CONSUMER LAW | The ECJ on unfair terms in sports contract

On 20 March 2025, the EU Court of Justice (ECJ) issued its judgment in Case C-365/23, concerning a contract concluded between a then-minor Latvian athlete, and a company specialised in sports careers. Pursuant to the contract, the athlete undertook to pay 10% of all the net income which he would receive during his sport career for 15 years, provided his monthly earnings exceeded euro 1,500. After becoming a professional basketball player, the athlete faced a payment obligation of over euro 1.6 million. The case was brought before the Latvian Supreme Court, which referred it to the ECJ to ascertain whether the Directive on unfair terms in consumer contracts applied to the contract at issue, and, if so, the extent to which it precludes such a term. The ECJ held that the Council Directive (EEC) No. 93/13 of 5 April 1993 on unfair terms in consumer contracts (the Directive) applies in the case at hand, whereby the contract has been concluded between, on the one hand, a supplier carrying on an activity in the field of sports development and, on the other hand, a ‘rising star’ of minor age, who, when that contract was concluded, did not pursue the sporting activity on a professional basis. Having established the applicability of the Directive, the ECJ stressed that a contractual term is unfair only if it is not drafted in plain, intelligible language, in so far that the consumer must be provided with all the information necessary to assess the financial consequences of their commitment. Furthermore, the Court clarified that a term requiring a young athlete to pay 10% of future earnings for 15 years does not automatically create an imbalance. However, the fact that the athlete was a minor at the time of signing the contract, and that the contract was concluded by his parents on his behalf, are relevant factors in assessing the fairness of the term.  Finally, the Court also stated that when a national court deems a contract unfair under the Directive – based on applicable national law, fair and equitable market practices at the time the contract was concluded, and any other relevant circumstances –, it may not reduce the amount payable by the consumer to the extent of the costs actually incurred by the seller or supplier in performing the contract.

Newsletter n. 107 – May 2025