Mishcon de Reya Associate Charlie Delaney last night featured on BBC News talking about Adidas' termination of its sponsorship arrangement with IAAF four years early following the doping scandal in athletics.
Charlie, who specialises in commercial agreements, commented that while he hasn't seen the contract, it is usual for such contracts to have a get out clause, known as a morality clause. A lot of sponsors include morality clauses in their contracts for exactly these sorts of situations – and they are often the most hotly debated and negotiated clauses due to the wording of them. Charlie speculated, based on the release that came through from Adidas yesterday, that it is clear that Adidas thinks it has a contractual right to walk away from this deal.
He added: "A sponsorship agreement is supposed to create a good relationship between the sponsor and the sponsored body or athlete. I would suggest that Adidas has closely looked at the drafting of this clause and concluded that its reputation has now been damaged to such an extent that it can evoke this clause and walk away."
If you have any questions about this story, please contact Charlie Delaney or Lewis Cohen.