Avoiding disputes in motorsport rider / driver contracts

It’s no secret that motorsport is expensive and the stakes are high. Add in adrenaline and the risk of injury – to person, property and reputation – and it’s a perfect climate for disputes. To limit the potential for escalation (and the resulting cost) it is essential for both teams and riders / drivers have appropriate contracts in place.

Contracts should be carefully considered at the outset of the relationship and we’ve set out below a list of the key issues to address when doing so.

Duration

How long is the relationship intended to last? Just the season? Does that include pre-season? What about other test and development sessions? Is the rider / driver required to attend any post-season de-briefs or development sessions?

Termination

How can the contract be terminated, and by whom? If termination provisions are invoked, how long is the notice period? How is notice to be served? Consider, for example, if notice can only be sent by first class post but an issue arises during a round when the rider / driver and team may be a significant distance from their address. Consider the length of time it would take for the team to find a replacement, or the rider / driver to find a new team. Does any kit need returning on termination? What about passes and identification badges? What happens to funds exchanged, either between the parties or from team or personal sponsors?

Remuneration and status of the rider / driver?

Is the rider / driver being paid, or are they paying the team? If the rider / driver is being paid, are they intended to be a contractor or employee of the team? How are monies to be exchanged and when? Will there be any bonuses awarded for podium positions? Who will be liable for any fines levied for inappropriate behaviour on track, or arising from a breach of technical rules?

Duties

What are each parties’ duties? Who is responsible for what?

Is the rider / driver required to participate in every session? What if they’re unwell? Is the rider / driver obliged to provide developmental feedback to the team? Are they prevented from deliberately causing damage to the vehicle? Is the rider / driver entitled to hold any other form of engagement or employment?

Is the team obliged to identify a co-driver, if relevant? Is it required to spend an unlimited sum of money on developing and improving the vehicle? Is the team prevented from causing deliberate risk of injury? Is the team obliged to provide hospitality or accommodation to the driver, their associates and sponsors?

Advertisement, PR, sponsorship and apparel

Who is responsible for PR, social media, interviews? Is the rider / driver obliged to attend any specific events or press conferences? Is either party restricted in respect of what it can say about the other, and to whom? Is there any message, branding or ‘theme’ which the parties are obliged to promote externally? Whose role is it to entertain sponsors? Is either party required to continually look for and pursue sponsorship opportunities? Is the rider / driver required to wear certain brands, and does this extend to safety gear? If so, who is responsible for the costs?

Breaches of contract and disputes

What happens if the contract is breached? Will different breaches be treated differently? Are any obligations more material than others, and therefore warrant more severe outcomes?

If a dispute arises under the contract, how will this be dealt with? Are the parties required to attempt to resolve their differences by negotiation? Should mediation be pursued before a party can bring a claim in a Court or Tribunal? Is there an appropriate third party or institution which can adjudicate in any dispute?

Conclusion

There is a lot to consider, but Irwin Mitchell is able to help – with both drafting and amending contracts as well as assisting with disputes should they arise. Katherine East and Thomas Barnard both specialise in Commercial Dispute Resolution, with particular expertise in motorsports.