As a student-athlete earning income through Name, Image, and Likeness (NIL) deals, you’ve entered into a world of business contracts and legal responsibilities. These contracts, whether for endorsements, sponsorships, or appearances, come with terms and conditions that both you and the other party are expected to follow. But what happens if you, as the student-athlete, fail to meet your contractual obligations? Can you get sued?
The answer is yes, you can be sued for breach of contract if you don’t uphold your end of the deal. Here’s what you need to know about the risks, how to avoid legal trouble, and what to do if you find yourself in a potential lawsuit.
Understanding Your NIL Contractual Obligations
When you sign an NIL deal, you are entering into a legally binding contract. This means that both you and the other party (usually a business or brand) are agreeing to certain responsibilities and terms. The obligations outlined in your contract could include:
- Delivering content (social media posts, videos, etc.) by a specific date
- Making appearances or attending events
- Wearing or using a brand’s products in your public appearances or games
- Exclusivity agreements (not endorsing other competing brands)
Failing to meet any of these requirements can be considered a breach of contract, and depending on the severity, the company may have the right to take legal action against you.
What Happens If You Breach a Contract?
When you don’t fulfill your contractual obligations, you’re said to be in breach of the contract. Breaches can range from minor to significant. For example:
- Minor Breach: You deliver a social media post late or miss an appearance but later make up for it.
- Material Breach: You completely fail to fulfill a major part of the contract, such as not promoting the brand at all after being paid upfront or endorsing a competitor brand against your exclusivity agreement.
In a material breach, the other party may sue you to recover any damages they’ve suffered due to your failure to perform.
The Consequences of a Lawsuit
If a company decides to sue you for breach of contract, several things could happen:
- Damages: The company may seek financial compensation for any losses they incurred because you didn’t meet your obligations. For example, if you were paid $50,000 for a series of social media posts and you failed to deliver, they may sue to recover that amount.
- Reputation Damage: Lawsuits can negatively impact your personal brand and reputation. Other companies may be hesitant to work with you if they see you’ve been involved in a legal dispute.
- Legal Fees: Defending yourself in a lawsuit can be costly. Even if you eventually settle or win the case, the legal fees can add up quickly.
How to Avoid Breaching Your NIL Contract
To avoid the legal and financial consequences of a breach, it’s crucial to be diligent in following the terms of your NIL agreements. Here are some steps you can take to stay on top of your contractual obligations:
Understand the Contract Before Signing Never sign a contract without fully understanding what’s required of you. Read every detail, and if anything is unclear, ask questions or seek advice from a legal professional. Many contracts contain language that can be confusing, so it’s essential to know exactly what you’re agreeing to.
Work with an Attorney NIL contracts can be complex, and even minor missteps can lead to a breach. It’s a good idea to work with an attorney who specializes in contracts, especially NIL agreements, to review any deals before you sign. They can help identify any potential issues and ensure the contract is fair and manageable.
Stay Organized Keeping track of your NIL obligations can be challenging, especially if you’re juggling multiple deals at once. Make sure to stay organized with a calendar or task management system to track deadlines, deliverables, and appearances.
Communicate with the Company If for any reason you believe you won’t be able to meet a contractual obligation, communicate with the company as soon as possible. In many cases, they may be willing to work with you to extend deadlines or modify the terms of the deal. Proactive communication can prevent potential legal issues down the line.
Don’t Overcommit It’s easy to get excited about NIL opportunities, especially if multiple companies are offering deals. However, overcommitting can lead to missed deadlines and unfulfilled promises. Be realistic about what you can handle alongside your academic and athletic responsibilities.
What to Do If You’re Sued for Breach of Contract
If you find yourself facing a lawsuit for breach of contract, don’t panic. There are steps you can take to address the situation and potentially avoid serious legal consequences:
Consult with an Attorney: The first thing you should do is contact an attorney who specializes in contract law. They can review the case and help you understand your options.
Try to Settle: In many cases, lawsuits don’t go to court. Instead, the parties involved may reach a settlement. This could involve repaying the company or renegotiating the terms of the contract. A settlement can help you avoid the costs and stress of a prolonged legal battle.
Review the Contract for Loopholes: Sometimes, a contract may not have been clearly written, and the company’s claims may not hold up in court. An attorney can help you determine if there are any legal loopholes or defenses that could work in your favor.
Take Responsibility (If Necessary): If you’re at fault, taking responsibility and cooperating may lead to a better outcome. In some cases, admitting fault and offering to make things right can prevent the situation from escalating.
Final Thoughts: Be Mindful of Your Commitments
NIL opportunities can be incredibly exciting and lucrative, but they come with serious responsibilities. Failing to meet your contractual obligations can lead to lawsuits, financial losses, and damage to your personal brand. To avoid these pitfalls, always make sure you fully understand your contracts, stay organized, and seek professional guidance when needed.
Written by Pat Brown, MBA, Former D1 Player