The contracts governing the relationship between players, clubs and sports companies are subject to a legal regime of their own, distinct from the general regime of the Labour Code, laid down in Law No. 54/2017 of 14 July. Understanding the limits on duration, the forms of termination and the particularities of this regime is essential for both players and clubs when negotiating these contracts. This article forms part of the Sports Law area of Araújo & Associados.
Duration of the sports employment contract
Under Article 9 of Law No. 54/2017, the employment contract of the sports practitioner (praticante desportivo) has a maximum limit of five sports seasons. Where the contract is entered into by a practitioner who is a minor, this maximum limit is reduced to three sports seasons.
Loan and transfer of players
The law regulates, in Articles 20 to 22, the figures of the loan (cedência) of the sports practitioner – which allows a club to temporarily assign a player to another club, the original contractual bond being maintained – and the transfer of sports practitioners, which involves termination of the bond with the original club and the conclusion of a new contract with the destination club, known as a permanent assignment. These operations, common in the professional football transfer market, must comply with the formal and substantive requirements laid down in the law, as well as the applicable federation regulations.
Forms of termination of the contract
Article 23 of Law No. 54/2017 lists the forms of termination of the sports employment contract, which include expiry on reaching the end of the contract term, revocation by agreement between the parties, dismissal on the employer’s initiative, termination by the practitioner for cause, and termination by notice on the practitioner’s initiative, where contractually agreed. Expiry on reaching the end of the term operates automatically and does not give rise to any right to compensation. In cases of dismissal by the employer or termination by the practitioner, just cause is constituted by serious and culpable breach of contract that makes the continuation of the sports employment relationship practically impossible, pursuant to Article 23(3). We examine the compensation consequences of these situations in more depth in the article Dismissal for just cause in sport – what you need to know.
Release clause – termination by notice on the practitioner’s initiative
One of the most relevant figures regulated by Law No. 54/2017 is termination of the contract by notice on the practitioner’s initiative, provided for in Article 25 – what the market commonly calls a “release clause” (cláusula de rescisão) or “exit clause”. This right exists only if it has been expressly agreed in the contract, giving the player the right to unilaterally terminate the contract, without stating a reason, by paying the employer the compensation amount that the parties have agreed for this purpose. It is a clause whose inclusion is optional, and not an automatic right of every sports practitioner.
Sports training contract
The sports training contract, entered into with practitioners at the training stage, has a maximum limit of three sports seasons, always expiring, in any event, at the end of the season in which the trainee turns 18, pursuant to Article 30 of Law No. 54/2017, without prejudice to the possibility of extension for one more season by agreement between the parties. The practitioner’s signing of his first sports employment contract with an employer other than the one that provided his training gives the latter the right to receive fair compensation for the training provided.
Nullity of contractual clauses
The law establishes a reinforced regime of contractual invalidity, imposing nullity not only on clauses that expressly contravene the provisions of Law No. 54/2017, but also on those which, while not contravening the letter of the law, produce in practice an effect identical to the one the law intended to prohibit – a mechanism designed to prevent circumvention of the law through ingeniously drafted contractual clauses.
Sports contracts and other related matters
The negotiation of sports contracts is frequently associated with the involvement of a sports entrepreneur (empresário desportivo), whose registration and conduct regime is described in the article Football agents in Portugal – registration and legal regime. Non-performance of monetary obligations arising from these contracts – wages, bonuses or transfer fees – may also give rise to collection proceedings, dealt with in the article Debt collection in sport – recovery routes.
About Araújo & Associados
Established in 1980, with offices in Porto and Lisbon, Araújo & Associados provides legal advice on the negotiation and drafting of sports contracts, in Portuguese, English, French, German and Spanish.
Frequently asked questions about sports contracts
What is the maximum duration of a sports employment contract?
As a rule, five sports seasons, pursuant to Article 9 of Law No. 54/2017, reduced to three seasons where the practitioner is a minor.
What is a "release clause" in a player's contract?
It is termination of the contract by notice on the practitioner’s initiative, provided for in Article 25 of Law No. 54/2017, which allows the player to unilaterally terminate the contract, without any need for justification, by paying the employer the compensation amount previously agreed – but only where this right has been expressly provided for in the contract.
If my contract reaches the end of its term, am I entitled to any compensation?
No, as a rule. Expiry of the contract on reaching the end of its term operates automatically and does not, in itself, give rise to any right to compensation.
What is the difference between a loan and a transfer of a player?
In a loan, the player is made temporarily available to another club, the contractual bond with the original club being maintained. In a transfer, the bond with the original club ends and a new contract is entered into with the destination club.
Is a training club entitled to receive anything when a player it trained signs his first professional contract with another club?
Yes, as a rule. The law gives the training body the right to receive fair compensation for the training provided in these situations.
Is a contractual clause that indirectly circumvents the rules of Law No. 54/2017 valid?
No. The law imposes nullity not only on clauses that directly contravene its provisions, but also on those which, although not contravening the letter, produce in practice an effect equivalent to the one the law intended to prohibit.
Contact us
For more information on sports contracts, or to book a legal consultation, you can contact us through our Porto or Lisbon offices, by telephone, email or via the form on the website. We provide legal advice in Portuguese, English, French, German and Spanish.