In the Sports’ Law practice of Costaș Negru & Asociații we often negotiate contracts put forward by professional clubs in relationship with their young players.
The recent case law of the Court of Justice of the European Union (CJEU), illustrated by the judgment in Case C-680/21, Arce, confirms the relevance and complexity of analyzing contractual clauses concluded between professionals and young athletes, especially when these involve long-term commitments and mechanisms of percentage-based remuneration from future earnings.
In fact, a young athlete from Latvia, still under parental authority, entered into a contract with a company specializing in supporting the development of his sports career, being legally represented by his parents. This company offered a comprehensive package of services designed to help young talents succeed in professional sports. The stated purpose of the contract was to create the necessary conditions for the athlete to build a successful professional career.
The contract, concluded for a significant period of 15 years, provided access to a wide range of services, from specialized training and medical support to psychological counseling, legal assistance, accounting, and marketing services – all aimed at preparing him for the demands of professional sports.
In return, if the athlete were to become a professional, he was obligated to pay the company a fee equivalent to 10% of the net income earned throughout his career, for the duration of the contract, provided that these earnings exceeded the threshold of 1,500 euros per month.
The dispute was brought before the Latvian national courts, which found that one of the clauses of the contract – the one regarding percentage-based remuneration – could be considered abusive. Following these findings, the contracting company filed an appeal, and the case was brought before the Supreme Court of Latvia. The latter decided to refer a series of preliminary questions to the CJEU. The Latvian court sought clarification regarding the applicability of Directive 93/13/EEC on unfair terms in consumer contracts in the specific context of this contract, and whether this directive would oppose a clause like the one under examination.
The Court ruled that a clause stipulating the payment of 10% of the income earned over the next 15 years in exchange for sports development services falls under the scope of Article 4(2) of Directive 93/13 and is subject to judicial review only if it is not drafted clearly and intelligibly. Furthermore, EU directives do not exclude the possibility for national law to provide a higher level of consumer protection.
Therefore, one of the central issues examined by the CJEU in Case C-680/21 concerns the validity of a contractual clause in which a young athlete is obligated to pay, for up to 15 years from the conclusion of the contract, an amount equivalent to 10% of his future earnings, in exchange for professional support services provided by the company.
The legal evaluation of such a clause must consider not only its potential impact on the consumer – in this case, a minor at the beginning of his career – but also the specific characteristics of the sports domain and the proportional compensation mechanism for the professional training and counseling services provided. A long-term percentage-based remuneration clause, although seemingly imbalanced at the time of contract conclusion, can be economically and contractually justified, considering the random nature of the benefits that may arise from the services provided, as well as the speculative nature of the professional’s commitment.
The Court does not rule out, in absolute terms, the validity of such clauses but emphasizes the necessity for them to be drafted in a clear, intelligible manner and not to create a significant imbalance, in the sense of Directive 93/13.
According to Article 4(2) of Directive 93/13, clauses that define the main subject of the contract and the adequacy of the price or remuneration are excluded from the assessment of abusiveness, provided they are drafted in a clear and intelligible manner. The transparency standard thus outlined involves not only the formal clarity of the contractual text but also the ability of the clause to enable the consumer to understand the economic effects of the commitment undertaken.
In this case, the Court emphasizes that a simple percentage formulation (e.g., “10% of the income earned over the next 15 years”) is not, in itself, sufficient to meet the transparency requirements. It is necessary for the professional to have provided sufficient information prior to the contract conclusion, enabling the consumer to assess the economic impact of this obligation. Thus, a clear description of the types of income considered (salaries, bonuses, advertising income, etc.), as well as a realistic, even approximate, estimate of the potential amount of payment, in relation to the anticipated career path, would have ensured compliance with the transparency requirements.
The lack of such information may lead to the conclusion that the clause was not drafted in a clear and intelligible manner, thus opening the way for the analysis of its abusiveness, even if it concerns the essential elements of the contract.
In conclusion, the judgment of the Court of Justice of the European Union paves the way for the consolidation of case law that more accurately reflects the complexity of contemporary economic relationships, especially in areas where the interaction between private investments, early professional training, and future earning prospects generates atypical contractual realities. The Court does not adopt a formalist approach focused exclusively on the duration of obligations or the amount of remuneration but requires a contextualized analysis that balances the legitimate interests of professionals with the inherent vulnerabilities of the consumer’s position, which are even more pronounced in the case of minors.
This article was prepared for the Blog of Costaș, Negru & Asociații by Paul Buzea, a lawyer from Cluj Bar Association.
Costaș, Negru & Asociații is a civil law firm with offices in Cluj-Napoca, Bucharest and Arad, which provides assistance, legal representation and consultancy in several areas of practice through a team composed of 18 lawyers and consultants. Details regarding legal services and the composition of the team can be found on the website https://www.costas-negru.ro. All rights for the materials published on the company’s website and through social networks belong to Costaș, Negru & Asociații, their reproduction being permitted only for information purposes and with correct and complete citation of the source.
