Last Minute Contract Changes
Why you must take time to carefully consider any last minute contract changes in negotiations.
Formula 1 Contracts in the News.
You may have heard in the news or on social media about the Driver Contract drama over racing driver Oscar Piastri currently playing out in the early 2022 F1 season.
So far, it appears that Team Alpine (Piastri’s employer) tried to use him to negotiate with his team mate Fernando Alonso, and instead have (potentially) neither driver for the 2023 season.
The situation is currently being presided over by the Federation International de l’Automobile (FIA) Contract Recognition Board (CRB). The CRB is a specialist arbitral panel charged with supervising Driver Contracts, which came into being after a certain Michael Schumacher agreed to drive for Jordan F1 (or so they thought) in 1991.
He subsequently signed with the Benetton team instead after just one race in what turned out to be one of the most inspired moves in F1 history. A salutary tale of last minute contract negotiations!
So what happened?
The printed letter agreement (prepared by Jordan) was short but well worded in Jordan’s favour, however Schumacher’s legal advisors made some clever last minute manuscript amendments:
Jordan F1’s management were negotiating under extreme time pressure and thought they had a ‘gentleman’s understanding’, and crucially it seems they did not have their lawyer check the revised wording.
The effect was disastrous – changing ‘the driver agreement’ to ‘a driver agreement’ and removing the obligation that the agreement be ‘substantially in the form already produced’ transformed it from an agreement in principle to a worthless agreement to agree, keeping Schumacher’s options open. This changed the course of F1 history and cost Jordan F1 many tens of millions.
What is written in the contract is what you will get…
So a key lesson learnt – a contract should always be an accurate written record of what is agreed. What is written in the contract is what you will get, regardless of what you intended, so always get an expert eye to check any revisions, even when you’re under pressure to get the deal done.