Presuming that a player has negotiated the insertion of a ‘buy-out clause’ into his playing contract, why is it that that footballer must himself pay the sum required to activate the buy-out clause? Can a clause not be drafted so as a bid of a certain value made by a third party club for a player, must be accepted by the player’s current club? Theoretically, such ‘release clauses’ can exist, but their enforceability in English law is not certain.
The fundamental principle of privity of contract would mean that the third party club, who is not privy to the footballer’s playing contract, cannot enforce the clause if the current club decides to reject a bid equal to any sum purported to release the player. This is especially the case as any playing contract would expressly exclude the rights of third parties arising out of statute. As the third party club cannot enforce the clause, it would be entirely up to the discretion of the current club on whether to accept a bid or not. Uruguayan striker Luis Suarez had a similarly worded clause in his previous playing contract with Liverpool FC, which purported that a bid of at least £40,000,000 must be accepted. However, when Arsenal FC made a bit of £40,000,001, Liverpool chose to reject the bid, presumably after being advised of its unenforceability.
One way, around the problem could be a drafting which puts an obligation on the current club to inform the player once a bid which is at least equal to the agreed sum is made. The player would also need to ensure that it is expressly stipulated on the contract that he can enforce the clause in the English Courts without needing to prove a breach or damages (an indemnity of sorts). As such, using the Suarez example, if the drafting had been slightly different so as to implement the above mentioned variations, Liverpool would have been under an obligation to inform Suarez once Arsenal made the bid, and knowing that Suarez has a contractual recourse, Liverpool would have been under pressure to accept. Of course, ultimately Liverpool could have still refused to accept the bid, but in this case Suarez would have been able to enforce the contract by bringing a claim in the English Courts.
By Andi Terziu
Law and Football 