Meanwhile, the coronavirus has been in the country for more than a year. The past year was therefore one of many changes. We went from absolutely no face masks to face masks, and from a curfew for three and a half weeks to a new reality lasting for months. Yet there was also a constant, and the courts continued to settle legal disputes. We regularly zoom in on a notable ruling. This week, we discuss a sponsor terminating the sponsorship agreement following the suspension of the football league due to the coronavirus pandemic.
Sponsor wants to get part of the sponsorship money back
In this case (ECLI:NL:RBNNE:2021:386), an installation company was a sponsor of sc Heerenveen Vrouwen, which participates in the KNVB Women's Eredivisie. A sponsorship agreement was concluded whereby the installation company pays the foundation 55,000 euros (excluding VAT) per year. In return, sc Heerenveen Vrouwen would prominently mention the company as a sponsor on social media, on its website, and on the OSSH sponsor board. Additionally, the sponsor could participate in various OSSH activities and was entitled to four business seats for all home matches.
However, from March 12, 2020, the stadium was closed and no further events took place. Additionally, the remaining league matches were cancelled. The sponsor subsequently requested the refund of part of the sponsorship money. When this request was not granted, he terminated the agreement and requested the refund of €22,183.33. The District Court of Northern Netherlands has now ruled on this case.
Judgment of the sub-district court
According to the foundation, the shortcomings could not justify the dissolution of the sponsorship agreement. It is indeed possible to dissolve an agreement, such as a sponsorship agreement, when one of the parties fails to fulfill its obligations. However, this involves a so-called " unless" clause: this possibility does not exist when the shortcoming is of minor significance and does not justify dissolution. It is precisely on this basis that the foundation relied: the business seats that could no longer be used represent only a small part of the sponsorship amount, which is largely used to give the sponsor extra 'exposure'.
The subdistrict court judge ultimately followed the foundation's reasoning. It ruled that the sponsor virtually no interest in attending the matches, especially since he often did not come to watch the games. In addition, the judge ruled that the foundation had taken sufficient compensatory measures , such as increased presence on social media. Therefore, the subdistrict court judge ruled that the sponsor had lost virtually no exposure and that the sponsorship agreement had not been validly dissolved. The claim for repayment of the sponsorship money was rejected, and the sponsor was ordered to pay the costs of the proceedings.
The importance of a good sponsorship agreement
Under these specific circumstances, the judge deemed it insufficient to dissolve the sponsorship agreement, but this does not mean that this will always be the case. This will have to be assessed on a case-by-case basis. In any event, many problems could have been avoided if provisions had been made in the sponsorship agreement regarding the event that the competition is terminated prematurely. For example, it could have been agreed which compensatory measures would be taken in that case. Would you like to know more about this, or would you like to have a sound sponsorship agreement drafted? Then discuss it with one of our legal experts.
