Contract Law Question

[J.I.A.H.N]

This is a question for any lawyers or law students out there.

It appears that the NHL delibrately, put in a clause to penalize the clubs who " circumvented" the old collective agreement. With malice! Re: Having to keep a cap hit after the player retires until it expires.

My question is. Could the Canucks go to court to over turn the clause, on the grounds that it penalizes

and devalues an assest(LUONGO), even though the signing of the contract did not legally circumvent Canadian or US law or the old CBA?

My point is that because the loophole existed, then it was part of the old CBA, and was legal, therefore the NHL could not prevent the Canucks from signing Luongo to his contract.That is history and was legal. I understand that the NHL can close the loophole, but can they legally, penalize a team for using the Collective Agreement to it's fullest?

Can they penalize retroactively, like the NHL did. Ultimately, this benifits less talented or less rich teams, by forcing the Canucks to sell or give away a player(asset) at lower than market prices, which will ulimately benifit those teams that voted in favor of the new agreement.

Wouldn't the NHL president (Who's name shall not be spoken )and his office, be legally obligated to represent all teams equally?

And how would other teams react to this law suit?

[BedBeats™2.0]

The best resource is a CDC user named Wetcoaster. Message him and ask for him to respond to the thread.

[J.I.A.H.N]

The best resource is a CDC user named Wetcoaster. Message him and ask for him to respond to the thread.

[Ghostsof1915]

A contract is an agreement having a lawful object entered into voluntarily by two or more parties, each of whom intends to create one or more legal obligations between or among them. The elements of a contract are "offer" and "acceptance" by "competent persons" having legal capacity who exchange "consideration" to create "mutuality of obligation."

As per wikipedia

I'm sure the wording in the new CBA which was agreed too by the NHLPA and NHL Board of Governors approved the way of dealing with the former loophole. There used to be a loophole of people gifting cars from Alberta to avoid provincial tax. Now Consumer Taxation changed the rules to close that loophole. This wasn't just targeting the Luongo deal, it was also for how New Jersey with the Kovalchuk deal.

[MJDDawg]

Makes you wonder why owners didn't speak up and say anything during the negotiations doesn't it?

You have supposed power brokers on the board like Snider and Leonsis as well as GM's like Lamoriello that all have players on their teams with these long term back diving contracts. I refuse to believe that if any of these guys stood up and told Bettman to take a flying leap that the penalties would have been approved. You have to wonder why they would go along with the new penalties and hamstring their own teams.

The penalties smack of behaviour we'd see from a dictator or gang leader where hanging bodies from street lamps for everyone to see act as a warning to tow the party line.

[Dogbyte]

Because the NHLPA signed off on it and the owners and teams are bound by the agreement there is nothing that can be done. I'm sure when the details came out MG and Aquilini were not happy as I'm sure not every team got to rebuttal based on how the agreement would personally affect teams.

You are right this totally screwed us in this situation. From the Canucks side I'm sure their attitude was that they'd be happy to have Roberto playing right up until he was 42 if he kept playing. However, if he didn't they shouldn't be penalized. But to be honest it was really cap circumvention. It just sucks that we employed a team to maximize that and then it was pulled out from under us.

[firestorm238]

It's more complicated than that. The players and the teams have agreed to abide by the terms of the CBA between the NHL and the NHLPA. Individual owners and players (like Aquillini and Luongo) have generally given up their individual rights to dispute on contractual issues, by agreeing to be bound by the terms of the new CBA.

To simplify it: all the owners (including Aquillini) agreed to be represented by Gary Bettman, and all the NHLPA members agreed to be represented by Don Fehr. Gary and Don came up with an agreement. All of the owners, and a majority of the players signed off on that agreement (including the provisions the OP is talking about). As a result, the CBA represents an acceptance of the more onerous terms on individual player contracts. By accepting the new CBA Aquillini basically forgoes his rights to dispute its fairness - if he had objections he should have raised them earlier. Likewise, by joining a union (the NHLPA) Luongo generally forgoes his rights to negotiate a player contract outside the CBA.

[J.I.A.H.N]

A contract is an agreement having a lawful object entered into voluntarily by two or more parties, each of whom intends to create one or more legal obligations between or among them. The elements of a contract are "offer" and "acceptance" by "competent persons" having legal capacity who exchange "consideration" to create "mutuality of obligation."

As per wikipedia

I'm sure the wording in the new CBA which was agreed too by the NHLPA and NHL Board of Governors approved the way of dealing with the former loophole. There used to be a loophole of people gifting cars from Alberta to avoid provincial tax. Now Consumer Taxation changed the rules to close that loophole. This wasn't just targeting the Luongo deal, it was also for how New Jersey with the Kovalchuk deal.

[J.I.A.H.N]

It's more complicated than that. The players and the teams have agreed to abide by the terms of the CBA between the NHL and the NHLPA. Individual owners and players (like Aquillini and Luongo) have generally given up their individual rights to dispute on contractual issues, by agreeing to be bound by the terms of the new CBA.

To simplify it: all the owners (including Aquillini) agreed to be represented by Gary Bettman, and all the NHLPA members agreed to be represented by Don Fehr. Gary and Don came up with an agreement. All of the owners, and a majority of the players signed off on that agreement (including the provisions the OP is talking about). As a result, the CBA represents an acceptance of the more onerous terms on individual player contracts. By accepting the new CBA Aquillini basically forgoes his rights to dispute its fairness - if he had objections he should have raised them earlier. Likewise, by joining a union (the NHLPA) Luongo generally forgoes his rights to negotiate a player contract outside the CBA.

[SID.IS.SID.ME.IS.ME]

Even beyond the issues of representation (in collective bargaining) and membership (in the NHL Board of Governors), the Canucks themselves (ownership) ultimately chose to vote to ratify the agreement as written (it was a unanimous vote). If they had at least chosen to vote against this proposed version of the CBA (or at least abstain, if that was possible in the NHLBOG's voting process), they might have some semblance of moral ground to stand on in opposing the 2013 CBA's punitive actions.

There's good reason why the new CBA's "Cap Advantage Recapture" clause is referred to by CapGeek (and others) as the "Roberto Luongo Rule" (http://www.capgeek.com/new-cba/). While there are other teams with contracts that are effected by this rule, only the Canucks were in the active process of trying to move a contract and had the rules changed on them in the middle of their negotiations.

If people haven't read the specifics (see point 9 of of Economic and System Issues, pages 2-3): http://www.nhl.com/n...2,_2013 (1).pdf

My guess is that, even given the fact that the NHL Board of Governors almost always votes unanimously and takes great effort to publicly maintain the image of a strongly unified front (even though there have been many disagreements in private), in this case, the Aquilinis realized that the new CBA, as written (even with the punitive "Luongo Rule"), would still net them more than enough of an increase in profit share to cover the worst case scenario (ie: a compliance buyout of Luongo's contract).

I'm sure the Canucks expressed their displeasure privately (regarding "Cap Advantage Recapture") but in public, the Canucks were 100% behind the new CBA:

"It's a great deal for hockey," said Vancouver Canucks GM Mike Gillis. "It's great that we're back playing."

[J.I.A.H.N]

I think that pretty well covers it...........good answers, all sound logic! Except maybe mine, lol. These questions, are why I ask questions/make statements and through out idea's. When you get answers like these, it makes you think, and reshape your idea's. The reason for discussion and debate........the exchange of idea's! What a novel concept!

I don't always yeild to other posters opinions, but in this case, I was looking for answers I did not have. And this is why I come to CDC and post......and read!

Thanks all!

[thema]

But to be honest it was really cap circumvention.

[Provost]

Unfortunately when you enter into a union or association and collectively bargain... the "collective" is allowed to over-ride individual contracts. This is how in the last CBA they were able to roll back every player salary even if individual players didn't agree to it.

This penalty clause was pretty well known to have been introduced and championed by Brian Burke. He even fashioned it in a way that if he traded for Luongo, the Canucks would be on the hook for a big chunk of the penalty as the team who originally signed the deal. It is totally B.S. how a league worth billions of dollars is run by a few guys in an old boys club... but that isn't anything new to the NHL.

I think it is looking more and more that we will have to buy out Luongo to not get hit with the cap problems down the road. We could waive him and get him taken off our hands, but if he then retires early we close valuable cap space in the coming years. Really tough call by ownership though, maybe we will be in a rebuild at that point and not need all the cap space and he will have wasted $40 million in buyout.

[Baggins]

Makes you wonder why owners didn't speak up and say anything during the negotiations doesn't it?

You have supposed power brokers on the board like Snider and Leonsis as well as GM's like Lamoriello that all have players on their teams with these long term back diving contracts. I refuse to believe that if any of these guys stood up and told Bettman to take a flying leap that the penalties would have been approved. You have to wonder why they would go along with the new penalties and hamstring their own teams.

The penalties smack of behaviour we'd see from a dictator or gang leader where hanging bodies from street lamps for everyone to see act as a warning to tow the party line.

[Baggins]

Unfortunately when you enter into a union or association and collectively bargain... the "collective" is allowed to over-ride individual contracts. This is how in the last CBA they were able to roll back every player salary even if individual players didn't agree to it.

This penalty clause was pretty well known to have been introduced and championed by Brian Burke. He even fashioned it in a way that if he traded for Luongo, the Canucks would be on the hook for a big chunk of the penalty as the team who originally signed the deal. It is totally B.S. how a league worth billions of dollars is run by a few guys in an old boys club... but that isn't anything new to the NHL.

I think it is looking more and more that we will have to buy out Luongo to not get hit with the cap problems down the road. We could waive him and get him taken off our hands, but if he then retires early we close valuable cap space in the coming years. Really tough call by ownership though, maybe we will be in a rebuild at that point and not need all the cap space and he will have wasted $40 million in buyout.

[MJDDawg]

It is a majority rules environment. You don't think the GM's of the bottom half of the league wanted the "have got" GM's penalized for backing up their money trucks to circumvent the cap to sign top end players? it wouldn't matter if those money GM's were against the clause. They were simply outvoted by the have not GM's.

Bettman doesn't simply decide what will be what. He's the voice of the owners and does what the majority rule wants. if 16 of the 30 owners want a peanalty on excessive contracts Bettmans job is to put it in place. Bettman isn't the leagues dictator, he's the owners employee. If he wasn't doing what the major rule wanted he wouldn't have been given a raise with an extension.

[Islandboss]

Ya it's a crock.You cannot be penalized charged ect when A new law comes into place if you violated it before it was put in place. The situation could be appealed.Aoll contracts should be ruled by cba they were signed under thats how regular law works.This a sham.Not Lu or gillis are responsible for not being able to get a trade.It is head office weasel getting another noose around the canucks so it's harder for them to succeed.

[J.I.A.H.N]

Collusion

Definition

In the study of economics and market competition, collusion takes place within an industry when rival companies cooperate for their mutual benefit. Collusion most often takes place within the market structure of oligopoly, where the decision of a few firms to collude can significantly impact the market as a whole. Cartels are a special case of explicit collusion. Collusion which is not overt, on the other hand, is known as tacit collusion.

Variations

According to neoclassical price-determination theory and game theory, the independence of suppliers forces prices to their minimum, increasing efficiency and decreasing the price determining ability of each individual firm. However, if firms collude to all increase prices, loss of sales is minimized, as consumers lack alternative choices at lower prices. This benefits the colluding firms at the cost of efficiency to society.

One variation of this traditional theory is the theory of kinked demand. Firms face a kinked demand curve if, when one firm decreases its price, other firms will follow suit in order to maintain sales, and when one firm increases its price, its rivals are unlikely to follow, as they would lose the sales' gains that they would otherwise get by holding prices at the previous level. Kinked demand potentially fosters supra-competitive prices because any one firm would receive a reduced benefit from cutting price, as opposed to the benefits accruing under neoclassical theory and certain game theoretic models such as Bertrand competition.

Collusion is illegal and I am not naive enough to think you could prove it, in this case. But I do know that contract law does not supercede Canadian and US civil law.

Hey, I was only dreaming, ain't going to happen, but you know it happened!

[The Colt 45s]

I am a student of collective bargaining. Even RL's contract was signed under the terms of the previous cba, the only cba that matters now is the new one. The NHLPA and NHL agreed to these new terms, and each party voted and adopted the agreement.

[J.I.A.H.N]

I am a student of collective bargaining. Even RL's contract was signed under the terms of the previous cba, the only cba that matters now is the new one. The NHLPA and NHL agreed to these new terms, and each party voted and adopted the agreement.