Marvin Harrison Jr. is a former Ohio State University wide receiver who was drafted 4th overall in the 2024 NFL Draft by the Arizona Cardinals. “MHJ” is proclaimed by many to be among the greatest wide receiver prospects of all time. He earned the Biletnikoff Award this past year, awarded to the nation’s best college wide receiver. And it certainly does not hurt his stardom or merchandising potential that his father, Marvin Harrison Sr., is an NFL Hall of Fame wide receiver.

All of that to say – sports paraphernalia companies should be itching to sign MHJ to deals.

Earlier this month, May 2024, Fanatics informed the public that it wanted to do just that. However, instead of revealing lucrative and eye-popping terms, Fanatics sued MHJ and his LLC for claims including breach of contract, anticipatory repudiation, and tortious interference. The damages are likely in the range of millions of dollars.

The claims are rooted in MHJ’s alleged violation of a binding term sheet – sometimes labeled a letter of intent, agreement in principle, or memoranda of understanding. These documents outline the basic terms of an agreement and help parties streamline the completion of outstanding negotiable terms and conditions. While a term sheet, and even a “binding” term sheet, are often unenforceable agreements due to their nature of laying out terms and more so agreeing to agree, there are factors that may cause such a term sheet to become enforceable. Key considerations determinative of whether such a document is enforceable include, but are not limited to (1) whether the writing incorporates all essential terms of an agreement; and (2) whether there is offer, acceptance, consideration, intent to be bound, and all other requisite elements of a binding agreement. Term sheets will likely be non-binding where material terms are undecided or where the document expressly states a right to not be bound until a formal agreement is executed.

Fanatics is likely quite certain of its chances of success here, as Fanatics would probably prefer to avoid an ensuing, unintended narrative for future rookies to consider. Something, perhaps, along the lines of, “Don’t sign with Fanatics, they sue their players.”

The fallout of this lawsuit will likely affect how young sports stars, and perhaps many others, treat binding term sheets. Prospective signees may be further incentivized to agree in principle to only very loose and incomplete terms, firmly articulating a given terms sheet is not binding and remains subject to signing a more formal and complete agreement.

This case illustrates a lesson in factors that determine whether a term sheet may be binding, and it seems reasonable to expect a certain NFL rookie superstar to take note.