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Pre-contract agreements?

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There's been a lot of talk recently of pre-contract agreements (Mucha, Beckford) which sounds really positive. Then Beckford's manager comes out with his comments about such agreements not being binding. Can someone please have a go at explaining what the point of such agreements is — are we signing these guys or not??
Chris Jones, Lincoln, NZ     Posted 25/01/2010 at 21:23:55

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Pat Finegan
1   Posted 26/01/2010 at 03:24:14

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Chris, I’m not totally sure about this so please, anyone, feel free to correct me. I think the player agrees to a contract that he will make official at a later time. If Beckford and Mucha have made pre-contract agreements, that means that they have agreed to come play for Everton and have negotiated a salary, benefits, length of deal, etc. They have the opportunity to back out with no penalty, since it is not binding. I believe they are both on a free at the end of the year so they will most likely come play for us. So it is a good thing (if you like Beckford and Mucha) it is not final but they will probably both be here in the summer.

Again, I’m not totally sure so don’t quote me on any of this. But I think that is how it works.
David Ellis
2   Posted 26/01/2010 at 06:55:52

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Chris, Even if they are not legally binding they do serve a purpose. Once a player has signed an agreement it is much harder for them to tinker with the terms because no one likes to feel that they are going back on what they previously agreed (unless there has been a big change of circumstances). It is very common in the commercial world for parties to agree a letter of intent or memorandum of understanding which is not legally binding, but outlines the parameters of the commercial terms. In practice it is difficult for a party to change these terms later (although not impossible).

I believe that these pre-contract agreements are not legally binding because it is against the FA rules to sign a player without the consent of his club, and Mr Beckford is still a Leeds player. However, once his contract has expired then he will be able to enter into a binding agreement with Everton.

It is possible that the agreement with Beckford is legally binding, but conditional on Beckford’s contract with Leeds expiring, i.e. it automatically takes effect from the date of expiry of his contract with Leeds. I am not sure if this kind of conditional agreement is permitted or not. This would be much more useful to Everton than a contract that is not binding at all on Beckford.

However, either way, the agreement is certainly not legally binding on Leeds Utd as they are not a party to it. So if Leeds were to sell Beckford in the January window Everton would have no re-course against Leeds (but they might against Beckford himself depending on the terms of the pre-contract agreement).

Sorry to hypothesise so much in the absence of hard facts. But for all practical purposes you can consider this a deal that is 90% done and that once Beckford’s contact has expired we will probably not have to negotiate his salary etc.
Ciarán McGlone
3   Posted 26/01/2010 at 09:36:36

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A pre-contract is a contract... and has the same legal validity.

Moyes said the same thing in relation to Saha a few weeks ago... they are both talking crap.

Unless an existing contract prevents you from signing a pre-contact with an explicit clause, then you can do what you want.
Danny Burke
4   Posted 26/01/2010 at 09:54:15

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I think (thats THINK) that, when a player is in the last six months of his contract, he can negotiate a "Bosman" style free transfer to a team in a different country. So Saha could talk to Real Madrid, AC Milan etc but not to say Arsenal or Accrington Stanley!

I believe that is why Mucha has been announced on the OS while nothing has been heard of Beckford as it's not a done deal until his contract at Leeds expires.

Gordon Blair
5   Posted 26/01/2010 at 09:53:05

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Ciaran,

A pre-contract agreement is an agreement in principle, prior to a contract being signed. As such, it carries very little legal weight at all.

As it stands, I believe that a player out of contract in the summer can only sign a contract for an overseas club during the winter window, that is what is stopping us having a legally binding contract with Beckford.
Vincent Steele
6   Posted 26/01/2010 at 10:31:58

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Didn’t Manchester Utd have a pre-contract agreement, or something of a similar ilk, with Jon Obi Mikel and when he went to Chelsea they had to pay Utd £12m for the release of the contract?

By that reckoning, if we have signed a pre contract agreement with Beckford and another team tried to sign him in the summer, we would be due a transfer fee for the release of the contract. I’m probably wrong but that's how I’d view the situation.
Ciarán McGlone
7   Posted 26/01/2010 at 10:37:46

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Gordon, an Agreement in principle, is nothing short of a contract — unless it explicitly states as such.

In short, It depends on what the existing contract allows you to do..
Ciarán McGlone
8   Posted 26/01/2010 at 10:40:46

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The Mikel one is interesting - I think Chelsea are now counter-suing United for the money they handed over - apparently the validity or existence of the contract is a matter of dispute..
Marc Williams
9   Posted 26/01/2010 at 10:47:18

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There was a lot of talk about Beckford yesterday on BBC radio BUT NO mention of any pre-contract deal, just speculation as to why no-one is "in" for him?

His agent was lined up to be interviewed on Radio Five Live’s Monday night club last night. I was on a call and missed it so don’t know if this shed any light on what’s going on. Did anyone catch the interview?

Steve Callaghan
10   Posted 26/01/2010 at 10:57:05

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Mucha is confirmed. Beckford — not even a hint on the OS... so, until you see ’Beckford agrees deal’ on OS, then don’t hold your breath — simple as that really.
Vincent Steele
11   Posted 26/01/2010 at 11:13:17

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Is it United that Chelsea tried to counter sue? I remember hearing them trying to claim £16m back from Lyn Oslo as one of their representatives was convicted of fraud.
Alan Kirwin
12   Posted 26/01/2010 at 11:28:18

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A PCA can mean anything it wants, unless there is a standard pro forma for such agreements in football.

However, it was stated last night on Radio 5live that a PCA cannot be signed between two clubs in the same country & thus Beckford could not have done this formally with Everton.

It has since come to light that players in Scotland have signed PCA’s between Scottish clubs. So confusion reigns.

But the absence of any announcement from Everton or Beckford suggests there is no such agreement either way.
Kevin Gillen
13   Posted 26/01/2010 at 11:19:50

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Surely what is more interesting is the the quality of player we are being linked with and what it says about the state of our club.

I’m pleased that something is being done on the goalkeeping front. Howard has done a good job but I have been concerned for some time about the ability of his deputies to step up, without disrespecting them. In my experience you need the best goalkeeper you can get. All the best Everton teams had superb goalies and when we failed, the goalies were always dodgy.

As for Beckford, he seems an arrogant so-and-so but I’d be happy to have him if he backed up his mouth with some goals! I’d love to keep Saha or have Huntelaar but I can’t see it happening. If Saha leaves, I think he will regret it in career terms unless Arsenal pick him up.

Yakubu is not the player he was this season and has been the subject of some derision from the press in the AFCON ("Yakubu waddled down the left wing"). The jury is still out on Vaughan, Anichebe and Agard.

It seems to me that the management are, within their limitations, doing everything they can to get in shape for the next 18 months and I’m encouraged by that. I’d love to see them move to secure Pienaar on a long contract but I think at some point, unless we move on to the next level, he, Fellaini and Rodwell will be horse traded at some point.

I’ve made the point a number of times that I don’t think it is in our power to overcome the big four without some Man City-style takeover but I am encouraged by the big four’s recent attempts to give it away, especially Liverpool.

David Hallwood
14   Posted 26/01/2010 at 11:33:49

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Oh football agents... don'tcha just luv ’em!
Ciarán McGlone
15   Posted 26/01/2010 at 11:36:13

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I hadn’t considered Mr Kirwin’s point that the rules of the membership of the FA may preclude such agreements under their own internal rules...

However, that’s not a matter of law... simply a matter of FA rules.
Andy Codling
16   Posted 26/01/2010 at 12:16:49

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On different note, does anyone know what is happening with Peanuts contract? Or is Billy Bullshit offering him peanuts?
James Elworthy
17   Posted 26/01/2010 at 12:30:49

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I was under the impression having read it on many occasions in papers and internet sites that a pre-contract agreement can only be signed with a foreign club, I have never heard it done before between two English clubs.

The rumour mongers near me who know so-and-so who is a coach at the academy are saying Pienaar is going to Spain in the Summer, we will have to wait and see.

I would cash in on Yakubu; he has done his 3 years and it's time to move on... like he has done all his career. He has received severe criticism over his lack-lustre performances for Nigeria.

Saha appears to be heading to the club who will pay him the most wages, so much for loyalty to the man who resurrected his career... ie, Moyes.

Tony Williams
18   Posted 26/01/2010 at 13:19:04

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Ahhhh... contract law, offer, acceptance, consideration and the intention to create a legal relationship. Pre-Contract Agreement isn’t worth the paper it is written on... probably.

Like when you are buying a house, "subject to contract" means you can still be gazumped but as soon as the contracts are exchanged it is legally binding and you have an action in rem. This Pre-Contract Agreement must be the equivalent to the "Subject to Contract" stage in selling your house... in other words, means fuck all.
James Marshall
19   Posted 26/01/2010 at 13:56:33

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Having just spoken to my company lawyer, he tells me that pre-contracts are worth nothing legally. They are merely a ’moral statement of intent’ and nothing more.

If a player wants to move to a club other than the one he’s agreed to join, then he can do with no law against it.

There may be some FA rules on this, but if there are, they’re merely rules of the governance of players moving from clubs within their own country as someone stated above. Legally, pre-contracts mean nothing.
Jay Harris
20   Posted 26/01/2010 at 13:57:50

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A pre-contract agreement is exactly that.

It used to be known as "Heads of Agreement" or "Heads of terms" in commercial law.

It cannot legally compel the parties to execute the deal but is evidence of serious intent. There is no standard document but it is usual to have a clause "These heads of terms are not exhaustive and are not intended to be legally binding except as specifically set out below".

So basically it makes final contract negotiations easier but as earlier posters said cannot form a contract because Beckford is still a Leeds player and there is no agreement between the clubs.

Knowing Everton’s dealings I would be surprised if we had a pre-contract as actually finalising a contract seems to be too much for them.
Ciarán McGlone
21   Posted 26/01/2010 at 14:02:20

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’Subject to contract’ is a well tested legal concept that vitiates the acceptance process Tony, it has nothing to do with the form of the agreement... as you clearly well know.

Therefore ’subject to contract’ in a pre-contract agreement would work... but the form of the agreement alone would not determine this... it is the drafting which is the important factor — and any restrictions on this from the existing contract.
John Roberts
22   Posted 26/01/2010 at 14:20:07

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An early season ticket PR exercise, promising/suggesting that players will/might be coming in summer!! Not worth the paper they're written on!! A team comes in, offers more wages than us, and away he goes!!
Brian Waring
23   Posted 26/01/2010 at 15:43:48

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I may be wrong, but didn’t we have a pre-contract with Sheff Utd over Kyle Naughton?
Mike Allison
24   Posted 26/01/2010 at 17:14:07

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If the FA or Uefa are the legitimate authority over sporting rules, wouldn’t that make them ’legal’ at least de facto? In theory, you could break your pre-contract agreement but not be allowed to play in any FA or Uefa sanctioned competitions, which would limit your options somewhat.

I’m also pretty sure there’s a difference in those rules between international and domestic transfers, by which I mean Mucha is allowed to sign a proper pre-contract agreement as he’s an international transfer. I don’t think Jermaine Beckford is as it's domestic, so any ’agreement’ in place is of a lesser status than the Mucha one.
Mickey Dee
25   Posted 27/01/2010 at 15:13

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Every law, contract, resolution etc is open to interpretation, just switch to the Iraq Inquiry and listen to the former Attorney General. This is why most lawyers are rich men.

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