Proactive Sports Management Ltd v Rooney & Ors (Rev 1)

An exclusive image-rights representation agreement may fall within the doctrine of restraint of trade even though it concerns only commercial exploitation and does not restrict the player’s footballing activities. The court must examine the substance of the arrangement, including its duration, exclusivity, bargaining circumstances and commercial terms.

An eight-year exclusive agreement imposed on a commercially inexperienced 17-year-old, without independent legal advice and without meaningful negotiation, was unreasonable and unenforceable. A contractual acknowledgement that independent advice had been taken could not exclude public policy. The agreement did not confer a right to post-termination commission. Restitution was nevertheless available for services freely accepted under the unenforceable agreement.

Proactive claimed commission, damages and declaratory relief against Stoneygate 48 Ltd under an eight-year Image Rights Representation Agreement concerning Wayne Rooney’s commercial and image rights. It also claimed remuneration from Speed 9849 Ltd for services provided in relation to Coleen Rooney’s commercial opportunities.

Stoneygate contended that its agreement with Proactive was void for common mistake and, alternatively, unenforceable as an unreasonable restraint of trade. The parties also disputed post-termination commission, contractual remedies, value added tax and individual invoices.

The central issues were whether the agreement was affected by mistake, whether the restraints required and received justification, whether commission continued after termination, and what restitutionary or contractual remedies were available.

1. Stoneygate agreement. The Image Rights Representation Agreement was not void for common mistake. The evidence showed that Proactive’s relevant officers knew, or must have known, that the earlier agreement covered both on-field and off-field representation. In any event, the written agreements had been signed, and any mistaken understanding of their terms was attributable to the parties’ own conduct. The narrow doctrine stated in The Great Peace did not apply (paras [600]–[619]).
2. The agreement was an agreement in restraint of trade. Its substance imposed an exclusive eight-year tie on the commercial exploitation of the player’s image rights, with significant restrictions on both Stoneygate and the player. The doctrine was not excluded because the restraint was partial or because the agreement involved a limited company (paras [642]–[654]).
3. Proactive failed to justify the restraint. The player was young and commercially inexperienced; the terms were effectively dictated by Proactive; there was no meaningful negotiation or independent legal advice; and an eight-year term at a flat 20 per cent commission was unusual and substantially onerous. Strategic planning, protection against competing agents, Proactive’s investment and the possibility of a commercial buy-out did not justify the duration (paras [714]–[731]).
4. Clause 24 could not prevent reliance on the public-policy doctrine. Nor could the agreement be affirmed at common law in the strict sense relied upon by Proactive. A contract unenforceable from the outset for restraint of trade is materially different from a valid contract capable of discharge by acceptance of repudiatory breach (paras [664]–[713]).
5. Clause 8 did not provide a unilateral right to terminate. It addressed the consequences of early breach and operated as a penal provision, subject to Proactive’s concession that it capped damages. The agreement did not confer a right to post-termination commission: remuneration was expressed to be consideration for the continuing performance of the Services, and clear wording would have been expected if commission were intended to continue after termination (paras [520]–[576]).
6. Because the agreement was unenforceable, Proactive could not recover contractual commission or damages under it. It was entitled instead to a restitutionary remedy for services freely accepted by Stoneygate. The amount required assessment by reference to the reasonable value of services actually provided, not automatically by the contractual 20 per cent rate (paras [731]–[762], [818]).
7. As to Speed, the parties’ conduct established an implied contract under which Proactive supplied services analogous to those provided for Stoneygate in return for 20 per cent commission. No wider term of exclusivity or fixed duration was established. Proactive could recover commission due before the breakdown of relations, amounting to £78,725.25, together with specified accountancy fees (paras [763]–[787], [820]–[821]).

First-instance decision. No appellate history is stated in the judgment.