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You are here: LEGAL ISSUES : Related Article
Compromise Agreements
What are they? Compromise Agreements, or Termination Agreements as they can also be called, are exactly as the name suggests, an Agreement signed between a Club and a Player Terminating (or Compromising) an existing playing contract for a sum of money. Usually termed a "pay-off".

What content exists in such an Agreement? The Agreement will be between the player and Club and mention will be made to the current contract the player has with the Club ie. the date the contract started. The sum of the "pay-off" will be stated as well as the date when the contract was terminated as a result of acceptance of the sum.A main section of the Agreement will be devoted to listing the Employment Rights the player forgoes in accepting the "pay-off", ensuring from the Clubs point of view that there will be no more issues arising between the player and the Club regarding the Termination of the playing contract once payment is made.

The Agreement will also ensure the player has taken legal advice, who will have to sign the document as well as the player, and there will also be a confidentiality clause for good measure.

What factors should a player take into consideration before signing a Compromise Agreement? This is obviously a big decision for a Player to take, accepting a "pay-off", and should not be made without careful consideration.From the Players point of view, he will be forgoing his right to remain in contract being paid his basic salary, regardless of whether he plays first team or not.

By not playing, however, whether it be for the first team or even the reserves, his playing career will naturally be affected and the longer he stays in this situation the more harm it will do to his career prospects.The player will have to consider whether he could easily find another contract if he did accept a "pay-off" and ideally this would be arranged before accepting any sum. Also, the player would have to consider what his market value would be elsewhere if he were to move and how similar the terms would be at another Club in relation to bonuses and contract length.

The main factors to consider are:
  • Age - at what stage are you in your career?
  • Family situation - married, children?
  • Playing Position
  • Current Contract
  • length and terms
  • Options elsewhere

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