What should you know before entering into representation agreements under Swiss law?

In the realm of representation agreements, many parties conclude contracts for a one-off service. For instance, in a sporting context, an agent can undertake a mandate from a principal to enable him/her to find and contact clubs in a particular jurisdiction on behalf of the principal for a specified duration. On the other hand, the parties may establish a long-term relationship. For example, a player may enter into an agreement with an agent whereby the agent is tasked to represent the player in transactions and also conduct several other tasks for the player for a couple of seasons.

The scope of work of the sports agents has evolved significantly over the years. Even the conditions of remuneration, nature of payments, and freedom in conducting the activity have changed. Agents are not just hired to assist a player or a club regarding transfers, now they also assume added roles such as managing the player´s image rights, social media, securing sponsorship deals and finding other business opportunities which makes it imperative to understand and construe such activities in accordance the Swiss Law.

The article highlights some of the main provisions under the Swiss Code of Obligations (“SCO”) that govern the representation agreements and provides recommendations for sports clubs, coaches or players with agents entering into these contracts under Swiss Law.

The author draws on examples from cases at the Court of Arbitration for Sport (“CAS”) and the Swiss Federal Tribunal (“SFT”)) to help illustrate the importance of being aware of these issues entering into such agreements.

Introduction

In the sports industry, the author has observed many intermediaries/agents placing reliance on Swiss law either on a principal basis or on a subsidiary basis to govern their contractual relationship with the clubs, players, coaches and other agents. Some of the governing bodies in sports do cater for regulations that govern the role of an agent. Whereas, in football, the partial suspension^[1] of the current FIFA Football Agent Regulations (“FFAR”) has resulted in many federations suspending their relevant national agent regulations partially or completely and as a result thereof, Swiss law appears to have, in the author’s experience, gained prominence as the preferred choice of law, especially in international transactions.

In general, particularly for a transaction with an international dimension, the parties tend to rely on a neutral law and since one of the most prominent adjudicatory bodies in sports, the CAS, has its seat in Switzerland, it has been observed that such parties tend to choose Swiss Law. Most of the statutes of an international sporting association and the CAS Procedural Rules also cater to the application of Swiss law.