Players and clubs sometimes insert a provision in employment contracts with regards to potential relegations (or promotions) of the club in the future; the so-called, “relegation clause”. For example, in the event the club will be relegated in the future from a higher to a lower division, the employment contract will be terminated, either automatically or by any legal action by one of the parties.
Especially among clubs regularly operating in the lower regions of the league, the relegation clause is an effective tool to protect themselves from very high salary burdens as a result of relegation. The inclusion of a relegation clause in a player contract, however, can also be to the benefit of the player. By including a relegation clause in the contract, the player can protect his sports career by not being contractually obliged to play in a lower league. In fact, by playing in a lower division, employment opportunities and the...
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