There is a lot of talk on this board about buyout clauses – who has them, how much they are, who will and will not pay, etc. I thought some facts and discussion about buyout clauses would be useful.

First, remember that a coaching contract is a personal services contract between and individual and an organization or enterprise. Courts in most states are very reluctant to enforce specific performance in the event either party (especially the employee) breaches the PSC. That means if Joe Coach wants to walk away from the remaining 8 years on his contract with your school to go to work for Podunk State, no court would force him to continue to be your coach until that contract runs out. A court probably would, however, require him and/or Podunk State to pay your school reasonable damages caused by Joe's breach.

I've never looked at a coach's contract, but I'm certain that any contract would have a clause specifying that if the coach terminates the contract early, they will pay for the damage caused. The contract probably states (but does not necessarily quantify) what those damages might be, including search firm fees, travel expenses to conduct interviews, etc. In some cases, the contract will state that in lieu of those damages, the coach will pay a fixed amount to settle those damages. This is the buyout clause. The text of Les's buyout, which has been posted here, refers to this as liquidated damages.

So are buyout clauses always ironclad and enforceable? Not necessarily -- especially when they are for huge amounts of money in relation to the employee's salary. Enforcing the letter of a buyout clause that is exorbitant in relation to the actual damages would be roughly the same thing as forcing the employee to remain employed for the term of the contract.

So how often do schools waive or accept a reduced buyout when a coach leaves? Logic tells me that it is quite common. Why? Well, first of all, remember that the buyout clause is probably not fully enforceable anyway. Second, in many cases, when a coach wants to leave the school may have an interest in them leaving, so there is a mutual benefit. Third, in those circumstances when the coach wants to leave and the school wants them to stay, the school realizes that they have other things they want to achieve more than they want what little buyout money they could in fact collect. There are any number of things the school might want, including a quick end to the process, a tacit understanding that Joe Coach won't initiate contact with next year's recruits that have committed to your school, or just an ongoing cordial relationship with Joe and Podunk State. Remember, you never know down the road when your school might want to hire a coach from Podunk State or from some other school run by the former chancellor of Podunk State.

So why would a school bother with negotiating a buyout clause? In short, it provides an answer to questions from fans, recruits and the media. Coach, if I come to play for you, will you leave for another job [at Podunk State]? Son, if I was to do that, I'd have to pay a buyout of 30 gazillion dollars. Do you think I would be able to do that? It also provides some leverage in the event that the coach wants to leave.