A Strike Below The Belt: Unconscionable Contract

Terms Offer Fighters No Chance to Fight Back.

A Contract Law Analysis of Boxing Management Agreements

"I never knew what I was signing," said [Tim] Witherspoon." He wouldn't let me take my
contracts to lawyers, wouldn't even let me read them myself. If I argued, [Don] King
would threaten to cancel the fight or have me suspended. So, mostly I went along.1
I. INTRODUCTION
On July 20, 1986 American Heavyweight champion Tim Witherspoon defeated British
challenger Frank Bruno by knockout in the 11th round of a twelve round slugfest. 2 The bout
generated approximately $3.7 million dollars in revenue.3 Although Frank Bruno was defeated in
the bout he earned approximately $1.1 million for the fight. 4 Alarmingly, Witherspoon, the
heavyweight champion of the world and winner of the bout received only $98,000.5 Adding insult
to injury, Carl King, Witherspoons boxing manager received $250,000 for his services related to
the bout.6
Four years prior to this bout, Carl King, the stepson of the infamous Don King, acquired
the exclusive right to manage Witherspoons career when Mark Stewart, Witherspoons former
manager, assigned the management agreement to Don King.7 Subsequently, Don King coerced
Witherspoon into signing a series of contracts.8 First, Witherspoon signed a contract that made
Don King his exclusive promoter.9 Second, Witherspoon signed a contract that made Carl King
his exclusive boxing manager, which entitled Carl King to one-third of all of Witherspoons boxing

Glen Macnow, Don King's Tight Grip on Boxing Despite Lawsuits, Investigations And A Trail of Angry Boxers, He
Remains The Sport's Indisputable Kingpin, PHILLY.COM (June 26 1988) http://articles.philly.com/1988-0626/sports/26268986_1_rival-promoter-cedric-kushner-alfonzo-ratliff-promotional-ties.
2
Tim Witherspoon and Frank Bruno (Box Rec), BOXREC.COM
http://boxrec.com/media/index.php/Tim_Witherspoon_vs._Frank_Bruno (last visited March 16, 2015).
3
Matt Hamilton, How Don King Ripped Off Tim Witherspoon, YOUTUBE.COM
https://www.youtube.com/watch?v=QsEBwn_2XSk (last visited March 16, 2015).
4
Tim Witherspoon and Frank Bruno, supra note 2.
5
Macnow, supra note 1.
6
Hamilton, supra note 3.
7
Macnow, supra note 1.
8
JACK NEWFIELD, ONLY IN AMERICA: THE LIFE AND CRIMES OF DON KING 216-17 (1995) (detailing how King
allegedly forced Tim Witherspoon into coercive contracts).
9
Id.

earnings.10 However, this contract was not enforced and was only created for show to comply
with a state boxing commission rule which capped management fees at 33%. 11 In reality,
Witherspoon was forced to sign a third contract, which entitled Carl King to 50% of all money
earned by Witherspoon.12 The final contract was a blank document and was created so that Don
King could fill in the blanks, which meant that Don King could enter into an agreement with an
opponent on Witherspoons behalf at any moment. 13 The series of contracts that Witherspoon
entered into with Don King and Carl King would ultimately lead to years of distraction, frustration,
and litigation for Witherspoon.14
Today, boxing remains the only major sport in the United States without a strong,
centralized regulatory body to enforce uniform rules and practices. 15 Although the faces of
menacing figures like Don King have changed, the practice of coercing boxers into unfavorable
contracts is ubiquitous.16 Why do boxers agree to these coercive contracts, as former heavyweight
champion James Bonecrusher Smith explained, [i]f I didn't go with them, it was a good
possibility I never would have gotten a title shot.17 The reality is that boxers have proven willing
to overlook unfavorable contract terms for a chance to become a world champion.18 Moreover,
many boxers come from impoverished backgrounds and do not have the financial wherewithal to
retain independent legal counsel to review and negotiate the terms of a contract.19 Simply put, this

10

Id.
Id.
12
Id.
13
NEWFIELD, supra note 8, at 217.
14
Hamilton, supra note 3.
15
153 Cong. Rec. 155 (2007).
16
Lance Pugmire, Boxing Lawsuit Aimed at Powerful Manager Al Haymon, LATIMES.COM (April 30, 2014)
http://www.latimes.com/sports/sportsnow/la-sp-sn-boxing-main-events-lawsuit-haymon-showtime-20140430story.html.
17
Macnow, supra note 1.
18
Brad Ehrlichman, In This Corner: An Analysis of Federal Boxing Legislation, 34 COLUM. J.L. & ARTS 421 (2011).
19
Id.
11

creates a coercive situation as managers are only obligated to provide a fighter with minimal
services in exchange for a substantial portion of a fighters earnings. The standard boxing
management agreement is structured so that when a fighter signs with a manager, he is essentially
trapped in that agreement for the entire duration of his boxing career. Conversely, the standard
boxing management agreement allows a manager to move freely in the marketplace signing and
releasing boxers who do not prove profitable.
This comment will provide an in-depth contract law analysis of a standard boxing
management agreement. First, it will define the role of the boxing manager in a young fighters
career. Second, it will identify several problematic provisions contained in a standard boxing
management agreement. Third, it will provide a thorough analysis of several objectionable
provisions juxtaposed against the doctrine unconscionability. This will include a comprehensive
look at the history of case law that has considered the concept. Next, the paper will assess whether
a court would likely render a real world boxing management agreement unconscionable. Then, it
will briefly discuss how the Muhammad Ali Boxing Reform Act and State Athletic Commissions
have failed to protect boxers from coercive management agreements. Finally, this paper will
provide recommendations on how to correct this coercive and likely unconscionable practice.
II. The Boxing Manager
The first step in this analysis is to define the role of the boxing manager in a young fighters
career.
Typically a professional boxer will hire a manager to ensure that he is protected in all
aspects of his career.20 This includes, but is not limited to, the boxers relationship with promoters,
sponsors, and other third parties. 21 The primary role of the boxing manager is to negotiate a

20
21

Jeffrey S. Fried, Sweet Science, Legally Speaking (Professional Boxing), 14 J. LEGAL ASPECTS SPORT 75 (2004).
Id. at 91.

favorable boxing promotional deal for the fighter.22 Additionally, the boxing manager is generally
responsible for advising the fighter in connection with the fighters boxing career as well as
supervising the training activities of the fighter.23 The boxing manager owes a fiduciary duty to
the fighter and is expected to work to serve the best interests of the fighter.24 Many states have
outlined jurisdictional requirements for length of the term and maximum percentage that a manager
can receive.25 For example, in Nevada, the Nevada State Athletic Commission will not enforce a
contract that entitles a manager to more than one-third of a fighters earnings and exceeds a fouryear term.26
III. The Situation: A look at Standard Provisions in Boxing Management
Agreements
A boxing manager usually will not represent a fighter without an express contract in
place.27 This section will identify several problematic provisions contained in a standard boxing
management agreement.
One provision that is often found in a standard boxing management agreement is known
as the champion clause. It provides:
(e) If, during the Term Fighter (i) competes in a bout for a World Championship
Title sanctioned by either the WBC, WBA, IBF, IBO or WBO, or (ii) becomes one
of the ten (10) highest rated contenders for a championship sanctioned by either the
WBC, WBA, IBF, IBO or WBO, then subject to Section 4(f) below, the Term shall
automatically be extended for an additional two (2) year period. If, during the
Term, Fighter enters into a multi-fight agreement with a television network, online
distribution platform or media outlet, then, subject to Section 4(f) below, the Term
shall automatically be extended for an additional two (2) year period or for a period
sufficient to make the Term coterminous with the term of the agreement with the
television network or media outlet, as applicable, whichever is longer.28
22

Id.
Id.
24
Id.
25
Fried, supra note 20, at 92.
26
Id.
27
Hamilton, supra note 3.
28
See. Management Agreement (on file with author).
23

The champion clause is an option that can be exercised solely by the manager to extend
the contract beyond its original term in the event that any of the aforementioned events occur. The
rationale behind the clause is that if a boxing manager has effectively guided a professional boxers
career to the championship level then he or she should reap the benefits of such wisdom and
guidance.29 However, one must consider the circumstances that surround the signing of the initial
contract, as well as the potential harms to the boxer, in order to fully recognize its unduly harsh
nature.
The contract between a manager and boxer is typically signed early in a boxers career.30
This means that the fighter likely has very little bargaining power and does not have the resources
or knowledge to negotiate a fair deal. The fighter is focused on securing his first fight and cannot
predict when and how this provision will potentially impact his career. Second, the provision
contains a host of automatic renewals that extend the contract beyond a typical four-year maximum
term.31 This provision effectively eliminates the potential bargaining power of a young fighter who
rises to championship caliber. For example, a championship level fighter is able negotiate to
eliminate unfavorable terms in an agreement such as a one-third commission fee.32 Therefore, such
lengthy and automatic extensions prove costly to a fighter who reaches the championship level
and do not serve the best interests of fighters because it is likely that a fighter would be able to
receive a more favorable agreement without this clause.
When asked about the prevalence of coercive contracts in boxing Senator John McCain
once said that boxers are forced "into signing long-term contracts that represent nothing more than

29

Hamilton, supra note 3.

Ehrlichman, supra note 18, at 423.
31
Management Agreement, supra note 27, at 3.
32
Id. at 2.
30

a sophisticated version of indentured servitude."33 The average professional boxer will fight for a
total of five years.34 This means that professional boxers have an extremely limited amount of time
to reach their professional and financial goals in the sport. Therefore, the competent boxing
manager is vital to the professional boxer as the manager is responsible for guiding and supervising
the boxers career.35 Unfortunately, the weak regulatory climate in boxing has enabled managers
to offer unduly harsh one-sided agreements.36 These agreements are take it or leave it in nature
and allow managers to acquire the exclusive right to manage a fighters career in exchange for
very minimal obligations.37 Moreover, once a fighter signs with a manager it is extremely difficult,
if not impossible to break free from the grip of a powerful manager without derailing ones career.
Next, the termination provision is troublesome for a young fighter who enters into
an express management agreement without a clear idea of its implications. The termination
provision grants the manager the right to release the fighter from the agreement for a
number of reasons. It provides:
This Agreement may be terminated under one of the following conditions:
(a) If Fighter participates in any bout during the Term of this Agreement in which
he is not declared the winner, Manager shall have the sole discretion to terminate
this Agreement by giving Fighter forty five (45) days written notice from the date
of the bout giving rise to such option to terminate. (b) The Term expires, and no
renewal agreement has been reached.(c)This Agreement shall terminate if one of
the parties under this Agreement fails to perform its duties and obligations or
breaches the terms as provided for herein, in which case the non-breaching party
shall provide the breaching party with thirty (30) days notice of its intention to
terminate the Agreement and such party alleged to be in breach shall have thirty
(30) days in which to cure such alleged breach or this Agreement shall terminate.
(d )If Fighter commits, is indicted for, or a complaint is filed alleging a criminal act
33

John S. Nash, Managers Express Concerns Over Bellator's Sticky Contracts, BLOODYELBOW.COM (May 20, 2014)
http://www.bloodyelbow.com/2014/5/20/5715082/bellator-contract-mma-ali-act-business-fighters-managers-eddiealvarez-askren-lombard.
34
Paul McCrory et. al, The Risk of Chronic Traumatic Brain Injury in Professional Boxing: Change in Exposure
Variables over The Past Century, 39 BR J SPORTS MED 661-664 (2005).
35
Bill Cayton, Views Of Sport; Good Boxing Manager Are Worth The Price NYTIMES.COM (June 19, 1988).
http://www.nytimes.com/1988/06/19/sports/views-of-sport-good-boxing-managers-are-worth-the-price.html
36
Macnow, supra note 1.
37
See. John Doe Management Agreement (on file with author).

or offense under any federal, state or local law, then Manager may, at his sole
discretion, in addition to any other rights he may have at law, terminate this
Agreement without further obligation. If Fighter commits any act that brings
disrepute upon Manager or damage Managers reputation in any way, even by
association with Fighter, this Agreement shall be terminable at Managers
discretion. (e) Fighters license to participate in professional boxing matches is
suspended or revoked by pursuant to the rules and regulations of any state athletic
commission or other official authority.38
The provision outlines a number of circumstances in which a fighter can be
terminated. On its face, the termination clause seems reasonable. For example, pursuant to
subsection (d) if a criminal complaint is filed against the fighter then he may be released at
the managers discretion. It makes sense that a manager would not want to work with a
boxer facing criminal penalties.
However, subsection (a) which allows for a manager to release a fighter when he is
not declared the winner of a bout is troublesome for at least two reasons. First, the fighter
relies on the managers advice and supervision to prepare for fights. To allow a manager
to release a fighter when they need them most (after a loss) and after they have relied on
their guidance appears to be harsh. Second, the termination clause does not provide a
fighter with the ability to terminate the contract. In fact, the standard agreement expressly
states that a manager only promises a good faith effort in representation. 39 Therefore, if
a fighter is unhappy with his managers services, as long as the manager can show a good
faith effort, the fighter is trapped and cannot terminate the manager without breaching the
contract. Essentially, the termination provision allows the manager to release boxing
prospects that do not prove profitable. On the other hand, fighters are not granted the
express contractual right to rid themselves of bad management. In fact, if the fighter

38
39

Id.
Management Agreement, supra note 27, at 4.

chooses to not honor the agreement and attempts to leave, the manager can seek injunctive
relief, which could effectively derail a fighters career.40
A fighter with no express right to terminate a management agreement will be in
breach of contract if he decides to seek new representation during the term of the
agreement. When this situation occurs, a fighter triggers the injunctive relief provision. It
reads:
Fighter represents, warrants, covenants and agrees that Managers right to
exclusively represent Fighter and the rights granted to Manager hereunder are
unique and extraordinary rights, and it is hereby understood and agreed that
monetary damages may be an inadequate remedy in the event of a breach of this
Agreement, and that any breach will cause Manager irreparable harm and damage.
Accordingly, the parties agree that Manager shall be entitled to injunctive and other
equitable relief and to attorneys fees and costs, without waiving any additional
rights or remedies available at law or in equity or by statute.41
This provision effectively prevents a fighter from terminating a manager without serious
legal consequences. Among other things, the provision entitles the manager to a negative
injunction, which would prevent the fighter from retaining the services of another manager and
could work to prevent the fighter from continuing his career.42 As previously mentioned, the threat
of litigation negatively impacts a fighters already brief career. 43
The next provision worth mentioning is the standard commission provision. Unlike athletes
in other professional sports leagues, such as the NBA or NFL, professional boxers have not
successfully unionized. 44 There is no collectively bargained for agreement and there are no
uniform contract terms.45 Whereas NFL or NBA agents are capped at relatively low commission

40

Macnow, supra note 1.

Management Agreement, supra note 27, at 6.
42
Madison Square Garden Boxing, Inc. v. Earnie Shavers, 434 F. Supp 449 (S.D.N.Y.1977) (holding that a
heavyweight boxer who agreed to fight for the championship for a guaranteed purse of $200,000 would be enjoined
from participating in any other boxing match for the duration of the contract period).
43
Hamilton, supra note 3.
44
Ehrlichman, supra note 18, at 449.
45
Id.
41

rates (around three percent)46 currently, most State Athletic Commissions allow a boxing manager
to command up to one-third of a boxers earnings.47 A standard commission provision reads:

(a) In consideration for the services rendered by Manager hereunder, you shall pay
a commission of Thirty-Three Percent (33%) (Managers Commission) to
Manager of all sums of money and other remuneration in any form whatsoever paid
or credited to Fighter for his participation in professional boxing contests or
exhibitions, earned under any promotional agreement, or through any promotional
company, endorsements, sponsorship and personal appearances and any other
compensation generated by Fighter through his status as a professional boxer and
the exploitation of his name, image and likeness. All monies earned by you during
Term but not paid to or received by you until after Term shall be included in income
earned by Fighter pursuant to the terms of this Agreement. If Fighter forms his
own promotional company and Manager assists with such endeavor the parties will
come to a separate agreement as to Managers participation in the overall
promotional venture and the share of revenues therefrom.
(b)All compensation due Fighter shall be paid to and collected by Manager. From
such proceeds, Manager shall be immediately paid Managers Commission and is
hereby authorized to pay such Commission. Manager shall immediately disburse
the balance of such compensation pursuant to the specific instructions of Fighter.
Where Fighter is paid directly, Fighter shall direct his promoter or source of such
revenue, as applicable, to pay Managers Commission directly to Manager and shall
execute any documents necessary to ensure such direct payment. Further Manager
shall be reimbursed for all reasonable and documented expenses incurred by
Manager on behalf of Fighter as provided for in Section 7 herein. Fighter
acknowledges and agrees that Fighter shall responsible for the payment of any taxes
owed by Fighter to the United States government or any other governmental taxing
authority from the revenues generated by Fighter and collected by Manager on
Fighters behalf.
(c)In the event that Fighter conducts business or forms a corporation during the
Term of this Agreement for the purpose of creating a promotional company to
furnish Fighters services, Manager shall have the irrevocable option, exercisable
within ninety (90) days after the date it receives written notice of such event, to
enter into a management contract with such business or corporation identical in all
respects to this Agreement (except as to the parties thereto and the commencement
date of the term of such contract) subject to the following (i) if Manager exercises
such option within such ninety (90) day period, then the gross earnings of such
business or corporation derived in whole or in part from Fighters services, prior to
the deduction of any corporate income or other taxes and of any corporate costs or
Marie Gentile, The Average Sports Agents Commission, CHRON.COM http://work.chron.com/average-sportsagents-commission-21083.html (last visited March 16, 2015).
47
Fried, supra note 20, at 92.
46

10

expenses or other deductions, shall be included as part of gross income; provided,

that the subsequent distribution(s) of such monies to Fighter (as salary, dividends
or otherwise) shall not be commissionable by Manager hereunder and said
distribution(s) shall be excluded from gross income for the purpose of calculating
the compensation due to Manager hereunder; and (ii) in the event that Manager fails
to exercise such option within such ninety (90) day period, then the gross earnings
of such business or corporation derived in whole or in part from Fighters services,
prior to deduction of any corporate income or other taxes and any other corporate
costs or expenses or deductions shall be excluded from Fighters gross income, and
such salary, dividends, or other distributions of profits and other financial benefits
as may be paid to Fighter by such business or corporation shall be included as part
of Fighters gross income for purposes of determining the Managers
Commission.48
The aforementioned provisions are commonly found in the standard boxing management
agreement and work together to effectively trap a young fighter for the duration of his career.49
First, the champion clause contains a host of automatic renewals and eliminates a young fighters
opportunity to re-negotiate the material terms of the agreement. Second, the termination provision
allows the boxing manager to retain fighters that prove profitable while releasing fighters that do
not. Next, the injunction provision prevents a fighter from terminating a manager without serious
legal consequences. Lastly, the commission provision grants the manager the right to receive
nearly 33% of a fighters earnings. Taken together, the provisions in the standard boxing
management agreement are unduly harsh and do not serve the best interests of a fighter.
Imagine that you are a professional boxer and that you will earn $1,000,000 in your next
bout. Should a manager be able to walk away with approximately $333,000 from that purse? The
next part of this comment will discuss the doctrine of unconscionability as applied to the standard
boxing management agreement.
IV. Unanimous Decision: The Law of Contracts and the Boxing Management
Agreement as an Unconscionable Contract of Adhesion.

48
49

Management Agreement, supra note 27, at 2.

Id. at 1.

11

Courts generally did not strike down contracts down as unconscionable until the enactment
of the Uniform Commercial Code in 1952.50 It provides:
[i]f the court as a matter of law finds the contract or any terms of the contract to
have been unconscionable at the time it was made, the court may refuse to enforce
the contract, or it may enforce the remainder of the contract without the
unconscionable term, or it may so limit the application of any unconscionable term
as to avoid any unconscionable result.51
Although U.C.C. section 2-302 only applies to the sale of goods, the Restatement (Second)
of Contracts Section 208 was modeled after this provision and has expanded the applicability of
the unconscionability doctrine to contracts generally.52
Courts will typically not act to protect parties from their own lapses in judgment in deciding
to enter a contractual relationship.53 However, the doctrine of unconscionability is one exception
that a court will consider when it determines that there are unusual circumstances beyond the
control of the complainant. 54
1. Procedural and Substantive Unconscionability
Many courts agree that in order to assert that a contract is unconscionable, a party must
show that the contract was both procedurally and substantively unconscionable when it was
formed.55 Perhaps the leading case is Williams v. Walker-Thomas Furniture Co., which outlines
the test that a court will consider.56 In Williams, the court held that a financing contract for the
purchase of a furniture set was commercially unreasonable, and therefore, substantively
unconscionable, because its complex payment structure prevented the consumer from paying down

50

Kendall K. Johnson, Enforceable Fair and Square: The Right of Publicity, Unconscionability, and NCAA StudentAthlete Contracts, 19 SPORTS LAW. J. 1, 25 (2012).
51
U.C.C. 2-302.
52
RESTATEMENT (SECOND OF CONTRACTS) 208 cmt. a (1981).
53
Paul Bennett Marrow, Contractual Unconscionability: Identifying and Understanding Its Potential Elements,
COLUMBIA.EDU (Feb. 2000), available at http://www.columbia.edu/~yc2271/files/teaching/unconsc.pdf.
54
Id.
55
8 WILLISTON ON CONTRACTS 18:10 (4th ed.)
56
Williams v. Walker-Thomas Furniture Co., 350 F.2d 445 (C.A. D.C. 1965).

12

her balance. 57 Moreover, the court noted, unconscionability has generally been recognized to
include an absence of meaningful choice on the part of one of the parties together with contract
terms which are unreasonably favorable to the other party.58
The Supreme Court of Nevada will find a clause to be procedurally unconscionable when
a party lacks a meaningful opportunity to assent to the terms of the agreement.59 This may occur
due to unequal bargaining power or because the effects of a clause are unclear at the time of
formation.60 In D.R. Horton, Inc. v. Green, homebuyers brought suit alleging that a mandatory
arbitration provision included in a purchase agreement was unenforceable because the clause was
unconscionable.61 The district court denied the defendants request to compel arbitration because
the mandatory arbitration clause was found to be adhesive and unconscionable. 62 The court
concluded that the provision was unconscionable because it waived the right to a jury trial without
even mentioning the plaintiffs right to a jury trial.63 Moreover, it failed to inform homeowners
of the costs associated with arbitration and the substantial difference between arbitration fees and
filing fees for suits under Chapter 40.64 On appeal, the Supreme Court of Nevada affirmed the
district courts finding of procedural unconscionability on the grounds that the clause "failed to
adequately advise an average person that important rights were being waived by agreeing to
arbitrate any disputes under the contract."65

57

Id. at 445.
Id.
59
D.R. Horton, Inc. v. Green, 96 P. 3d 1159 (2004).
60
Id. at 1159.
61
Id.
62
Id. at 1162
63
D.R. Horton, 96 P. 3d at 1159.
64
Id. at 1162.
65
Id.
58

13

Similarly, the Supreme Court of Kentucky will find procedural unconscionability when
there is an unfair surprise, at the time of contract formation.66 The court in Schnuerle v. Insight
Commcncs Co., noted that an unfair surprise will occur when there is a use of fine print and
convoluted or unclear language such as material, risk-shifting contractual terms which are not
typically expected by the party who is being asked to assent to them and often appear in the
boilerplate of a printed form.67 Similarly, the court in Deiro v. Am. Airlines, Inc., noted that terms
in an agreement must be reasonably communicate[d] to purchasers in order to be enforceable.68
In addition, in Wattenbarger v. A.G. Edwards & Sons, Inc., the Supreme Court of Idaho considered
all of the circumstances surrounding the transaction which included the parties age and literacy
as well as the adhesive nature of the contract, and the manner and setting in which the contract was
formed.69
When determining whether a contract is substantively unconscionable a court will ask
whether the terms of the agreement are so unfair and one-sided that the contract itself will have an
overly harsh effect on the disadvantaged party.70 In other words, a court will deem a contract
substantively unconscionable when it is so one-sided that it shocks the conscience. 71 For
instance, in Campbell Soup Co. v. Wentz, Campbell Soup drafted and entered into a contract that
provided for the purchase of specialty carrots from two farmers at a price of $30 per ton.72 At issue
was a provision in the contract that prohibited the farmers from selling the carrots to anyone else
unless Campbell Soup approved.73 Moreover, the provision provided that Campbell Soup could

66

Schnuerle v. Insight Commc'ns Co., L.P., 376 S.W.3d 561 (Ky. 2012).
Id.
68
Deiro v. Am. Airlines, Inc., 816 F.2d 1360 (9th Cir. 1987); see also. Johnson, supra note 50, at 19.
69
Wattenbarger v. A.G. Edwards & Sons, Inc., 246 P.3d 961 (Idaho 2010).
70
State ex rel. Ocwen Loan Servicing, LLC v. Webster, 752 S.E.2d 372 (W. Va. 2013).
71
See. Chavarria v. Ralphs Grocery Co., 733 F. 3d 916 (9 th Cir. 2013).
72
Campbell Soup Co. v. Wentz, 172 F. 2d 80 (3d Cir. 1948).
73
Id. at 81.
67

14

reject any carrots that it did not want.74 When the market price of the carrots rose to $90 per ton,
the two farmers began to sell the carrots to other suitors.75 Subsequently, Campbell Soup filed an
action to enjoin further sale of the contract carrots to others, and to compel specific
performance.76 In its decision, the Appellate Court noted that the contract had obviously been
drawn by skilful [sic] draftsmen with the buyers interests in mind.77 Therefore, the court held
that the contract was too hard a bargain and too one-sided an agreement to entitle relief in a court
of conscience.78
Although the factors a court will use to determine substantive unconscionability will vary
based on the type of agreement, generally the court will consider the commercial reasonableness
of the contract terms, the purpose and effect of the terms, the allocation of the risks between the
parties, and public policy concerns.79 Additionally, in Grayiel v. Appalachian Energy Partners,
the court proposed a sliding scale when analyzing whether or not a contract is unconscionable and
noted that the more substantively oppressive the contract term, the less evidence of procedural
unconscionability is required to come to the conclusion that the clause is unenforceable. 80
2. Unconscionable Contracts of Adhesion
An adhesion contract is defined as a standard form contract drafted by one party and
signed by the weaker party, who must adhere to the contract and therefore does not have the power
to negotiate or modify terms of the agreement.81 Essentially an adhesion contract is a contract

74

Id.
Id.
76
Id.
77
Campbell Soup, 172 F. 2d at 83.
78
Id.
79
Id.
80
Grayiel v. Appalachian Energy Partners, 736 S.E.2d 91 (2012).
81
Adhesion Contract (Contract of Adhesion), LAW.CORNELL.EDU,
https://www.law.cornell.edu/wex/adhesion_contract_contract_of_adhesion (last visited Feb. 24, 2015).
75

15

that has not been bargained for and contains pre-printed terms of one-sided control.82 Practically
speaking, a contract of adhesion is a legal instrument utilized by the drafting party to minimize its
own risk while simultaneously protecting its best interests. 83 However, courts have shown a
willingness to strike down terms that appear to be unconscionable.84 For example, the Supreme
Court of California, in Graham v. Scissor-Tail, held that a form entertainment contract between a
music promoter and an entertainment company was unconscionable. 85 In Graham, a music
promoter was required to sign a contract of adhesion that required the selection of a particular
arbitrator in disputes.86 The court concluded that the provision was "presumptively biased" in favor
of the entertainment company, and therefore unenforceable because the music promoter was
required to adhere to the drafting party's wishes with little or no bargaining power."87 Lastly, it
has been noted that adhesion contracts should receive greater scrutiny than contracts with
negotiated terms.88
3. Boxing Management Agreements are likely Unconscionable
In general, a court will find a contract to be procedurally unconscionable in two situations,
(1) when a party lacks a meaningful opportunity to assent to the terms of the agreement, or (2)
when there is an unfair surprise, at the time of contract formation.89 As previously noted, a court
will also consider a parties age and literacy as well as the adhesive nature of the contract, and the

82

Mo Zhang, Contractual Choice of Law in Contracts of Adhesion and Party Autonomy, 41 AKRON L. REV. 123-24
(2008).
83
Id.
84
Wattenbarger, 246 P.3d at 961.
85
Graham v. Scissor-Tail, Inc. 623 P. 2d 165 (1981).
86
Id.at 165.
87
Id. at 173.
88
Brown v. Genesis Healthcare Corp., 724 S.E. 2d 250 (2011) (overruled in part on other grounds).
89
Schnuerle, 376 S.W.3d at 561.

16

manner and setting in which the contract was formed.90 The following analysis will demonstrate
that the standard boxing management agreement is likely unconscionable.
First, there is no meaningful opportunity for a professional boxer to assent to the terms of
the standard boxing management agreement due to the nature of the adhesive contract and the
coercive nature of the boxing industry. Because the boxing management agreement is offered to a
young fighter on a take it or leave it basis, the boxer is left without a meaningful opportunity to
assent to the terms of the agreement. Boxing management agreements have not been bargained for
and contain pre-printed terms of one-sided control.91 In order for a professional boxer to receive
the guidance and supervision necessary to be successful in boxing many fighters feel as if the only
option is to sign the agreement or risk not fighting. Similar to the entertainment contract in
Graham, where the music promoter was forced to sign an adhesion contract that forced the
selection of a particular arbitrator, boxers are forced to sign agreements that simply adhere to the
drafting partys wishes.92
Moreover, due to the lack of an effective regulatory system in boxing, boxing managers
are able to coerce boxers into contracts that would not be upheld if there was true oversight in the
boxing industry. As previously mentioned, fighters like Tim Witherspoon reasonably believed that
if they did not sign the agreements, they would be unable to fight or ever reach the championship
status because corrupt figures like Don King had the power to prevent them from doing so.93
Second, it can be said that boxers are unfairly surprised at the time of contract formation.
As previously mentioned, unfair surprise can occur when one party is unable to understand the

90

Wattenbarger, 246 P.3d at 961.

Zhang, supra note 82, at 124.
92
Graham, 623 P. 2d at 165.
93
Macnow, supra note 1.
91

17

terms of an agreement or when the party is unaware that the term exists.94 Unfair surprise can also
occur when there is unclear language or material, risk-shifting contractual terms which are not
typically expected by the party who is being asked to assent to them.95 The professional boxer is
unfairly surprised at the time of contract formation because the average boxer is young with
minimal education and is likely unable to understand the terms of the standard boxing management
agreement. Many boxers do not have the financial wherewithal to retain legal counsel, so the
fighter is unaware of the eventual costs of his decision. Like the contract signed in Green, where
homebuyers were unaware that they had waived their right to a jury trial, the boxing management
agreement fails to adequately advise the boxer that important rights are waived at the time of
contract formation.96
Courts will generally apply a sliding scale to determine whether or not a contract is
unconscionable.97 Therefore, a finding of procedural unconscionability will lessen the amount of
substantive unconscionability needed to render an agreement unconscionable and vice versa. As
noted previously, the standard boxing management agreement is procedurally unconscionable
because boxers are left with no meaningful opportunity to assent to its terms and are likely
unfairly surprised at the time of contract formation. As the following analysis will demonstrate,
several of the aforementioned provisions are likely substantively unconscionable. Thus, because
the

standard

boxing

management

agreement

contains

procedural

and

substantive

unconscionability, a court would likely render the agreement unconscionable and therefore
unenforceable.

94

Schnuerle, 376 S.W.3d at 561.

Id.
96
D.R. Horton, 96 P. 3d at 1159.
97
Grayiel, 736 S.E.2d at 91.
95

18

Boxing management agreements are substantively unconscionable because the terms of the
agreement are so unfair and one-sided that the contract has an overly harsh effect on the
professional boxer. 98 Similar to Campbell Soup where the plaintiffs tailored the purchase
agreement to prohibit the farmers from selling carrots to anyone else unless the plaintiffs approved,
the aforementioned provisions of the boxing management agreement have been skillfully drafted
with solely the boxing managers interests in mind.99
As previously mentioned, the champion clause is an option that can be exercised solely
by the manager to extend the contract beyond its original term in the event that any of the
aforementioned events occur. This clause has an overly harsh effect on the professional boxer
because as explained, the boxer cannot foresee how such lengthy and automatic extensions will
potentially result in the loss of millions of dollars.100 A fighter who reaches the championship level
will have the bargaining power necessary to negotiate a favorable deal and will work to reduce the
amount of commission a manager can earn. The champion clause eliminates a fighters
opportunity to renegotiate a more favorable deal and allows the manager to continue to charge the
maximum commission.
Similarly, the termination provision grants the manager the right to release the fighter from
the agreement for several reasons, but does not grant the boxer any right to terminate the
agreement. For example, subsection (a) of the termination provision allows for a manager to
release a fighter when he is not declared the winner of a bout. The provision is overly harsh
because it is the boxer who has relied on the managers advice to fight the opponent in the ring,
and it is the manager who supervised the training regime for the boxer. Therefore, the manager

98

Ocwen Loan Servicing, 752 S.E.2d at 372.

Management Agreement, supra note 27; Campbell Soup, 172 F. 2d at 83.
100
Nash, supra note 31, at 2.
99

19

should not be allowed to do away with the boxer when both parties have played a substantial role
in the defeat. Moreover, if a boxer wishes to terminate the manager because of his subpar
performance or simply because the boxer wishes to go in a new direction, he is unable to do so
without triggering the negative injunction provision.101
The commission provision, which entitles the boxing manager to one-third of all sums of
money earned by the boxer, can be said to shock the conscience.102 When a manager signs a
fighter, he agrees to provide best efforts to supervise and guide the fighters career.103 In fact, a
fiduciary relationship exists between the manager and fighter. 104 In exchange for mere best
efforts a boxing manager should not be entitled to one-third of a boxers earnings. The boxer is
the party that bears all of the risk of injury and defeat.105 Moreover, the fact that this material term
is offered on a take it or leave it basis can be said to have an overly harsh effect on the fighter.
Essentially a fighter is bullied into signing an agreement that will grant the manager one-third of
all his earnings or the fighter will risk never fighting or reaching notoriety in the sport.
Boxing management agreements are both procedurally and substantively unconscionable.
The circumstances in which the agreements are signed leave the young fighter without a
meaningful opportunity to assent to its terms and also unfairly surprise the young fighter who
does not fully understand the consequences of signing the agreement. 106 The substantive
provisions of the agreement are overly harsh and can be said to shock the conscience. 107
Therefore, boxing management agreements are unconscionable contracts of adhesion.
101

Management Agreement, supra note 27, at 5.

Chavarria, 733 F. 3d at 916.
103
Management Agreement, supra note 27, at 1.
104
Fried, supra note 20, at 92.
105
Tom Gatto, Oscar Diaz dies at 32; boxer suffered brain injury in 2008 title fight, SPORTINGNEWS.COM (Feb. 27,
2015). http://www.sportingnews.com/sport/story/2015-02-27/oscar-diaz-dies-died-boxer-brain-injury-comawelterweight-usba-san-antonio-delvin-rodriguez-.
102

106
107

Ehrlichman, supra note 18, at 423.

Chavarria, 733 F. 3d at 916; Management Agreement, supra note 27.

20

The next section of this comment will explain how the Muhammad Ali Boxing Reform
Act and State Athletic Commissions have both failed to protect boxers from coercive management
agreements.
V. A Counter With No Punch: A Look at The Muhammad Ali Boxing Reform Act
and State Boxing Commissions
In 2000, Congress passed the Muhammad Ali Boxing Reform Act (Ali Act), to address
the anti-competitive and corruptive business practices in the professional boxing industry. 108
Among other things, the Ali Act was enacted to protect professional boxers from either coercive
or unethical contracts.109 There are four provisions that attempt to address the widespread use of
unethical or coercive contracts. 110 The first provision, required the Association of Boxing
Commissions (ABC) to develop and . . . approve . . . guidelines for minimal contractual
provisions that should be included in bout agreements and boxing contracts. 111 The second
provision provides that any coercive contract provision shall be considered in restraint of trade,
contrary to public policy, and unenforceable against any boxer.112 The third provision relates to
various mandatory disclosures that must be made to the State Athletic Commission where a bout
is set to occur. 113 Finally, the fourth provision establishes a firewall between promoters and
managers with the idea that promoters should not have a direct or indirect financial interest in the
management of a boxer. 114 Unfortunately, the Ali Act and its accompanying provisions
contemplate the relationship between the boxer and promoter and not the relationship between the

108

Muhammad Ali Boxing Reform Act, 15 U.S.C. 6301 (2014); see also. Fried, supra note 20, at 78.
Id.
110
Id.; see also. Ehrlichman, supra note 18, at 428.
111
15 U.S.C. 6307a.
112
Id. 6307b(a)(B).
113
Id. 6307e(a).
114
Id. 6308(b).
109

21

boxer and manager.115 In fact, only the fourth provision of the Ali Act can be said to provide even
a modicum of protection to the boxer against his manager.116
The firewall provision of the Ali Act seeks to eradicate the potential for a conflict of interest
between a boxing manager and promoter.117 For example, it is well known that Don King forced
fighters to sign Carl King, his stepson, as their exclusive boxing manager.

118

This type of

arrangement is problematic because it is hard to imagine that Carl King or any other manager
would negotiate in the best interests of a professional boxer when a clear conflict of interest exists
with the promoter. 119 Therefore, the firewall provision of the Ali Act forbids a manager from
having any interest in the promotion of the boxer.120 Undoubtedly, this provision seeks to address
the potential for procedural unconscionability in negotiations between manager and promoter as it
aims to secure a fairer promotional contract for the fighter. Nevertheless, the provision does
nothing to address the likely procedural unconscionability that exists in the initial negotiations
between manager and boxer because it does not expressly contemplate such a relationship nor does
it address the formation of the initial contract between boxing manager and boxer.
Even if the Ali Act addressed the relationship between a boxer and his manager in the
initial contract negotiations, it would still fail to protect a boxer because it unwisely provides a
great deal of deference to the Association of Boxing Commission.121 The ABC is a consortium of
State Athletic Commissions created to standardize professional boxing regulations at the state and

115

Fried, supra note 20, at 78-9.

15 U.S.C. 6308(b).
117
Ehrlichman, supra note 18, at 427.
118
Macnow, supra note 1.
119
Hamilton, supra note 3.
120
15 U.S.C. 6301; see also. Ehrlichman, supra note 18, at 432.
121
15 U.S.C. 6301; see also. Ehrlichman, supra note 18, at 433.
116

22

national level.122 However, the ABC and State Athletic Commissions have proven incapable and
or unwilling to handle such regulation.123 Whether this is due to a lack of resources or a lack of
willingness, State Athletic Commissions operate largely as a faade.124 As previously noted, Carl
King was able to command 50% of Tim Witherspoons earnings due to the Commission not
actively regulating and enforcing its policies and procedures. 125 Moreover, many State Athletic
Commissions have actually eased their standards in order to attract the business of boxing to their
respective state.126 The practical result of this is that a boxing manager will essentially forum shop
to determine which state will overlook the coercive contract. Therefore, by placing the power of
enforcement and regulation in the hands of the ABC, the Ali Act fails to provide any real protection
to a boxer.127
In short, a boxer faced with a coercive contractual situation will not find redress in the Ali
Act or through State Athletic Commissions.128 The final section of this comment will provide
recommendations on how to correct this coercive and likely unconscionable practice.
VI. Conclusion
There is a substantial need for true reform in the boxing industry. 129 The relationship
between boxer and manager is one that has not received enough attention. As previously
mentioned, the Ali Act has not provided a boxer with a formidable defense against the coercive

122

Association of Boxing Commissions (A message from the President), ABCBOXING.COM (last visited March 18,
2015); see also. Damon Moore, Down for the Count: Is Mccain's Bill the One to Lift Boxing Off the Canvas?, 4 VA.
SPORTS & ENT. L.J. 198, 207 (2005) at 210.
123
15 U.S.C. 6301; Ehrlichman, supra note 18, at 437.
124
Ehrlichman, supra note 18, at 437.
125
Hamilton, supra note 3.
126
Edward Wong, Tyson Wins License to Fight Lewis in Washington, NYTIMES.COM (Mar. 13, 2002),
http://www.nytimes.com/2002/03/13/sports/boxing-tyson-wins-license-to-fight-lewis-in-washington.html.
(Explaining how Mike Tyson applied for a license to fight in a number of states before being granted a boxing
license in Washington).
127
Ehrlichman, supra note 18, at 440.
128
Id.
129
Id.

23

nature of contract formation in the boxing industry.130 Since its enactment, there have been no
prosecutions under the Ali Act.131 A young fighter should have the opportunity to use boxing as a
means of providing financial stability without being forced into unconscionable adhesion contracts
merely because it is a standard in the industry. Is the fighter who has worked his whole life to
perfect his craft supposed subject himself to unfavorable contract terms or else find a new dream?
Or is it time for the courts to step in and render these agreements unconscionable? Boxing
managers are supposed to serve the fighters best interests and help the fighter achieve financial
success before his short-lived career is up.132 Instead, there have been a number boxing managers
motivated by greed that have been allowed to swindle promising young fighters out of millions
because there is no one to prohibit such conduct.133
Some critics suggest that what is needed is a federal boxing commission to implement
uniform rules and regulations with aggressive oversight.134 On the other hand, maybe the next step
is for a professional boxer to challenge the legality of the standard boxing management agreement
on antitrust grounds.135 Alternatively, others have suggested that perhaps prominent boxers such
as Floyd Mayweather and Manny Pacquiao should seek to lead an effort to unionize boxing.136
Although boxers have unsuccessfully attempted to unionize in the past, never have prominent
figures like Mayweather or Pacquiao led the charge.137 At the very least, union representation
would bring about a collective bargaining agreement which would ensure fairer contracts and

130

Ehrlichman, supra note 18, at 348.

Id.
132
Fried, supra note 20, at 92.
133
Don King Prods., Inc. v. Douglas, 742 F. Supp. 741 (S.D.N.Y).
134
Scott Baglio, The Muhammad Ali Boxing Reform Act: The First Jab at Establishing Credibility in Professional
Boxing, 68 Fordham L. Rev. 2257, 2280 (2000).
135
United States v. Intl Boxing Club of N.Y. Inc., 348 U.S. 236 (1955) (establishing that professional boxing is not
immune from antritrust suit).
136
Ehrlichman, supra note 18 at 452; see also. Arlin R. Crisco, Fighting Outside the Ring: A Labor Alternative to
the Continued Federal Regulation of Professional Boxing, 60 Ohio St. L.J. 1139 (1999).
137
Ehrlichman, supra note 18 at 452.
131

24

would provide boxers with a better understanding of their rights through state and federal law.138
However, the key question is whether figures like Mayweather or Pacquiao would be willing to
sacrifice their own personal interests for the greater good.139
To allow boxing managers to coerce fighters into unconscionable contracts of adhesion is
like watching a bout where a fighter is repeatedly punched in the groin without consequence.
Everyone sees it but no one is doing anything. Its time to step in and call a fair fight!

138

See. Larry Coon, Breaking down Changes in new CBA, ESPN.COM (Nov. 28, 2011),
http://espn.go.com/nba/story/_/page/CBA-111128/how-new-nba-deal-compares-last-one; see also. Ehrlichman,
supra note 18, at 452.
139
Ehrlichman, supra note 18, at 450.

25