Consumer Protection in Pro Sports: Basketball Player to Pay 1.6m?

Apr 11, 2025 Benn-Ibler Rechtsanwälte

A contract clause that obliges a young athlete to pay a portion of his earnings if he becomes a professional athlete is clearly abusive.

In the case at hand, the parents of the athlete, who had been a minor at the time, signed a contract with a company that trains young talent for professional sport. In return for the athletic and psychological support provided, the player agreed to pay ten percent of his future earnings to the company if his career was successful. The player, who is now doing very well in a professional basketball league, would have to pay a total of around EUR 1.6 million to the company if the clause were to be upheld. However, the player felt that the contract might be legally abusive and took the matter to court.

The case concerns the legality of such a contractual clause, in particular with regard to consumer protection. In a preliminary ruling, the European Court of Justice (ECJ) has now ruled that such a clause may indeed be abusive.

The Latvian national court, before which the player had brought an action, declared the term unfair. However, the Latvian Supreme Court has now asked the ECJ for a decision. The key question was whether the EU Directive on unfair terms in consumer contracts (2011/83/EU) is applicable to this case and whether the term in question is in breach of it.

In the context of the preliminary ruling proceedings, the ECJ has now dealt with the interpretation and applicability of the EU Directive, finding that the Directive was in principle applicable if the clause was unclear or unintelligible. However, a contractual term, which forms the main part of the contract, can be examined for unfairness only if it is unclear or difficult to understand.

In addition, the ECJ emphasised that the level of protection for consumers in the respective national legal systems can be higher than that of the EU Directive, so that clear and intelligible terms can also be examined for unfairness if national consumer protection goes beyond this. A contract must be drafted in such a way that consumers receive all the necessary information to be able to assess the economic consequences of their obligations. This includes, in particular, a high degree of transparency in order to enable consumers to make an informed decision.

The ECJ leaves open the question of whether there is an abuse in this particular case. However, there are indications of possible abuse, in particular the fact that the contract was concluded on behalf of a minor who was represented by his parents.

CJEU C-365/23 (20 March 2025)