Compensation for breach of contract
Also called article 17 compensation, positive interest
Where a contract is terminated without just cause, the injured party is entitled to compensation calculated on the positive interest principle, which asks what they would have had if the contract had run rather than what they have spent.
The starting point is that the party who suffered the breach is entitled to compensation, calculated on the damage suffered according to the positive interest principle, on the facts of the individual case and with regard to the law of the country concerned. Positive interest is the important phrase: it looks at the value of what was lost, not at costs thrown away.
For a player the regulations then set out the arithmetic. If they signed no new contract, the general rule is the residual value of the terminated contract. If they had signed a new one by the time of the decision, the value of that new contract for the corresponding period is deducted, which the regulations call mitigated compensation.
There is an addition that matters in unpaid wage cases. Where the early termination was due to overdue payables, the player also receives an amount equal to three monthly salaries, rising to a maximum of six in egregious circumstances. The total can never exceed the residual value of the contract that was ended early.
A validly negotiated collective bargaining agreement at domestic level can depart from all of this, and where one exists its terms prevail. Entitlement to compensation cannot be assigned to a third party.
Worked example
A player with two years and 800,000 remaining terminates for unpaid wages and signs elsewhere for 500,000 over the same period.
The mitigated compensation is 300,000. Because the termination was for overdue payables, three monthly salaries are added on top, and the total is still capped at the 800,000 that was left to run.
Source: FIFA Regulations on the Status and Transfer of Players, January 2026 edition, art. 17 para. 1
Related terms
- Just cause for unpaid salariesA player whose club unlawfully fails to pay at least two monthly salaries has just cause to terminate, provided they first put the club in default in writing and allow at least 15 days to comply.
- Overdue payablesOverdue payables are amounts a club has delayed paying to a player or another club for more than 30 days without a prima facie contractual basis, which may be sanctioned.
- Sporting sanctionsSporting sanctions are the restrictions imposed on top of compensation when a contract is breached during the protected period: time out of official matches for a player, a registration ban for a club.
- Protected periodThe protected period is the opening stretch of a contract during which terminating it without just cause carries the heaviest consequences: three seasons or three years for a contract signed before the player turns 28, and two of each after.