MKB Juristen drafts custom legal documents
It is best not to cobble together or copy important contracts, terms and conditions, and other legal documents yourself. We help entrepreneurs on a budget with customized legal solutions, clear costs upfront, and practical explanations.
- Custom contracts, terms and conditions, and legal documents
- Budget-friendly and clear about the costs upfront
- Request a free consultation or a no-obligation quote
A breach does not always entitle the holder to dissolution: in the case of a breach of minor significance, dissolution is omitted (the “unless clause”). A sponsor who dissolved his sponsorship agreement because a football league was suspended was unsuccessful — the judge found that he had lost hardly any exposure and had sufficiently compensated the club. A good sponsorship agreement that regulates what happens upon termination prevents such conflicts.
Disputes persist even in exceptional times. In this case (ECLI:NL:RBNNE:2021:386), a sponsor terminated his agreement after a football competition was suspended due to the coronavirus, and demanded the return of part of the sponsorship money.
What was the case about?
An installation company was a sponsor of sc Heerenveen Women (Women's Eredivisie, KNVB) and paid €55,000 (excl. VAT) per year. In return, the club would prominently mention the company on social media, the website, and the sponsor board, the sponsor was allowed to participate in activities, and received four business seats for all home matches. When the stadium closed from March 12, 2020, and the remaining matches were cancelled, the sponsor requested a partial refund. When this failed to materialize, he terminated the agreement and demanded the return of €22,183.33.
The verdict: dissolution not justified
The club argued that the shortcomings did not justify dissolution. An agreement can be dissolved if a party fails to fulfill its obligations, but a "unless" clause: dissolution is not possible if the shortcoming is of minor significance. The club relied on this: the business seats constituted only a small part of the sponsorship amount, which primarily served to give the sponsor extra exposure.
The subdistrict court sided with the club. The sponsor had virtually no interest in attending the matches (he often did not come to watch), and the club had taken sufficient compensatory measures, such as increased visibility on social media. Consequently, the sponsor had lost hardly any exposure, the dissolution was not legally valid, and the claim for reimbursement was rejected. The sponsor had to bear the legal costs.
The importance of a good sponsorship agreement
Under these specific circumstances, dissolution was not justified, but that will not always be the case — it depends on the situation. Many problems could have been avoided if the agreement had stipulated what happens if a competition comes to a premature halt, for example, which compensatory measures apply in that case.
Frequently Asked Questions
May I terminate an agreement for any breach?
Not always. In the event of a shortcoming of minor significance, dissolution based on the "unless" clause is omitted. Whether a shortcoming is minor depends on the circumstances.
Can I request a refund of sponsorship money if an event is cancelled?
That depends on the agreement and the extent to which you still receive value (such as exposure). If the counterparty offers sufficient compensation, recovery is often not possible.
What do I include in a sponsorship agreement regarding force majeure?
Specify what happens if agreed-upon performances (such as competitions or events) are cancelled: what compensation applies, or is (partial) reimbursement possible?
Have a strong sponsorship agreement drafted
The legal experts at MKB Juristen draft a sponsorship agreement that also covers force majeure and termination. View our expertise in contract law or contact us.
