the Indian Majority Act, 1875, the age of majority in India is eighteen (18) years. However, in the event that a guardian is appointed by a court of law, the age of majority is twenty-one (21) years in such a case.
Section 11 of the Indian Contract Act, 1872, states that every person who is of the age of majority is competent to contract. Minors are not competent to contract and a minor’s agreement is void ab initio. In India, a guardian may contract on behalf of a minor. Only agreements which are within the competence of the guardian and that operate for the benefit of the minor may be specifically enforceable. Such an agreement will only be valid and enforceable to the extent that it provides some benefit to the minor, is within the power of the guardian and does not impose any obligation on the minor.
Notwithstanding the above, Section 68 of The Indian Contract Act, 1872, provides for the liability for necessaries supplied to persons who do not have capacity to enter into a contract. The section states that a party that has supplied the minor with ‘necessaries’ is entitled to be reimbursed from the minor’s estate. ‘Necessaries’ are held to mean goods reasonably necessary to support a minor’s extant position in life and are relative, to be determined with reference to the circumstances of the minor. While such course of action is not recommended, it is possible that were the Contract to be entered into directly with a minor sportsperson, in some circumstances, certain terms of the Contract might be considered an agreement to provide the minor ‘necessaries’ under the Indian contract law and the other party to the contract would enjoy certain associated rights to receive compensation for such delivery of ‘necessaries’
With respect to a breach of a contract signed by a guardian of a minor sportsman, the only available remedy would be to initiate legal proceedings against the guardian for breach of the contract. Under section 73 of the Indian Contract Act, 1872, when a contract is breached, the party which suffers from such breach is entitled to receive compensation from the party in breach of the contract. The Supreme Court of India has held that “the party in breach must make compensation in respect of the direct consequences flowing from the breach and not in respect of loss or damage indirectly or remotely caused.” (Pannalal Jankidas v. Mohanlal, 1951 AIR 144). Further, under Indian law, the party which is injured by the breach of a contract may bring an action for damages. This reference to damages means monetary compensation for the loss suffered by the injured party. The burden of proving loss however lies on the injured party.
As a minor’s agreement is void ab initio, he cannot validate it by ratification on attaining majority. In the event that a particular party wishes to retain the services of a minor sportsman once he reaches the age of majority, a fresh contract with sufficient new consideration must be drawn up and presented to the player for signing. While the original contract with the minor sportsperson’s guardian may explicitly state that the guardian shall cause (or use best efforts to cause) the minor to enter into a fresh contract upon attaining majority, it is unlikely that this clause will be specifically enforceable against either the guardian or the sportsman.
The law in the United States and the United Kingdom provides a far wider scope to the contractual capacity of a minor than the law in India. The underlying principle governing minor’s sports contracts, especially in the United Sates is that he or she will be held accountable for a breach of contract. A minor cannot disaffirm the contract and still reap the benefits gained as a result of the contract. However there are effective safeguards to protect contracting minors. Therefore with respect to a minor sportsperson’s rights, duties and liabilities, the British and American law is more formalised than Indian law.
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