On March 20, 2025, the Court of Justice of the European Union (“CJEU”) ruled on the fairness, under EU consumer protection law, of a contractual clause allocating a percentage of an athlete’s income to a professional services provider (Case C‑365/23 [Arce]). This ruling sets an important precedent and strengthens the protection afforded by consumer protection law to minors who enter into professional service contracts, whether in sport or elsewhere.
Background
The case was referred to the CJEU by a Latvian court. It concerns a contract whereby a company undertook to provide career support services – including coaching, training, sports medicine, sports psychology, career guidance, club contracts, marketing, legal services, and accounting – to a basketball player, who was a minor at the time and therefore represented by his parents. In exchange for the company’s services, the athlete agreed to pay 10% of any net income (plus VAT) he would receive over a period of 15 years from the signing of the contract. At the time of signing the contract, the athlete was not a professional. Some years later, however, he became a professional athlete. When the athlete refused to pay the percentage to the company, the company sued him to enforce the contract. The Latvian courts asked the CJEU, whether it could assess the fairness of this long-term financial commitment under the Latvian legislation implementing Directive 93/13/EEC on unfair terms in consumer contracts (“UCTD”).
Application of the Unfair Contract Terms Directive
Under the UCTD, a contractual clause in a business-to-consumer contract (not negotiated by the consumer) is unfair if it causes a significant imbalance in the parties’ rights and obligations under the contract, to the detriment of the consumer. The CJEU ruled that the UCTD, as transposed into Latvian law, applies to the contract between the professional services provider and the athelete because the athlete was not yet engaged in professional sport at the time the contract was signed. The status of “consumer” must be assessed at the time of the conclusion of the contract. Consequently, the athlete was a “consumer” within the meaning of the UCTD. The CJEU ruled that the UCTD applies even if the individual later embarks on a professional career.Continue Reading CJEU Rules on Fairness of Remuneration Clause in Sports Contract