By Ted Curtis
Has your association ever entered into a handshake agreement? It seems to happen a lot in the officiating business — but it often seems to be the source of much trouble.
Take this example: A league enters into a handshake agreement with an officials association to handle all the league’s games. The responsibility for handing out game assignments is given to the association assigner, with the league paying little attention, if any, to who is working a particular game. And everything seems just fine.
Everything seems fine, that is, until the monthly association meeting. Joe raises his hand and says that he worked a game two months ago and still has not been paid. Susan says that she hasn’t been paid either. Neither has Bob or Bill or Stephanie or Michael. Pretty soon, you realize that your association is in trouble. Your assigner hands out games assignments and your officials work the games, but the league hasn’t been paying, probably because it doesn’t know pay, since it hasn’t the slightest idea who worked each game.
Now what? Understand that the league may resist paying your officials — and they might have good legal ground to do so. After all, the only agreement that your association has with the league is a handshake agreement, legally termed an “oral contract.” You must understand that such oral contracts are invitations for disaster.
The term oral contract actually is a contradiction in terms. When you think of a contract, you think of a legally binding agreement representing what lawyers like to call a meeting of the minds as to the terms of the agreement between two parties. But an oral contract generally is not binding and often cannot be enforced — perhaps you could say that an oral contract is not a contract at all.
It is no wonder the league is hesitant to pay, especially absent a written binding contract requiring it to do so. Of course, in the law there are exceptions. The area of oral contracts has two very narrow exceptions.
Exceptions. The first exception states that an oral contract may be binding if it constitutes an “implied contract.” An implied contract is one in which two parties have a meeting of the minds as to the exact terms of an agreement without saying a word. Your local barber shop offers the perfect illustration. When you walk into your barber shop, you wave hello and sit in the barber’s chair. Without saying a word, you and the barber have just entered into a valid and enforceable implied contract: He will cut your hair and you will pay the price posted on his wall.
In our officials association’s problem, you might convince the league that an implied contract has been formed. Without having to say a word, the league agreed to pay the officials by having them come to the fields and work the games. After all, as the reasoning for justifying an implied contract usually goes, why else would the officials work the games and the league permit them to do so? Out of the goodness of their respective hearts? Certainly not. Rather, you might argue, it was because an implied contract was formed between the two parties, requiring the league to pay for the officials’ services.
The second exception may be just as slippery to handle. An oral contract may be binding upon two parties if their “part performance” demonstrates the existence of a meeting of the minds between the parties as to the terms of the agreement. Let’s say you enter into an oral agreement with a plumber to fix your sink for $500. If the plumber walks away after completing half the job, you might claim that the plumber must return to finish the work because you have a valid contract — she will completely fix the sink, you will pay her $500 — evidenced by the fact that the plumber started the job in the first place.
Here, you might argue that both parties’ part performance — the association sending officials to games and the league paying some of them — demonstrates that a contract exists.
It is critical that you understand those exceptions are highly limited, that not all state laws view implied contracts or part performance quite the same way, and that attempting to use either of those exceptions to secure payment for your officials should be reserved as a last-ditch legal effort, one best undertaken by your attorney.
While you and your association attorney might work hard to fix the problem this? time, what about the next time that issue arises? How can you prevent the same thing from happening again?
Three words: write it down. The best way to avoid problems in enforcing oral contracts is never to enter into them in the first place. Entering into a written agreement — something as simple as a letter outlining the terms of the agreement, signed by the presidents of both the association and the league — secures your rights, assures that the league understands its responsibilities and makes the resolution of most disputes relating to your officials’ work easier to handle.
As always, when faced with questions of contract law — particularly those involving tricky, narrow interpretations of the law — consult your association attorney before taking any action.
(Ted Curtis is a journalist, sports attorney and professor of sports management in the graduate studies program at Lynn University in Boca Raton, Florida. He is a frequent contributor to NASO publications. This article is intended for general informational purposes and is not legal advice. If legal advice is required, a competent professional should be consulted.) |
