Can a Minor Sign a Binding NIL Agreement in Texas?
Photo by Markus Spiske on Unsplash
UPDATE 11-5-2021:
17-year-old high school basketball player in North Carolina signs endorsement deal with Puma.
ORIGINAL POST:
Southlake, Texas quarterback Quinn Ewers opted to skip his senior year of high school to join the Ohio State Buckeyes football team. With the Texas Name Image Likeness (NIL) statute, the NCAA NIL Guidelines, and 24 other states with NIL laws, we anticipate a trend of high school students skipping their senior year of high school to maximize their NIL earnings as college student athletes.
Should Student Athletes Skip Senior Year?
Ewers could potentially earn $1 million in NIL deals in his college freshman year. Ewers accelerated his studies and completed his one remaining required high school class online in the summer of 2021, just in time for college eligibility.
Many other high school athletes are faced with decisions to skip senior year and take advantage of attractive college NIL deals. Many college freshmen start their first semester at age 17. No one can fault a teenager staring at life-altering financial incentives, especially in Texas, where the University Interscholastic League (UIL), the governing body for high school athletics in Texas, has drawn a bright line between amateur high school athletes and eligible college students.
The UIL released its NIL policy holding Texas state law prohibits agreements through which a student athlete would profit from name, image and likeness prior to their enrollment in an institution of higher education. Violation of the UIL rules would cause the student to be ineligible [to compete in high school athletics] in that instance. Could the UIL prohibition serve as an incentive for Texas student athletes to skip their senior year of high school?
In fact, the only state that allows high school student athletes to profit from their name, image, and likeness is California. California has this carve out because of the number of child actors in the state.
Parents and experienced NIL attorneys must work together to balance the financial and academic interests of these teenage athletes with the needs of high-quality college athletic programs and corporate sponsors.
NIL Contracts with Minors
Many of those college-bound 17-year-olds may find themselves sitting down at their family dining tables and staring at the first contracts of their lives. Children can sign contracts at any age. The Houston Bar Association points out the contract is not mutually enforceable, however.
Children do not have the capacity to understand contracts or their ramifications. During the term of the contract, the minor can void the entire contract or ratify the entire contract.
Suppose a 17-year-old student athlete signs a NIL agreement. The arrangement proceeds without incident through fall and winter but stipulates the minor student athlete is to make an appearance whose date conflicts with high school senior prom in spring.
The minor student athlete honors the contract right up to mere days before the spring prom. Then they could potentially void the contract, end the relationship, and attend prom without any legal repercussions. Keep in mind, if the minor was provided any property under the NIL agreement, the property in the athlete’s possession must be returned.
Most adults, colleges, and sponsors would find little benefit in engaging contractually with a minor, since the agreement rests on the whims of the teenager.
Emancipated Minors, Court Approved Contracts with Minors, and NIL Agreements
In some special situations a contract with minor can be mutually enforceable in Texas.
Seven conditions under which a minor’s contract can be enforceable are when:
A minor signs a military contract to enter the armed forces
A minor acts in a fiduciary capacity
A minor misrepresents her or his age so that the adult thinks the contract is between adults
A court approves a contract with the minor’s interest valued at less than $100,000
A minor ratifies the contract at age of majority
A court approves an arts and entertainment contract (child stars, teenage athletes)
A minor is emancipated
The first four circumstances are outside the scope of NIL law and the fifth condition applies if the minor’s contract extends past the minor’s age of majority (18) and the minor does nothing to void the contract.
Under the sixth circumstance, a NIL contract in Texas can only be confirmed by complying with Texas Statute Sec. 1356.051. This court action is predicated on a petition of the guardian of the minor’s estate and is done with the express purpose of protecting the best interests of the child.
The seventh circumstance, emancipation, is a challenge to attain but is legally feasible. To remove the “disabilities of minority” (to emancipate the minor), a minor may petition the court if the minor:
Is a resident of Texas
Is self-supporting
Manages her or his own financial affairs
Either 17 years old or 16 and living separate and apart from her or his parents, managing conservator, or guardian
The population of 16- or 17-year-olds who are athletically gifted and meet the qualifications to be emancipated is staggeringly small. Opportunities for binding NIL agreements with minors relying on emancipation of the minor will be extremely rare. The better route for the sponsor is securing court approval of the arts, entertainment, advertising, or sports contract under Texas law.
Contact me today at Bennett Law Office, PC, or feel free to telephone or text my office at (972) 244-3210. I look forward to protecting the rights of our college athletes, Texas schools and athletic conferences, and potential sponsors.
