Shifting Risk

It is a abundantly clear that the main purpose of a contract is to protect yourself and shift risk. Regardless of what you are told, people are inherently selfish. At the root of this selfishness is money itself. Now, this is a totally justifiable selfishness. We need money to function, profit and survive. In contracting with someone in any circumstance, your first concern is (or should be) self preservation. Self preservation while receiving consideration in which you contracted for in the first place. The core of this self preservation is based on risk. Risks include: loss of funds, concerns of physical safety and ability of the opposite party to hold you liable. So it is conceivable, considering the human condition, that one might want to maximize benefits while eliminating risks. Speaking from a legal point of view, the case can be made that many clauses within a contract are used for this purpose. Specifically, moral clauses, notice, waiver and severability. 

Moral clauses are excellent ways for contractors to stack the odds against a contractee (Epstein, 2015). The contractor has the ability to terminate a contract should the contractee act in a manner that the company does not agree with (Epstein, 2015). Sure these are necessary in instances where athletes are arrested or charged with a crime but this isn't always the case (Epstein, 2015). The moral clause can be worded in a way that allows for the contractor to have a broad right in which to terminate the contract (Epstein, 2015). This is only dependent on a notice (Epstein, 2015). From there the contractor can, under strict clause suspend or terminate the contract (Epstein, 2015). This can stem from something as simple as a controversial tweet. Therefore, this clause allows the contractor to make an athlete the face of their brand, rake in the profits and have the entirety of the risk placed upon the athlete (Epstein, 2015). 

When discussing notice, it is abundantly clear in the scope of professional sport that organizations have the upper hand (Findlay, 2017). An athlete can have their contract terminated or traded to another team and all the owner must do is provide a notice. Sure there was a risk in investing millions of dollars into an athlete but notice allows a shift of significant risk onto that athlete. This is abundantly true in the NFL where contracts themselves are non-guarenteed. This puts a significant amount of risk onto the athlete. This is why NFL players push for guarenteed money, to shift the risk back onto their employers. The contractual shifting of risk appears to be the cornerstone of contracts themselves.The waiver is maybe the greatest example of shifting risk from one party onto another (Findlay, 2017). In fact, the waiver allows for a total shift of liability away from an organization and onto an individual (the most common form of waiver)(Findlay, 2017). Organizations such as skiing resorts utilize these waivers often. Similar to the purchase of a ticket to a sporting event, the purchase of lift ticket locks you into an agreement. The waiver is usually located on the back and what it does is shift all liability onto the consumer. Now, this is not to say that a waiver of this magnitude is not required in this circumstance because it is. Ski hills are dangerous and risk of injury can be great. In a wise move the organizations have shifted some (or all) of this risk onto the user. Totally reasonable way of conducting business. This is another example of the risk power struggle. Your goal, when contracting with someone should always be maximization of benefits and limitation of risk. Conducting yourself in any other manner is short sighted and unnecessarily risky. 

Finally, severability is an excellent tool for shifting risk. Severability allows for an agreement to remain intact should a provision within the agreement become unenforceable (Fish, 2015). So if a clause fails, it can be struck from the record and the rest of the agreement remains intact (Fish, 2015). This is an excellent tool against the voidability of a contract. Should one side feel the risk is too much in their favour they may look for a way out of a contract. Under severability, this process becomes much more challenging (Fish, 2015). Therefore, this can be used as a great tool to combat another party in the battle that is shifting risk. To conclude, it is absolutely feasible that all contracts are about shifting risk onto another party. Human nature tells us that we want the most positives with the least negatives in any and everything in our lives. Contractually, we want benefits and profitability, we don’t want to assume a large risk or be liable should a deal go bad.

Works Cited 
Epstein, C. (2015). Morals Clauses: Past, Present and Future. Journal of Intellectual Property and Entertainment Law, 5 (1), 72-80.

Findlay, H. Boiler Plate Clauses (PDF document). Retrieved from: https://lms.brocku.ca/portal/site/8e008920-1bb8-4782-9cbd-c5431de7a0aa/tool/2a27ddd8-a780-4221-b048-c5be89a377e3
Fish, E. (2015). Severability as Conditionality. Emory Law Journal, 64, 1296-1304.

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