Case Commentary: Are Post Contractual Obligations Valid In Percept D'mark (India) Pvt. Ltd. V. Zaheer Khan & Anr.
- IJLLR Journal
- Jun 29
- 2 min read
Eshan Chauhan, Symbiosis Law School Noida
ABSTRACT
Percept D’Mark Pvt. Ltd v. Zaheer Khan is seen as an important case in the field of sports law that stresses on the validity of post contractual obligations in player endorsement contracts. This case has largely influenced how sports contracts are drafted, with emphasis on legality, fairness and contractual clarity in player endorsement contracts. This case intersects itself with contract law while setting a precedent for future cases regarding athlete’s contractual disputes in India. By doing a through case analysis, I will also highlight the case’s significance in sports law.
Introduction
The case of Percept D’Mark Pvt. Ltd v. Zaheer Khan is an important example of the unauthorised restrictions placed on an athlete after their contract has expired and the issues that surround the rights of the athletes. Athletes have the right to be enter and exist into a contract freely and must not be bound by the unfair terms which are imposed upon them. In the sports world, athletes enter into contractual agreements with brands to use their image for promotional purposes. However, the frequency with which athletes are stuck in these biased contracts leads to questions on the protections available to these athletes. This case focusses on the rights that are available to athletes when stuck in such contracts. Emphasis is also laid on the risk's companies also take when they engage in unfair contractual relationships. This case serves as a reminder to companies to be aware of the repercussions and legal consequences when misusing an athlete’s right as it may lead to potential brand damage.
Facts
Percept D’Mark, a company incorporated under the Companies Act 1956, entered into a 3- year contractual agreement with Zaheer Khan as his agent for media, consulting and marketing services on 1st November 2000 with the contract expiring on 29th October 2003. Clause 31(b) of the agreement (Right of First Refusal) stipulated that Zaheer Khan was to inform D’ Mark before signing any 3rd party endorsement so that D’Mark could match that offer. On 28th October 2003, Zaheer argued that Clause 31(b) was in violation with his rights under Section 27 of the Indian Contract Act which prohibits restraint of trade. After the expiration of the contract, Zaheer Khan entered into a new agreement with another company (Respondent 2). Percept then filed for an interim injunction to stop Khan from signing any new deal with a third party under Section 9 of the Arbitration and Conciliation Act, 1996. The single judge of the High Court granted the temporary injunction, but the division bench of the High Court overruled the decision of the single judge on 19th December 2003, thus cancelling the injunction. Percept then approached the Supreme Court.
