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A sponsorship agreement is a binding contract with risks if not properly drafted — especially since sponsorship relationships often run for extended periods. When drafting, pay particular attention to the association regulations, signing authority, core agreements, a force majeure clause, and legal review. Below you will find five practical tips for a strong sponsorship agreement.
1. Check whether the contract complies with the association regulations
The sports world often has strict internal rules and federation regulations that affect sponsorship opportunities . Check whether the sponsorship is in line with board decisions and regulations. Sometimes procedural rules apply or certain forms of sponsorship are not permitted; rulings by disciplinary bodies can also have an impact.
2. Check the signing authority
Check who within the organization or association authorized to sign . Sometimes a separate resolution of the general meeting of members is required to provide the agreed consideration. Also ensure that the agreement complies with the statutes so that everything is legally valid.
3. Do not forget essential information
A sponsorship agreement must contain clear agreements regarding the mutual core performances: what does the sponsor receive in exchange for their contribution, and what is expected of the sponsored party? Additionally, include:
- the duration of the deal;
- the way in which disputes are resolved.
4. Pay attention to force majeure
The coronavirus crisis showed how important a force majeure clause is. What happens if competitions are suspended due to a pandemic or other unforeseen circumstances? Document this. This is evident from a case in which a sponsor wanted a portion of the sponsorship money back after the competition was halted due to the coronavirus.
5. Have the contract checked or drafted by a lawyer
It is wise to have a sponsorship agreement checked; that saves a lot of headaches. With our ContractCheck™, an experienced legal expert assesses the contract for pitfalls and risks. If you are unable to draft it yourself, have a specialist do it so that you avoid any hassle with the sponsor afterwards.
Frequently Asked Questions
Is a sponsorship agreement legally binding?
Yes. It is a binding contract. If it is not drafted properly, it can lead to disputes and financial risks.
Why is signing authority important?
If someone signs without authority, or if the agreement does not comply with the articles of association, the agreement may be invalid or non-binding. Check this in advance.
Why do I need to include a force majeure clause?
To stipulate what happens in the event of unforeseen circumstances, such as a pandemic that brings competitions to a standstill. Without that clause, disputes regarding reimbursement arise quickly.
What is the minimum content of a sponsorship agreement?
The mutual core performances, the duration, a force majeure and dispute resolution mechanism, and agreements that comply with the association regulations and the statutes.
Have a sponsorship agreement drafted or reviewed?
A good sponsorship agreement prevents lengthy disputes and protects both parties. We review or draft your sponsorship agreement, paying attention to association regulations, powers, and force majeure.
View our expertise in sports law or schedule a no-obligation intake consultation.
