From service agreements to employment contracts, sponsorship agreements, ground hire arrangements and more, formalising your club’s operations with legally binding contracts is moving towards a more business-like approach to running your club.
What is a contract?
A contract is a legally enforceable agreement that involves an exchange of promises in the form of money, services or rights. It can be spoken or written. It can even be implied by the conduct or actions of the parties such as providing a safe environment for employees or paying reasonable fees.
Reasons for a contract
There are many reasons clubs enter into a contract. Here are just a few examples:
- Employment contracts - coaches, officials, administrators
- Sponsorship agreements
- Leasing premises
- Purchasing equipment
- Government funding
- Selling memberships
- Supplier contracts – goods, services
- Ground hire
- Referee hire
- Licences – liquor, fundraising, broadcast, merchandising
- Insurance contracts
- Confidentiality agreements – board, committee members
- Event promotion and management agreements
- Copyright assignment
- Ticket sales.
Tips for success
- Get it in writing - avoid disputes and misunderstandings by documenting the agreement, including everything that’s been agreed to.
- Get legal advice – for any uncertainties within a contract, seek independent legal advice before you sign.
- Read every word - take your time and read the contract carefully. Question anything you’re unsure of.
- Keep a copy - whether it’s an informal email or written contract, keep a record of what’s been agreed to and review regularly.
- Use Sport and Recreation’s contract checklist as a helpful guide when negotiating contracts.
Six contract essentials
These are necessary to form a legally binding contract.
- Offer and acceptance - a proposal or undertaking to do something by someone and an acceptance by the other.
- Consideration - the value attached to the agreement - can be money, services, property, rights etc.
- Intentions to create legal relations - understanding that both parties involved in a commerce or business matter plan to be legally bound.
- Legal capacity of parties - both parties may need to be legally able to enter into the contract. Those under 18 years or with an unsound mind may lack the legal capacity.
- Legal purpose - courts will not enforce a contract for an illegal purpose.
- Genuine consent - consent must be given freely and without mistake about the nature of the contract.