Contract Hopping - the new sport!!!

Over the past few years there have been a number of high profile contractual disputes that have arisen between players and clubs in the sporting world. South African sport is now very much in a professional era. Clubs are willing to spend vast sums of money to secure and retain the services of their top players whilst competing clubs seem equally enthusiastic and determined to lure the stars away.

The legal question that arises is: which remedies are available to a club against players who, despite having a valid and binding contract with the club, choose to repudiate the contract and ply their trade elsewhere?

The general position in terms of the law of contract is that where a party to an agreement breaches his obligations, the innocent party would have the option to elect to have the contract set aside and seek damages; or to approach the Court for an order of specific performance compelling the offending party to fulfil his/her obligations in terms of the contract.

The option to elect, however, appears not to be as clear in relation to sporting contracts referred to as ‘personal services contracts’. Historically, South African courts have been reluctant to make an order for specific performance in such contracts. Generally ‘personal services contracts’ require a close working relationship between the parties, which would be difficult to implement through a court order. The reason behind the courts’ apparent reluctance to grant an order is that there is a strong possibility that the circumstances pre-dating the breach of the contract would still be in existence and could result in continued friction, inequity and undue hardship for one or both of the parties.

The reluctance to make an order for specific performance is illustrated in Troskie en ‘n Ander v Van der Walt (1994 (3) SA 545 (O)) where the court was doubtful as to whether an order of specific performance would be suitable.  Troskie had contracted to play for a specific club and chose to leave that club for another. In Sharrock’s ‘Business Transactions law’ (Seventh Edition, page 541) he summarises the court’s rationale in not granting an order as follows: 

“…the playing of rugby for a club, involves a great deal of ability, proficiency and skill of a personal nature and the performance of the service depends on specific qualities of the player concerned – his enthusiasm, willingness and drive – as well as his relationship with the club for which he is playing”.

The Troskie case was followed by Santos Professional Football Club (Pty) Ltd v Igesund and another (2003 (5) SA 73 (C). The Supreme Court of Appeal found that Igesund, a prominent, professional soccer coach who had breached his contract with the Santos Professional Football Club to take advantage of a more lucrative offer, could be compelled, by an order for specific performance to fulfil his contractual obligations to Santos.  In reaching this decision, the court took into consideration the following factors:

-          “Igesund was no ordinary servant of Santos.  He had contracted with them on equal terms and was able to command high sums of money.” (Sharrock, p. 541).

-          “The contract between Santos and Igesund expressly provided that, in the event of a breach by either one of the parties, the aggrieved party would be entitled to claim specific performance.” (Louw, ‘Sports Law in South Africa’, 2010, p. 284)

-          “The employment contract contained a provision that Igesund would have complete control of selection, substitutions and coaching of the team and that management could not interfere in this regard.” (Louw, p.284)

From this ruling it would appear that there is no hard and fast rule. Instead it seems that the court has not adopted a blanket approach to making orders for specific performance in relation to ‘personal services contracts’, and it would rather approach each matter on an individual basis, considering the individual merits of each dispute. The approach adopted by the court would be to consider the matter holistically and then for the court to exercise its discretion in determining whether an order of specific performance would be appropriate.

 

Written by: Guy Morrison (Candidate Attorney) 

  • Added 05 April 2011

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