A CONTRACT TERM THAT REQUIRES A YOUNG ATHLETE TO PAY A PORTION OF THEIR EARNINGS IF THEY BECOME A PROFESSIONAL ATHLETE MAY BE UNFAIR

#146A contract term that requires a young athlete to pay a portion of their earnings if they become a professional athlete may be unfair

The Court of Justice, in its judgment in case C-365/23 of 3rd March 2025, ruled in the area of ​​consumer protection that a contractual term that obliges a young athlete to pay part of his income if he becomes a professional athlete may be unfair.

A minor athlete, represented by his parents, concluded a contract in 2009 with a Latvian company that offers young athletes a range of services in the field of developing their professional skills and building their careers. The subject of the concluded contract was primarily to ensure the minor athlete a successful professional sports career in basketball. The contract was concluded for a period of 15 years and provided the young athlete with a large number of services.

In consideration for the services rendered, the minor athlete undertook to pay the Latvian undertaking a fee of 10% of all net income from playing, advertising, marketing and media related to the sport during the term of the contract, provided that such income amounted to at least 1 500 euros per month, if he became a professional athlete. The minor athlete had since become a professional athlete, and his income had totalled more than 16 million euros, and he was therefore obliged to pay the Latvian undertaking more than 1.6 million euros under the contract.

The case in question ended up in the Latvian Supreme Court due to suspicion of an unfair contract term, which in this regard decided to refer to the Court of Justice the question of whether the Unfair Terms in Consumer Contracts Directive applies to the disputed contract and, if so, to what extent it prevents such a term.

The Court of Justice reacted positively in its decision and stated that the Directive in question did indeed apply to the situation at hand. However, the Court recalled that, under the Directive, it is essential for the assessment of the unfair nature of a contractual term whether it is drafted in plain and intelligible language. The Court further stated that the national court may assess its unfair nature only if it considers that it is not drafted in plain and intelligible language. The Court further recalled that the Directive also lays down a requirement of transparency and that the consumer must therefore be provided with all the information necessary to enable him to assess the economic consequences of his obligation.

According to the court, such an obligation on the part of a minor athlete does not automatically create a significant imbalance between the contracting parties. The assessment of the imbalance must be made in particular in the light of fair and equitable market practices at the time of the conclusion of the contract in the field of remuneration in the relevant sports field, as well as all the circumstances surrounding the conclusion of the contract. The court further stated that, for the purposes of assessing the unfair nature of such a term, the fact that the contract was concluded on behalf of the minor by his parents is also relevant.