Written by Richard Wee, Anwar Rosim and Samantha Guang
SIA ‘A’ v C, D, E
Case C-365/23 [Arce]
Brief Facts
In this case, a company (‘A’) specialising in professional development services for athletes had signed a 15-year contract with a 17-year-old minor (‘C’), who was not yet a professional basketball player at the time. The agreement required C to pay A 10% of his net income from basketball-related contracts, with a guaranteed minimum of EUR 1,500 per month plus Value-Added Tax.[1]
In 2020, A filed a lawsuit in Latvia seeking EUR1,663,777.99 (allegedly 10% of C’s sports income). However, both the lower court and the appellate court rejected the claim, finding that the contract violated national consumer protection laws. They determined that the clause obligating C to pay 10% of his income for the entire contract period was unfair.
A appealed to a higher court, which referred questions to the Court of Justice of the European Union (CJEU) regarding the application of EU consumer protection law, specifically Directive 93/13 (‘Directive’), to such contracts.[2]
Findings of the Court
The findings of the court (Fifth Chamber) dated 20 March 2025 is as below:[3]
Article 1(1) and Article 2(b) of Council Directive 93/13/EEC of 5 April 1993
A contract for career and development services in sports signed between a company working in sports development and a young, up-and-coming athlete who is still a minor and represented by their parents, falls under the rules on unfair terms in consumer contracts. This applies because, at the time the contract was signed, the athlete had not yet turned professional and was considered a consumer.
Article 4(2) and Article 8 of Directive 93/13
The gist of these two Articles is a contract clause requiring a young athlete to pay 10% of their income for 15 years in exchange for career and development services that fall under the rules on unfair contract terms. A national court can typically only assess whether this clause is unfair if the wording is not clear and understandable. However, the Directive does not prevent national laws from allowing courts to review the fairness of such terms, even if they are clearly and plainly written.[4]
Article 5 of Directive 93/13
Under Article 5 of the Directive, if a contract requires a sportsperson to pay 10% of their income over 15 years for career and development services but does not clearly provide all the necessary information to help them understand the financial impact of that commitment before signing, then the clause is not considered to be written in clear and understandable language under the Directive.[5]
Article 3(1) of Directive 93/13
The CJEU clarified that a clause obligating a young sportsperson to pay 10% of income over 15 years does not automatically constitute an unfair term under Article 3(1) of Directive 93/13. Specifically, the absence of a direct link between the cost of services and the value provided does not, per se, create a significant imbalance.
Instead, the national court must assess the clause in light of the following:
- applicable rules in national law absent an express agreement;
- fair and equitable market practices in the sport at the time of contracting; and
- the broader context and terms of the contract or any interrelated agreement.
This nuanced approach reinforces the Directive’s purpose: to safeguard consumers from substantive imbalance, not merely from unusual contract structures.[6]
Article 6(1) of Directive 93/13
If a term is found to be unfair, courts are prohibited from rewriting or reducing it to reflect actual costs incurred by the supplier. Article 6(1) mandates that such terms be deemed non-binding and severed from the contract.
Allowing courts to ‘partially salvage’ unfair terms would weaken the Directive’s deterrent effect, as suppliers might continue inserting potentially exploitative provisions with minimal consequence. This ruling emphasises strict non-enforcement as a form of consumer protection and market discipline.[7]
Directive 93/13, read in the light of Article 17(1) and Article 24(2) of the Charter of Fundamental Rights of the European Union
Importantly, the court held that the minor status of the sportsperson at the time of contract execution — along with the fact that the agreement was signed by the minor’s parents — is a key consideration in evaluating fairness under Directive 93/13.
Drawing upon:
- Article 17(1) (Right to property) and;
- Article 24(2) (Rights of the child) of the Charter of Fundamental Rights of the European Union.
The court emphasised that the best interests of the child must be a primary consideration. Even where the parents may have familiarity with the industry, the inherent vulnerability of a minor warrants enhanced protection. This principle serves to reinforce the unique consumer status of minors in long-term, high-stakes commercial contracts.[8]
Conclusion
The Directive applies because the contract was signed when the athlete was a minor and not yet a professional athlete. Consumer status is determined at the time of signing, meaning athletes remain protected even if they later turn professional. This case illustrates the importance of contract clarity and fairness, especially when young, aspiring athletes are involved. Legal practitioners should be vigilant when drafting such agreements, ensuring full transparency and consideration of the minor’s best interests. Ultimately, the judgment reinforces that contractual ambition must not come at the expense of fairness, especially when the future of a minor is at stake.
[1]https://curia.europa.eu/juris/document/document.jsf?text=&docid=296856&pageIndex=0&doclang=en&mode=req&dir=&occ=first&part=1&cid=15552496
[2] https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:31993L0013
[3]https://curia.europa.eu/juris/document/document.jsf?text=&docid=296856&pageIndex=0&doclang=en&mode=req&dir=&occ=first&part=1&cid=15552496
[4] https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:31993L0013
[5] https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:31993L0013
[6] https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:31993L0013
[7] https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:31993L0013