Contract Law

Revenue Sharing (The Future Contract Model): Beginning in the 2025-2026 academic year, the NCAA and its conferences are permitted to implement a revenue-sharing model. This allows colleges and universities to directly pay student-athletes a portion of their media rights, ticket sales, and sponsorship revenues, capped at an estimated $20.5 million per school annually.

End of Amateurism as a Contractual Restraint: The approval marks the end of the NCAA's power to enforce its historical amateurism model as a restriction on commerce and contracting. It essentially affirms the athletes' right to contract for compensation derived from their identity and labor.

Agreement with the Decision Rationale

I strongly agree with the judicial necessity of this decision (settlement approval), as the previous NCAA rules constituted an unlawful restraint of trade and violated fundamental principles of contract law and antitrust law.

Justification based on Contract Law Principles

Lack of Mutuality of Obligation/Consideration: The core principle of a valid contract is mutual assent and consideration (the bargain for exchange). The prior NCAA model, which required athletes to sign an eligibility form relinquishing their NIL rights as a condition of playing, was fundamentally imbalanced. The NCAA and the universities received immense commercial benefit (billions in media rights) from the athletes' labor and likeness, while the athletes received only a limited scholarship. This extreme disparity points toward unconscionability—a contract term so grossly unfair or oppressive to one party (the athletes) that the court refuses to enforce it, especially when the dominant party (the NCAA) had vastly superior bargaining power.

Sample Answer

Current Event: The NCAA NIL Settlement (House v. NCAA)

The case of House v. NCAA was a class-action antitrust lawsuit challenging the NCAA's amateurism rules, which for decades prohibited student-athletes from being compensated for the use of their Name, Image, and Likeness (NIL). This ban effectively restricted the athletes' ability to enter into commercial endorsement or sponsorship contracts.

The Court's Decision (Settlement Approval)

U.S. District Judge Claudia Wilken ultimately granted final approval to a historic settlement in June 2025 (after preliminary approval in late 2024). The key components of the decision, which dictate the new contractual reality, include:

Back-Pay Damages: A total of approximately $2.8 billion was allocated to current and former student-athletes who played during the defined class period (starting around 2016) to compensate them for the economic opportunity they were denied under the previous restrictive rules.