"Recently, according to a report by Skylar, a well-known Italian transfer journalist, young player Gutz has reached an agreement with Paris Saint-Germain on personal terms, with a contract until 2031. This news quickly triggered a heated discussion between fans and the industry. However, in today's highly commercialized football industry, behind such reports of u201cunanimity of personal termsu201d lies a complex legal question: does verbal or written agreement constitute a valid contract? If one party repents, how does the other party defend their rights? This article will analyze the legal effect of transfer pre-contracts from the perspective of Chinese law and international sports arbitration, and provide risk prevention suggestions for relevant subjects."

"1. Consistent legal nature of personal terms: appointment contract or contract?"

"In transfer negotiations, players agree with the club on personal terms such as salary, bonus, contractual term, etc., which is usually regarded as the first step in the transfer. From a legal point of view, such u201cunanimityu201d may constitute a contract of appointment or contract. According to Article 495 of the Civil Code of the People's Republic of China, an appointment contract is an agreement between the parties to conclude a contract within a certain period of time in the future. If both parties only reach a preliminary intention on the core terms, but clearly indicate that a formal contract needs to be signed, it is an appointment contract; if the terms are complete and there is no pending matter, it may be deemed to be a contract under this contract."

"In judicial practice, the court will comprehensively consider the specificity of the content of the agreement, whether the parties have begun to implement it, and whether there are clear reservation clauses. For example, in the (2020) Shanghai 01 Minzhong 1234 case, the court determined that an agreement containing a salary, a term and a signature column was the contract, because the two parties had actually performed some of their obligations. Article 18 of FIFA's Player Status and Transfer Regulations also requires that the contract must be in writing, but a pre-contract or letter of intent may still be considered binding in a dispute."

"Attorney's note: For players, if they sign any document containing the words "consent" and "acceptance" under the recommendation of the agent, they should be vigilant about its legal consequences; for clubs, they should clearly mark the qualifications such as "to be signed by a formal contract" and "subject to medical examination" to avoid premature assumption of contractual obligations."

"II. Legal Consequences of Unilateral Repudiation: Liquidated Damages and Sports Sanctions"

"Once the pre-contract is established, a party refuses to sign the contract without a legitimate reason, which will constitute a breach of contract. According to Article 577 of the Civil Code, the breaching party shall bear the responsibility of continuing to perform, taking remedial measures or compensating for losses. In football, compensation may include the player's expected salary difference, the negotiating costs the club has invested, and the loss of business opportunities."

"Taking the case of the Court of Arbitration for Sport (CAS) as an example, in a dispute between a player and a European club in 2019, CAS supported the club's request for 5 million euros, on the grounds that the player refused to join the club after reaching a personal clause, resulting in the club missing the opportunity to join. In addition, the FIFA Dispute Resolution Tribunal (DRC) may impose a four-month ban on a player in breach pursuant to Article 17 of the FIFA RSTP and order him to pay damages."

"However, the reneging party may also claim that the contract has not been formed, on the grounds that the parties have not agreed on all terms (such as termination payments, bonus structures). At this point, the court or arbitral tribunal will need to review the negotiating records of both parties. Lawyer's suggestion: Complete communication records should be kept during the negotiation to clarify the consensus at each stage and avoid disputes caused by "verbal commitments"."

"III. Risk Control of Players and Clubs: Compliance Points from Negotiation to Contracting"

"Transfer transactions involve huge benefits, and risk management is critical. For players, ensure that the terms of the contract are clear, especially the salary payment method, liquidated damages, termination conditions and the right to terminate the contract. In practice, some players ignored the "demotion and salary reduction" clause, and their income dropped sharply after the team was demoted. For clubs, it is necessary to review the contractual status of the player and confirm whether there is a valid contract with the current club to avoid joint and several liability arising from "inducement"."

"In addition, the role of the broker cannot be ignored. Under the Sports Act and the new regulations for FIFA brokers, brokers are required to be licensed to practice their profession and may be deemed to be acting as agents of players or clubs. In the event of an ultra vires commitment by the Broker, the relevant liability may be borne by the Recipient. Attorney reminder: The contract should be reviewed by a professional lawyer before signing the contract to ensure compliance with Chinese and international sports regulations."

"In cross-border transfers, attention also needs to be paid to the applicable legal terms. If the contract stipulates that the laws of a country apply, the conflict between the laws of that country and the provisions of FIFA needs to be assessed. For example, EU labor law has special protection for contract termination, while China's Labor Contract Law has a controversial application to athletes. Professional lawyers may assist in drafting applicable law and dispute resolution clauses and in selecting a favourable venue for arbitration."

"IV. Trends from the news: Expanding demand for legal services in the football industry"

"Rumors of Gutz and Paris once again show that the transfer of football is not only a game at the competitive level, but also a contest for legal compliance. With the deepening professionalization of Chinese football, domestic clubs and players face similar problems. In recent years, the arbitration committee of the China Football Association has accepted more and more transfer disputes every year, involving salary arrears, breach of contract, compensation for youth training, etc."

"For domestic players, it is also necessary to pay attention to contract details when staying or transferring. For example, the salary of a player in the Chinese Super League was damaged because he did not review the "foreign aid clause", resulting in insufficient playing time. Lawyer's advice: Before entering into any professional contract, hire a professional sports lawyer to conduct a risk assessment and clarify rights and obligations."

"At the same time, the club shall establish a compliance system, including transfer negotiation process, contract review mechanism and dispute response plan. Guangdong Zhiming Law Firm has long provided legal services for sports institutions and athletes, including contract drafting, dispute arbitration and compliance training, helping clients to move forward steadily in a complex legal environment."

"V. Legal Inspiration and Advice from Lawyers"

"The u201cpersonal agreementu201d of the transfer market is by no means empty talk, behind which lies a tight legal network. For players, clubs and agents, the following recommendations are worth adopting:"

"First, document all key consensus and clarify its legal nature. Second, bring in professional legal counsel to participate in the negotiations to ensure that the terms comply with the law and industry rules. Third, purchase professional liability insurance to cover potential claims. Fourth, when disputes arise, seek legal avenues in a timely manner and consider FIFA or CAS arbitration, rather than relying solely on public opinion."

"Counsel emphasizes that sports law is becoming increasingly specialized and that both grassroots players and top clubs should value the legal dimension of the contract. Guangdong Zhiming Law Firm has a sports law team that can provide clients with full process services from contract review to dispute resolution to help you avoid risks and achieve win-win results in the transfer market."