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Athlete Representation

Rough Draft: Examining the Enforceability of NBA Draft Promises
Filed August 28, 2007 by Mike Gerton

When NBA general managers chat with the representatives of former college stars and budding international talents during May and June, you can bet that they are discussing more than jersey numbers and shoe sizes. Over sleek BlackBerry devices and behind private gym doors sports agents and prominent team executives are entering into so-called draft promises that purport to provide security for both sides come draft day. But what exactly is a draft promise and is one legally enforceable?

What is a draft promise?

Though no blueprint exists for a “standard” draft promise, they have commonly taken several forms during recent years. These deals often originate when a franchise promises to select a draft entrant, presumably in a specific round with a specific pick. Teams make these promises for several reasons such as to encourage a player to cancel or decline individual workouts for other teams, to induce a player considering pulling out of the draft to remain in or simply to start the parties’ professional relationship off with a show of good faith that could benefit the team down the road when it is time to negotiate that player’s first non-rookie contract.

In return, the player is usually asked to do little more than stay eligible for the draft and abstain from auditioning for other clubs. Additionally, the promising team may require that the draftee and his agent not discuss the arrangement with the league or media.

But what would happen if an NBA team passed on a player they had promised to take? Would the spurned athlete have a legal cause of action against the franchise? If not, are there any ramifications at all for that sort of devious behavior?

Are draft promises legally enforceable?

The first issue to examine is whether or not a legal contract is in place. A contract is defined as a promise or set of promises for breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty. A contract may be oral or written and is created when an offer made by one person is accepted by another before it can be revoked.

Mutual assent, offer, acceptance, and consideration are the four elements required to conclude an enforceable agreement. A contract may only be enforceable if it expresses with definiteness and certainty the nature and extent of the parties' obligations and the essential terms of the agreement. In other words, an agreement that omits an important term, or is otherwise too vague or indefinite with respect to essential terms, is not enforceable.

Here, an NBA team could claim that any oral promise offered to a draft hopeful lacked the requisite definiteness needed to create a contract. They might argue that it was unclear as to whether or not the promise was conditional on some other event or scenario. For instance, if the Washington Wizards promised to take a certain player with the 16th overall selection in the 2007 NBA Draft it would appear the agreement was implicitly conditioned on the unavailability of former college superstars Greg Oden and Kevin Durant. Or perhaps the promise was thought to be dependent on the outcomes of potential trades on or near draft day. Because draft promises are not concluded in writing it would be easy for a club to claim that any oral offer was not nearly as definite as the promisee and his agent may have been led to believe.

Additionally, a draftee could have a problem showing consideration. Defined by the Restatement (Second) of Contracts § 71 (1979) as any performance or return promise that is sought by the promisor and given by the promisee, consideration in this case would call for the player to give up some legal right they would have otherwise retained. He might claim that remaining eligible for the draft and/or declining individual workouts with other clubs were acts sufficient to constitute consideration. However a court would probably find that argument weak. As soon as a collegiate player signs with an agent he forfeits his amateur status and, in so doing, loses his right to return to school to play. And while a player may have chosen not to work out for other teams, proving that such a decision was the result of relying on a draft promise and not some tactical strategy implemented by a cunning sports agent could be difficult.

As a side note, the Statute of Frauds, which requires that a contract be in writing, is unlikely to play a role in this analysis. It is true that first round draft picks are guaranteed multi-year deals, which are covered under the Statute of Frauds umbrella as contracts that cannot be completed in one year. In this case, however, the contract at issue is not the player’s actual employment contract but rather the oral promise by the franchise to select the player. That contract can indeed be fulfilled within one year’s time and, therefore, does not require writing.

A draftee and his agent might also explore a promissory estoppel claim. Under the doctrine of promissory estoppel, a party that relies on a promise may seek redress even though an enforceable contract is not in place. Section 90(1) of the Restatement defines a four-pronged test to determine whether a party should be prevented from denying the existence of a contract. The elements, which must all be met, are: a clear and definite promise; where the promisor has a reasonable expectation that the offer will induce action or forbearance on the part of the promisee; which does induce actual and reasonable action or forbearance by the promisee; and causes a detriment which can only be avoided by the enforcement of the promise.

In the case of a draft promise, a player would likely have a difficult time proving the first and second elements of the test. Without anything down in writing, showing that a clear and definite promise was offered and accepted would be a dicey task for the player and his agent to complete. And in regards to the element of reasonable reliance, a court could potentially find that, when dealing with a business model such as the NBA that revolves around the constant calculation of risks, fabrication of rumors and massaging of egos, acting on anyone else’s word is never a reasonable move.

Conclusion

Due to a lack of definiteness and clarity of the key terms of the deal, any oral promise by a team to draft a certain player is unlikely to be legally enforceable. But don’t expect either side to consider resolving this issue by agreeing to something in writing. Article XIII, Section 2 of NBA’s Collective Bargaining Agreement specifically stipulates that: “At no time shall there be any undisclosed agreements (i.e. undisclosed to the NBA) of any kind, express or implied, oral or written, undertakings, representations, commitments, inducements, assurances of intent, or understandings of any kind, between a player (or any person or entity acting with authority or apparent authority on behalf of such player) and any Team (or Team Affiliate) … involving consideration of any kind to be paid, furnished or made available to the player, or any person or entity controlled by or related to the player, by the Team or Team Affiliate either during the term of the Player Contract or thereafter.”

Clearly, the league expressly prohibits these types of agreements and, for that reason, no general manager wishing to keep his job would ever consider entering into a draft promise in writing.

Though there are likely no legal repercussions for breaching a draft promise, franchises still have incentive to keep their word on these types of agreements. Because the NBA business community is so small, reputation can play a major role for players and teams alike come free agency. Often times, marquee firms and agents represent a full stable of coveted players. And welshing on a draft promise to one of them could severely damage a team’s relationship with that agency and its other star clients down the road.