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Wednesday, 7 September 2011

The Dummy Contract

A new form is being used by clubs in India in relation to signing foreign players. At the point the player applies for his visa to go to a club on trial he signs a ‘dummy’ contract with the club and usually a form of cancellation in case the club do not sign him. This enables the player to acquire an employment visa valid throughout the period of his proposed contract with the club and endorsed such that he is only able to play for that club. In this regard it streamlines and simplifies the process and if the player and the club subsequently agree terms and a new contract is signed there are no issues.

If however the player and club don’t agree terms the problems can begin. If the player receives an offer from another club whilst on trial the ‘dummy’ contract – which technically is a legally binding contract - can be used to prevent him from taking up that offer. At one level this is fair enough, in so far as if a club has paid for the players flights and accommodation etc during the trial then it’s fair and reasonable that they should have some protection from another club walking in and taking him. Equally the player has a right to make the final decision as to who he wants to play for.

A reasonable protection might be for the club that brings him over on trial to be fully reimbursed by the club he eventually signs for if the two clubs are different. As things stand the player can be prevented from signing for any other club because he has signed the ‘dummy’ contract – the ‘dummy’ contract, with lower wages etc, can be imposed by the club that brought the player over on trial if that’s what it decides to do. The player is powerless.
Even if the player signs the dummy contract but changes his mind before he flies over he can have a problem. Once the contract is signed, even if the player never sees anyone from the club, and even if the club incurs no costs, they can prevent the player from signing for another club by virtue of the dummy contract. They can demand a transfer fee to release the player even though he has not even had a trial with them and he’s not set foot outside his home country. This can’t be right.

In my experience most players would not understand the full implications of what they’re signing when they put pen to paper on the ‘dummy’ contract. If the player has an agent then the agent should know but if the full purpose and intent behind the contract is not disclosed then there’s a possibility that the justification of ‘easing the visa process’ will be accepted. This is especially true where clubs have earned a reputation for being ‘fair’ in their dealings with players. There are many instances in business more generally where protections in law are in place but without the intention of these ever being used except in extreme circumstances.

One solution would be for the player to pay his own travel costs to come on trial. Where a club pays for the player then the ‘dummy’ contract needs to be placed within a broader framework of related rules and/or understandings. Such rules and understandings should be agreed between the clubs, and with the players union, and should be fair to both sides. While the intention of the ‘dummy’ contract may have been positive its application has been fraught with difficulties which need to be addressed.