For the benefit of those non-football supporters, Lionel Messi is considered one of the best footballers of all time and is the star of Barcelona Football Club. Recently, he has been the subject of a lot of news reports and controversy surrounding his contract with Barcelona FC.
Professional footballers are contracted to a football team for a period of time and can request to be transferred to another team at the end of each season or at the end of the contract. For example, a footballer may be contracted with a team for 2 years. During that time, another team may pay a transfer fee for him to be transferred early. Alternatively, the footballer may transfer at the end of the contract without a transfer fee being applicable.
Within Messi’s contract with Barcelona, there is a 700,000,000 Euro “buy-out clause”. Therefore, any team seeking Messi before a specified time would have to pay this fee to Barcelona FC. This is obviously exorbitant and Messi becomes financially unattractive to other teams.
Messi submitted a request to Barcelona FC to terminate his 4-year contract with them despite being contracted to play until summer 2021. Messi does not agree the buy–out clause is still active. This is because he claims that this buy-out clause expired 10 days after the Champions League Final.
Due to the corona virus pandemic, the Champions League final date was moved from 30 May 2020 in Istanbul to 23 August 2020 in Lisbon. Messi made his transfer request on 18 August 2020 which surpasses 10 days after the original date of the Champions League Final, however the final was moved to 23 August 2020. Barcelona FC therefore claim Messi is bound by the buy-out clause as it was the event and not the planned date of the event that is the triggering factor and therefore the fee is payable on transfer as the request pre-dated the actual final.
This matter is the subject of Spanish law and FIFA laws and from recent news is largely irrelevant because Messi has negotiated a compromise with Barcelona in which he stays for more money.
However, looking at this from the jurisdiction of England and Wales it would be interesting to see how our current laws would apply to the interpretation of the contract taking into account the coronavirus pandemic.
Taking this step by step:
1. Is the contract valid?
We need to make sure that the contract is valid. For a contract there needs to be:
- Offer;
- Acceptance; and
- Consideration.
I do not have a copy of the contract between Messi and Barcelona FC. However, I presume this is a valid contract as they will have hired the most experienced lawyers to check.
2. What does the clause actually say?
We need to be sure as to what the clause says. This clause is a “buy-out clause” (also known as a release clause). As explained above, this clause imposes an obligation and a fee on another organisation wishing to acquire the skills or services of that individual. This clause came with a time limit. It is the interpretation of this clause that is key to establish whether it remains binding or if the buy–out clause has expired.
3. Is the buy-out clause still binding?
Contractually speaking, if the clause states the request must be after the Champions League Final then on a strict interpretation it would be the event itself and not any planned date. As the request predates the actual final the clause would be operative. If a specific date had been inserted or wording such as the date of the Champions League Final or no later than 1 August whichever is the earlier, then this would be binding. What is interesting is if the Champions League Final was deferred for a year, so clear drafting would be required to cover every anticipated eventuality.
4. Will the Courts take into consideration the coronavirus?
Force Majeure
The request by Messi was made outside of time due to the coronavirus and the change in the date of the Champions League final.
If Messi had a contract within England and Wales, he may have been able to rely on a Force Majeure clause dependent on the contents of the contract itself.
Many contracts have a Force Majeure clause that allows the variation of the parties’ obligations and/or liabilities under the contract only when there is an extraordinary event that is beyond anyone’s control which does not allow them to fulfil their contractual obligations.
“Extraordinary event” includes events such as: war, terrorism, earthquakes, acts of government, plagues or epidemics. The coronavirus pandemic is an extraordinary event and this may excuse the party from performing the contract in whole or in part or delay in performance. It may also allow them to claim an extension of time of performance or the right to terminate the contract.
Should Messi have a Force Majeure clause within his contract, this may allow him the extra time to make a request for transfer without the extortionate fee.
Frustration
There may not be a Force Majeure clause within a contract so an alternative option is to rely on the common law doctrine of frustration. A contract can be terminated by frustration if it is proven that after the agreement was entered into, an event occurred that has made the performance of the contract either: impossible; illegal; or different from what was agreed when entering into the contract i.e. the coronavirus.
This however is very difficult to prove and once proven, it terminates the contract completely.
In light of the above and dependent on the terms of the contract with Messi and Barcelona FC, it may be possible for Messi to avoid the “buy-out” clause due to the coronavirus.
It is clear that many contracts will have been affected due to the coronavirus and it is interesting to see how this will affect a large number of contracts. Since researching this, Messi has decided to remain at Barcelona FC, no doubt this is partly due to the hefty litigation costs and the increased money received to stay.
Football aside, the moral of this story is to ensure your contracts are clear and fit all anticipated circumstances as any ambiguity leads to confusion and often litigation. Whilst experts in litigation we always preach prevention is better than the cure, especially as a well drafted contract gives you the best advantage if you do litigate.
If you have any questions in relation to contractual disputes, please do not hesitate to contact our offices on 0113 266 0735.