Experts spot possible legal loophole in Memphis-Corinthians case | OneFootball

Osmar Stabile’s decision not to move forward with Memphis Depay’s contract renewal brought the forward’s time on the pitch at Corinthians to an end. Off the field, however, the situation could still lead to new developments and keep the club at odds with the player’s legal representatives.

Although no contract was signed and, therefore, there is no new formal agreement between the parties, experts in sports and contract law believe the way the talks were conducted could result in legal challenges against Corinthians.

Photo: Rodrigo Coca/Ag. Corinthians

One of the possibilities being considered by Memphis’s legal team is seeking full payment in court of the termination clause included in the draft contract that was never signed. The amount set was US$20 million, equivalent to R$103.26 million at the exchange rate mentioned in the report.

Ricardo Cury, a lawyer and professor at FAAP, believes some elements produced during the talks could be relevant in a potential dispute. Among them are the medical exams, the circulation of different versions of the contract, and communications made by email.

“The situation is very delicate. I don’t have all the elements to presume what is happening. We have some scenarios that have been published by you. Apparently, the negotiation was underway and some actions were carried out, such as exams, exchanges of draft contracts, and emails,” the lawyer said in an interview with ge.globo.

In the specialist’s view, however, all documentation would need to be analyzed before reaching a conclusion on any potential liability on the part of the club.

“We would need to examine all the elements and information more carefully. In theory, it could constitute improper conduct and possible liability for Corinthians. At the very least, there is a discussion of possible compensation for Memphis Depay. This debate will be brought before the courts, and it is not an inconsistent argument,” he continued.

Pedro Lopes, founding partner of PPLlaw and Chenus Holdings, also sees the possibility of a legal dispute. The lawyer explains that the scenario would depend on Memphis’s ability to demonstrate that the negotiations reached a point capable of creating a concrete expectation of renewal and that the breakdown ultimately caused losses to the player.

“(The club) can, provided that the athlete proves that the stage of the negotiations gave him a well-founded expectation that the contract would be renewed and, of course, that the decision not to conclude the renewal caused him losses. In this case, considering that the deal was never formalized, I believe the greatest likelihood of success would be before the Brazilian courts, on the grounds of pre-contractual civil liability,” the businessman commented.

One of the main points that could come under debate is the so-called good faith during negotiations. In law, the principle requires the parties to act with loyalty, transparency, cooperation, and respect for the trust created during negotiations, even before a contract is signed.

For Pedro Lopes, depending on the circumstances that led to the end of the talks, Corinthians’s conduct could be questioned from that standpoint.

“Depending on the factual context in which it occurred, the breakdown can be interpreted as bad faith. After all, although Western legal systems establish, as a rule, the precept that no one shall be obliged to do or refrain from doing anything except by virtue of law or contract, the parties must always act in good faith, including during the negotiation phases that precede the formalization of a contract,” he reiterated.

Despite this, the specialist makes an important distinction between possible compensation for pre-contractual liability and the collection of the termination clause provided for in the draft. According to Pedro Lopes, the demand for the US$20 million is not supported by FIFA rules precisely because the new contract was never formalized.

“The collection of a termination penalty from a contract that was not formally concluded is completely unfeasible. Both FIFA’s Regulations on the Status and Transfer of Players (RSTP) and Brazilian legislation require written form for a sports employment contract. Therefore, without a signed instrument, there is no employment contract and, for that reason, it is not possible to enforce any termination clause,” Lopes noted.

Ricardo Cury also drew attention to another aspect of the situation: the possibility of personal liability for executives in cases of management considered reckless. Brazil’s General Sports Law establishes mechanisms to hold administrators individually liable when they cause certain losses to sports entities during their terms. Among the consequences provided for is the possibility of reaching the personal assets of those responsible, depending on the circumstances of the case.

“It seems to me that Corinthians’s current management backed down because of a possible characterization of reckless management by president Osmar Stabile. If we examine the General Sports Law, from 2023, there is a specific provision on this from article 66 to article 69,” the professional pointed out.

In the lawyer’s view, concern over possible individual liability may have influenced the decision to halt negotiations with Memphis.

“Osmar’s general concern is not to be held liable for any losses caused to Corinthians. The president must have been warned about possible personal liability. In my opinion, the retreat may have been because of that. As far as I know, through the information published by the press, the negotiation was very well advanced,” Cury said.

The decision also comes at an extremely delicate time for Corinthians’s finances. The club faces an estimated debt of approximately R$2.7 billion, considered one of the biggest financial crises in its history. Memphis’s previous deal, signed during Augusto Melo’s administration, left an outstanding liability of approximately R$42 million with the forward.

According to people close to Corinthians heard by the report, the club currently does not have the resources needed to settle that obligation. If no agreement is reached, the tendency is for Memphis to seek collection of the debt, with interest, penalties, and monetary correction added. In that scenario, the debt could reach approximately R$77 million.

Ricardo Cury stresses that the progress of the talks alone would not legally require Corinthians to complete the renewal. The problem, according to him, lies in the liabilities the club has already accumulated and the possible developments of a dispute involving the forward.

“Corinthians is not legally obliged to renew just because the negotiation advanced, but it remains fully exposed because of the liabilities that already exist and the consequences of a possible claim before FIFA. Politically, the episode is even more worrying because a decision with enormous financial impact seems to have been crossed by internal pressures and disputes,” the lawyer said.

“When there is a lack of governance, transparent criteria, and solid institutions to support technical decisions, political conflict ends up turning into legal uncertainty, financial loss, and sporting risk for the club itself,” Ricardo Cury concluded.

This article was translated into English by Artificial Intelligence. You can read the original version in 🇧🇷 here.