Can player contracts be made conditional on passing a medical examination? Comparing the approaches in football and basketballBoaz Sity
The medical examination of a professional player is a crucial aspect of any transfer process. It is customary for professional sports clubs to thoroughly examine the health of potential new players and engage them only if such medical examination does not reveal any pre-existing medical condition. Consequently, clubs in various sports tend to subject the validity of the contract to a successful medical examination.
This article reviews and analyzes the different approaches in football and basketball to medical examinations, focusing on the validity of a contract that is made subject to a successful medical examination. Specifically, it looks at:
Why medical examinations are a crucial aspect of the transfer process
FIFA’s Regulations on the Status and Transfer of Players
The jurisprudence of FIFA Dispute Resolution Committee
The jurisprudence of the Court of Arbitration for Sport
Condition precedent requiring a medical examination in transfer or loan contracts
FIBA's Statutes and Internal Regulations
General background on the Basketball Arbitral Tribunal
The jurisprudence of Basketball Arbitral Tribunal
Conclusions and observations
Why Medical Examinations are a Crucial Aspect of the Transfer Process
In most sports, when concluding an employment contract with a professional player, the prospective club has a paramount interest to verify that a player is fit to play competitive sport for the club. Why?
In the sport of football, the importance of the medical examination stems from FIFA’s regulatory regime in relation to the concept of “contractual stability”. Specifically, Articles 13 and 14 of FIFA’s Regulations on the Status and Transfer of Players (RSTP) expressly prohibits termination of a contract without just cause. Article 13 states:
“A contract between a professional and a club may only be terminated upon expiry of the term of the contract or by mutual agreement”.
Article 14 adds:
“A contract may be terminated by either party without consequences of any kind (either payment of compensation or imposition of sporting sanctions) where there is just cause”.
Articles 13 and 14 of the RSTP apply the general legal principle of “pacta sunt servanda” (meaning, “parties who make a bargain are expected to stick to that bargain”) to the world of football. Article 17 of the RSTP determines the monetary and sporting consequences of terminating a contract without just cause, particularly compensation for breach of contract and possible ban on registering new players, either nationally or internationally, for a certain period of time.1
Due to Articles 13, 14 and 17 of the RSTP, once a club and player conclude an employment contract, both parties will have difficulty unilaterally terminating the contract without facing any legal ramifications, such as monetary or sporting sanctions.
This is especially pertinent to the situation where a club concludes a contract with a potentially injured player, as FIFA’s Dispute Resolution Chamber (DRC) and the Court of Arbitration of Sport (CAS) panels were both of the opinion that the injury of a player during the contract, even a debilitating injury,2 will not constitute “just cause” to terminate the contract, as Article 14 of the RSTP requires.3 Meaning, clubs will face significant difficulties escaping their contractual obligations towards players, even if the player was injured when concluding the contract or if the player suffered an injury during the term of the contract.
For these reasons, the medical examination is a crucial aspect of the transfer process, as football clubs seek to conclude an employment contract with a player only if the medical examination is successful and the player is found fit to play competitive football for the club.
In the sport of basketball, the importance of the medical examination stems mostly from the customary contractual arrangements between the players and clubs, as fully guaranteed contracts are prevalent in the basketball landscape. Fully guaranteed contracts include clause which prohibits the club from terminating the contract even if the player is found to be injured and compels the club to unconditionally pay the player his full salary and bonuses even in the event of an injury or death. For example:
“It is agreed that the Agreement is a "no cut agreement" and Player will get the salary and bonuses in all cases. Accordingly, this Agreement is fully guaranteed by Club for all salary payments, including but not limited to lack of skill, injury or death of Player”.4
Similar to the DRC and CAS, the Basketball Arbitration Tribunal (BAT) panels are guided by the principle of pacta sunt servanda.5
These contractual clauses combined with the principle of pacta sunt servanda prevent clubs from terminating contracts if the player is found to be injured or if he is injured during the course of the contract, without suffering monetary consequences.
Football’s approach to medical examinations
As above, football clubs will conduct a full medical examination of the player and seek to contract a player only if he is fit to play competitive football. Optimally, the club will act to complete the medical examination of the player prior to concluding the employment contract.
However, in the competitive and hectic transfer market, clubs often struggle to close transactions before the upcoming transfer deadline or seek to close the transaction before other clubs pursue the player. So the parties will occasionally conclude an employment contract prior to the player’s medical examination and subject the validity of the contract to a successful medical examination.
What is the validity of such condition precedent?
Article 18.4 of the RSTP clearly and explicitly states that "The validity of a contract may not be subject to a successful medical examination".
FIFA's Commentary on the RSTP6 further elaborates that any such condition included in a contract will not be recognized and the contract shall remain valid without this clause (see Page 55). As explained in the Commentary, FIFA expects the player's prospective club will undertake all necessary research and take all appropriate steps, including a full medical examination, before concluding a contract with the player. The commentary cited above further establishes that once a contract has been signed, the player may rely in good faith on the contract being respected and enforced.
The Jurisprudence of FIFA DRC
Pursuant to Article 18.4 of the RSTP, FIFA DRC emphasized that the validity of a contract may not be subject to a successful medical examination and if a club concludes a contract with a player prior to a successful medical examination, it does so at its own risk. The DRC explicitly stated that such condition precedent7 to the validity of a contract shall be considered null and void:
"In this respect, the Chamber referred to art. 18 par.4 of the Regulations which stipulates that the validity of a contract may not be made subject to a positive medical examination. The Chamber stated that the condition in Clause 13 of the contract clearly contravenes art. 18 par. 4 of the Regulations and therefore, has to be considered null and void, i.e. not legally binding… The Chamber noted that it was an undisputed fact that the Claimant had not undergone the medical examination until after the signing of the contract and that the results were not positive. The members of the DRC stated that by not conducting the medical examination before the signing of the contract, the Respondent had taken the risk of a possible negative outcome of the examination as negative examination results do not constitute a valid reason for unilaterally terminating an employment contract".8
The DRC has also held that a club wishing to employ a player must exercise utmost due-diligence and carry out all relevant medical examinations prior to entering into an employment contract with a player:
"For the sake of completeness, the Chamber wished to emphasise that on the basis of art. 18 par. 4 of the Regulations and the Chamber’s respective jurisprudence, a club wishing to employ a player has to exercise due diligence and carry out all relevant medical examination prior to entering into an employment contract with a player… In particular, the members of the Chamber noted from the documentation on file that the Claimant had been medically checked after the signature of the contract by and between the parties, and that it appears that the Claimant never misled the Respondent in relation to his health condition. Thus, the members of the Chamber understood that the Respondent concluded the contract with the Claimant at its own risk".9
To summarize, the DRC will not recognize any clause which subjects the validity of a contract to a successful medical examination. FIFA's RSTP are based on the following principle:
the player's former club and prospective club should reach an agreement and sign the relevant contract regarding the transfer of the player;
the prospective club shall initiate and perform the medical examination;
only then, after careful research and due-diligence, the player and the new club should sign an employment contract.
The underlying rationale of the FIFA’s RSTP is to protect football players from "abusive" invocation of injury claims after signing of the contract. Football players who have signed a contract with a club will, in good faith, believe they have entered into a new professional relationship will thus agree to cancel their existing contract with their former clubs or forego the opportunity to negotiate with other potential clubs.10
The Jurisprudence of the CAS
In line with the DRC's well-established jurisprudence cited above, in Kuwait Sporting Club v. Z. & FIFA11, the CAS panel adjudicating the case summarily affirmed that a condition precedent to the validity of contract requiring a successful medical examination shall be considered null and void. In this case, a professional football player and a football club from Kuwait signed an employment contract subject to a successful medical examination. Shortly thereafter, the player was taken out in the middle of a match and was taken to the hospital where an MRI of his knee was done. After the MRI exam the Player was informed by the Club that his knee was in a very bad condition and the club subsequently terminated his contract due to chronic knee injury. The claimed that the contract is subject to a successful medical examination and that the club was unable to complete the medical examination prior the injury occurred. However, the CAS panel emphasized that a condition precedent in the contract requiring a successful medical examination is invalid:
"It is not disputed by the parties that the Employment Contract was subjected to a successful medical examination… Under article 18.4 of the FIFA Regulations 'The validity of a contract may not be made subject to a successful medical examination and/or grant of a work permit' and any clause to this effect would effectively be null and void. This nullity does not affect the validity of the entire contract. The duties of the Parties towards each other under the Employment Contract remained valid and binding. Therefore, the condition for a successfully passed medical examination imposed by the Club for the enforcement of the Employment Contract should be considered as a non-written clause". (See Paragraphs 8 and 9)
Similarly, in UMM Salal Sport Club v. Mario Melchiot12, the Dutch football player Mario Melchiot entered into an employment contract with a Qatari football club. While playing for the club, the player suffered a medical condition, in which he lost consciousness for 15-30 seconds. After a series of tests, the club’s experts concluded that the player suffers from a heart condition that prevents him from participating in competitive football. The club subsequently terminated the player’s contract, citing his permanent incapacity to render his services. The CAS panel adjudicating the case concluded that the club terminated the contract without just cause. In rendering its decision, the CAS panel underlined that Article 18.4 of FIFA’s RSTP prohibits a club from subjecting the validity of a contract to the player passing a continually successful medical examination:
"(…) it is clear from article 18 (4) RSTP that the validity of an employment contract cannot be made subject to the player passing a continually successful medical examination. Hence, a club is prohibited from inserting an express provision to this effect into the employment contract with the Player or from subsequently reading a provision of this kind into the employment contract or claiming that the player’s subsequent negative medical status entitles it to terminate the contract". (Paragraph 99)
CAS panels reiterated this position in at least two more cases.13
In conclusion, FIFA, the DRC and CAS all consider a condition precedent requiring a successful medical examination inherently invalid, null and void. FIFA, DRC and CAS all pronounced that a club must carry out all relevant medical examinations prior to entering into an employment contract with a player. If a club decides to enter into a contract with the player prior to the completion of the player's medical examination, it does so at its own risk. As a consequence, a club's failure to respect the contract will represent a breach of contract, potentially exposing the club to monetary and sporting sanctions. 14
Condition Precedent Requiring a Medical Examination in Transfer or Loan Contracts
It is worth stating that Article 18.4 of FIFA’s RSTP does not apply to transfer or loan contract and therefore two clubs concluding a transfer of a player may freely and legitimately subject the validity of the transfer or loan contract to a successful medical examination of the professional football player.
The CAS, DRC and Player's Status Committee (PSC) unanimously held that the prohibition laid down in Article 18.4 of FIFA’s RSTP concerns “the maintenance of contractual stability between professional and clubs”, meaning a player and his club, and therefore the prohibition does not apply to contracts between two clubs transferring a professional player.15
FIBA's Statutes and Internal Regulations
The International Basketball Federation (FIBA) is the sole competent body for basketball throughout the world. By virtue of its regulatory role, FIBA may regulate basketball activities worldwide through the enactment of rules, regulations and decisions.
FIBA's Statues and Internal Regulations do not include any comparable provisions on the validity of a condition precedent requiring a successful medical examination.
It is interesting to note that FIBA's Regulations also do not address other pertinent issues, such as contractual stability, particularly consequences for breach of contract without just cause.
General Background on the Basketball Arbitral Tribunal
In 2009 FIBA inaugurated a dispute resolution institute named the BAT.16 The BAT was established in order to resolve basketball disputes in a simple, quick and inexpensive manner. It is located in Switzerland and is therefore subject to Swiss law.
BAT's competence is by virtue of a contractual consent between the parties to refer the dispute to BAT's jurisdiction. Unless the parties otherwise agreed, the appointed sole arbitrator hears the dispute ex aequo et bono, i.e. in accordance with the principles of justice and fairness, without reference to any particular national or international law.17 FIBA may impose sanctions on parties that do not honor BAT's rulings, such a monetary fine or a ban on registering new players.18
Can FIFA's RSTP apply by analogy to Basketball?
As stated above, the BAT usually hears disputes ex aequo et bono, i.e. in accordance with the principles of justice and fairness. However, in numerous instances parties to a dispute sought to rely, even by analogy, on the well-developed core principles prescribed in FIFA's RSTP.
For example, in Jeremy Pargo v. Maccabi Tel Aviv Basketball Club (1995) Ltd.19, the BAT arbitrator adjudicated a dispute between American basketball player Jeremy Pargo and Maccabi Tel Aviv Basketball Club, where the club alleged that the player blatantly terminated his contract without just cause. Interestingly, Maccabi Tel Aviv tried to rely on Article 17 of FIFA's RSTP and respective CAS precedents in relation to compensation for breach of contract without just cause, particularly FC Shakhtar Donetsk v. Matuzalem Francelino da Silva20.
However, the BAT was reluctant to apply FIFA's RSTP to the sport of basketball, as no comparable provisions exist in FIBA's Regulations. In the words of the BAT:
"The FIFA Transfer Regulations are specific to football. No comparable provision exists in the regulations of FIBA. The laws of Switzerland which is the jurisdiction in which both organisations have been established recognise the principle of the autonomy of associations. Associations are free to govern their own affairs and to establish the respective rules. The rules of one association do not apply to another association even if the underlying facts may be comparable… The Arbitrator accepts that Article 17 of the FIFA Transfer Regulations and the corresponding CAS jurisprudence are based on, and further specify, the general obligation of the employee to compensate the employer for all costs and damages caused by his breach of contract. However, the Arbitrator prefers not to apply the FIFA Transfer Regulations and the respective CAS jurisprudence to the sport of basketball – not even by analogy – but to base his ruling on ex aequo et bono considerations which include the legal principle of compensation for damages"21 (Paragraph 72)
In contrast, in Galatasaray Spor Kulübü Dernegi v. David Gregory Hawkins22, a different BAT arbitrator adjudicated a dispute between Galatasray and American player David Hawkins, where the player failed a doping control and the club subsequently claimed the player breached his contract with the club without just cause. The club again sought to rely on FIFA's RSTP and respective CAS jurisprudence. Surprisingly, in this case the BAT was willing to "take guidance" from CAS's jurisprudence in calculating the compensation for breach of contract without just cause:
"In a landmark decision rendered by the CAS in the case FC Shakhtar Donetsk vs. Matuzalem Francelino da Silva (the 'Matuzalem Case'), the CAS, in 2009, developed and explained the methodology and core principles of damage calculation in the context of contract termination without just cause in the world of sports employment. Although the decision is not directly applicable here, because the CAS’s calculation of damages occurred in a football case and was governed by Art. 17 of the FIFA Regulations (which sets out particular, but non-exclusive criteria for the calculation of damages), the core principles and methods derived therein can be relevant for determining the Club’s damages under the aegis of equity and fairness in this case. Therefore, the Arbitrator takes guidance from the CAS’s findings in Matuzalem in calculating the Club’s damages in this proceeding". (Paragraph 71)
It is therefore ambiguous if the BAT arbitrators are willing to follow and apply, even by analogy, the core principles prescribed in FIFA's RSTP and developed in the respective CAS jurisprudence.
The Jurisprudence of the BAT on Medical Examinations
According to BAT's arbitrators established and consistent jurisprudence, the parties are free to determine the legal consequences of a failed medical examination, meaning, the BAT arbitrators will recognize the validity of a condition precedent requiring a successful medical examination.
In Alfonso Albert v. AEP Patron23, the BAT arbitrator adjudicated a dispute in which the club justified its refusal to respect the player's contract by claiming that a successful medical examination was a condition precedent to the validity of the contract and the player had failed the medical examination. The BAT arbitrator noted that "good health and playing condition is an essential basis for every player's contract, even if such condition is not explicitly mentioned in the player's contract itself". Under this premise, the BAT arbitrator reached a conclusion that the club is free to subject the validity of the contract to a successful medical examination. In his words:
"Considering that it is customary for professional sports clubs to check the health of new players and to engage them only if such medical examination does not reveal any pre- existing medical condition the Arbitrator finds the above-mentioned reference to constitute a sufficient proviso which entitled the Club (a) to request the Player to undergo a medical exam and (b) to withdraw from the Contract if there were objective and comprehensible medical reasons not to engage the Player". (Paragraph 81)
Similarly, in Thomas Kelati v. Olympiacos Pireu B.C24, the club claimed that the player's contract was invalid because the player failed his medical examination. The club relied on a clause in the contract which stated that the contract shall only be in effect if the player successfully passes the medical examination imposed by the club. The BAT arbitrator considered such condition precedent a legitimate means to protect the club's interest:
"This legal qualification of Clause 6 of the Contract is further backed by the BAT jurisprudence. In FAT 0066/09 a clause providing for a medical examination was considered a condition precedent to the validity of a player’s contract and a legitimate means to protect the club's interests". (Paragraph
More recently, in Marko Banic v. Unics Kazan Basketball Club25, a BAT arbitrator reaffirmed the position that parties to a contract may freely agree on the legal consequences of a failed medical examination, stipulating that a failure will render the contract null and void (condition precedent) or merely granting the club a right to terminate the contract with just cause. The BAT arbitrator emphasized:
"According to BAT jurisprudence, parties are free to agree on standards or terms for medical examination being deemed passed or failed; in the absence of any express agreement, a club must prove “objective and comprehensible” reasons for the failure on the basis of which a reasonable person would find that a player failed the medical examination; also the club must immediately communicate detailed reasons and explanations for failed examination to give the player fair opportunity to discuss and contest the result. In addition, parties are free to agree on legal consequences of failed examination, e.g. stipulating that failure will render the contract null and void or merely granting the club a termination right".
However, the BAT arbitrators also repeatedly emphasized in numerous cases that any medical examination must result in objective and comprehensible medical reasons for the employer not to engage the player. Furthermore, the club has a duty to immediately provide the player with detailed reasons and explanations for the failed examination, based on medical reports in a language the player could understand, so he would have a fair opportunity to discuss and contest them.26 The BAT arbitrators underlined the fact a new player may be subject to medical exams is not a "free pass" for the club to withdraw from a signed contract.
For example, in Marko Banic v. Unics Kazan Basketball Club27, the club alleged its termination of the player's contract was justified because the player failed his medical examination. However, the BAT held that the "the reasons provided by the Club for the Player for his (alleged) failure of the health/physical test were very general" and therefore provided insufficient cause to terminate the contract.
Conclusions & Observations
FIFA's RSTP expressly and strictly prohibits any condition precedent to the validity of a contract requiring a successful medical examination. In line with FIFA's RSTP, the DRC and CAS consistently considered such a condition precedent null and void and the contract remained in full force.
It is therefore advisable for football clubs to carry out all necessary medical examinations before entering into a contract with the player. The advisable transfer process for football clubs under FIFA's regime is detailed below:
First, the player's former club and new club should reach an agreement and sign the relevant contract regarding the transfer of a player.
Second, the new club shall initiate the medical examination.
Third, only after the club completed the medical examination and came to a conclusion that the player is fit to play, the player and the new club should sign the employment contract.
As opposed to FIFA's regime, FIBA recognizes the validity of a condition precedent requiring a successful medical examination, meaning, the parties are free to subject the validity of a contract to a successful medical examination.
However, it is advisable for basketball clubs to be aware of potential pitfalls:
The BAT has emphasized that a medical examination is not a "free pass" to withdraw from a signed contract. The club must prove "objective and comprehensible" reasons for invalidating the contract. It must also immediately notify the player of his failed medical examination and provide the player documentation of the results in a language which he understands.
If a basketball club seeks to subject the validity of a contract to a successful medical examination, it must carefully and explicitly draft the clause as a condition precedent and not as an option to terminate the contract. For example, in Akinlolu Akingbala v. New Basket Brindisi S.p.A28, the BAT held that, according to the language of the contract, a successful medical examination did not constitute a condition precedent to the validity of the contract, but rather provided the club with a right to terminate the contract if the player failed the examination; therefore the player's contract became binding and enforceable upon its signing. As a result, the player was entitled to the contractual payments until the club communicated the termination notice to the player.
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- Tags: Basketball | Basketball Arbitral Tribunal (BAT) | Contract | Court of Arbitration of Sport | Dispute Resolution | Employment | FIBA Statutes and Internal Regulations | FIFA | FIFA Dispute Resolution Chamber | Football | Governance | International Basketball Federation (FIBA) | Regulation | Regulations on the Status and Transfer of Players
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