The football law annual report by FIFA highlights a case involving a Latvian club. The solution reached by CAS demonstrates some important considerations for both players and clubs when looking to find a cooperation.

Letter of Interest or Binding Contract? Lessons from a Recent FIFA and CAS Dispute case

In the world of professional sports, particularly football (soccer), the line between a “Letter of Interest” and a binding employment contract can be surprisingly blurry. A recent dispute involving Latvian club Rigas Futbola Skola (RFS) and Brazilian player Pedro Igor Martins da Silva highlights the potential pitfalls of unclear agreements and the importance of robust contract drafting.

The Case in Brief:

In February 2023, RFS expressed interest in Pedro Igor through a Letter of Interest. The player participated in a training camp in Turkey. However, differing accounts emerged regarding his subsequent departure.

• The player claimed he was denied entry to Latvia due to visa issues and advised to return to Brazil.
• RFS, on the other hand, asserted the player voluntarily withdrew due to homesickness.

Both parties filed claims with FIFA, alleging breach of the Letter of Interest. The FIFA Dispute Resolution Chamber (DRC) rejected both claims, finding the Letter of Interest was not a binding contract.

This outcome was satisfactory to the club, but not to the player. The player appealed to the Court of Arbitration for Sport (CAS).

Key Legal Takeaways:

• Admissibility of Appeal: A preliminary issue arose regarding the admissibility of the player’s appeal. He filed two documents, a “Statement of Appeal” and an “Appeal CAS.” The CAS Sole Arbitrator clarified that the appeal brief can be filed with the statement of appeal and that the “Appeal CAS” document met the required standards. This highlights the importance of understanding procedural rules and ensuring timely and compliant filings.
• Letter of Interest vs. Binding Contract: The core issue was the legal nature of the Letter of Interest. The CAS arbitrator emphasized that the player had to prove a binding employment relationship. Participation in a training camp, while demonstrating interest, does not automatically create a contract.
• Essential Elements of a Contract: Crucially, the Letter of Interest, though signed by RFS’s sporting director, lacked the player’s signature confirming acceptance. Furthermore, it was contingent on a transfer agreement with Floresta EC, which never materialized. The arbitrator concluded that the Letter of Interest was merely an offer, not a binding agreement.
• Importance of Clear Contractual Language: This case underscores the critical need for clear and unambiguous language in contractual documents. Letters of Interest should explicitly state their non-binding nature if that is the intent. Conversely, if the intent is to create a binding agreement, all essential terms, including signatures from all parties and any conditions precedent, must be clearly defined.

What This Means for Clubs and Players:

This case serves as a cautionary tale for both clubs and players involved in international transfers. Ambiguous agreements can lead to costly and time-consuming disputes.

How We Can Help:

If you are a sports club, player, or agent facing similar issues, or if you have any questions regarding contract drafting, interpretation, or dispute resolution in sports law, we can provide expert legal guidance.

• Contract Drafting and Review: We can assist in drafting clear and comprehensive contracts that protect your interests and minimize the risk of disputes.
• Dispute Resolution: We can represent you in proceedings before FIFA, CAS, and other relevant sporting bodies.
• Legal Advice: We can provide expert legal advice on all aspects of sports law, including contract law, transfer regulations, and disciplinary matters.

Don’t leave your contractual rights to chance. Contact us today for a consultation and ensure your agreements are legally sound. Initial review of a contract + <30 minutes one discussion is offered for 80 euro during February 2025.

Disclaimer: This blog post is intended for informational purposes only and does not constitute legal advice. You should consult with a qualified legal professional for advice tailored to your specific situation.

Extract from the FIFA report

In February 2023, the Latvian club Rigas Futbola Skola expressed its interest in the Brazilian player Pedro Igor Martins da Silva to Floresta EC through a Letter of Interest. The Player participated in Riga’s training camp in Turkey, and following this, the Parties had different views regarding the events that led the Player to travel to Brazil.

The Player claimed he travelled to Riga but was denied entry due to a lack of a visa. He was informed by another player at the Club that staff had advised him to return to Brazil because he could not play without the necessary permissions. Conversely, the Club asserted that the Player chose not to accept the employment offer due to unhappiness and homesickness, deciding instead to return to Brazil and continue playing for Floresta EC.

Both the Player and the Club filed claims before FIFA, alleging the breach of the Letter of Interest.

The DRC rejected both claims, considering that the Letter of Interest was never intended to be a binding contract. The Player appealed before CAS. As a preliminary matter, the Sole Arbitrator addressed the Respondent’s objection to the admissibility of the Appeal, as the Player filed two documents within the time limit for the filing of the Appeal: one document named “Statement of Appeal” and another called “Appeal CAS.”

The Sole Arbitrator determined that the Code allows for the appeal brief to be filed together with the statement of appeal. Although the Appellant did not request that the Statement of Appeal be considered as the Appeal Brief, the Sole Arbitrator found that “Appeal CAS” met the requirements of Article R51 of the Code.

On the merits, the Sole Arbitrator determined that the Player had to prove the existence of a binding employment relationship with the Club.

Although the Player participated in the training camp in Turkey, this alone did not establish a valid contract.

Moreover, the Letter of Interest, signed by the Club’s sporting director, was not returned with the Player’s signature, and no evidence was provided to confirm its return.

The Sole Arbitrator further concluded that the Letter of Interest was an offer, not a binding agreement, contingent on the Club reaching a transfer agreement with Floresta EC, which did not occur.

Given the above, the Sole Arbitrator dismissed the appeal.