Legal Battles in College Sports: Enforcement of NIL Contracts and the Future of Athlete-Institution Agreements

In the rapidly evolving landscape of college athletics, the emergence of NIL (name, image and likeness) deals has introduced a host of new complexities. Traditional notions of amateurism have been firmly supplanted, with top athletes now serving as coveted brand ambassadors with contracts that rival those of professional stars. The legal and practical implications of these agreements are being shaped in real time, with courts ruling on eligibility issues and athletes and universities navigating the first transfer period following the landmark House settlement in June 2025. This January, a pair of very public transfer disputes (both, coincidentally, involving highly rated quarterbacks) brought the growing tension between athlete autonomy and institutional interests to the fore.

The Demond Williams Jr. Saga: From Signing to Transfer Announcement and Back

In early January 2026, Demond Williams Jr. made headlines after signing a lucrative NIL contract with the University of Washington, reportedly valued at approximately $4 million. The contract was part of the NCAA’s new revenue-sharing model introduced as part of the landmark House settlement agreement, which allowed schools to distribute up to $20.5 million in direct revenue sharing payments to athletes across all sports for the 2025-26 academic year.

Following a standout sophomore campaign, his first as a full-time starter, Williams initially committed to returning for the 2026 season. It has been reported that consistent with contracts used by other Big Ten schools, Williams’ revenue-sharing deal with Washington precluded him from entering the transfer portal and prohibited the use of his NIL rights by any other school. However, just days after signing a revenue sharing deal with Washington, Williams announced his intention to transfer, a move that sparked controversy and legal questions. Williams subsequently parted ways with his agent, who publicly cited "philosophical differences" with his clients. And reports soon emerged that Williams could be liable to Washington for the value of his contract if he transferred.

The situation took another dramatic turn when Williams, after a period of reflection, announced he would remain with Washington after all. This reversal was accompanied by a formal apology from Williams and a statement emphasizing his commitment to the program. Washington’s head coach, Jedd Fisch, acknowledged the strain caused by the incident but expressed optimism about repairing relationships and moving forward.

Legal and Contractual Implications

This episode raises critical questions about the enforceability of NIL revenue-sharing contracts. The NCAA has long resisted classification of college athletes as employees, an issue that is actively being litigated in the Johnson v. NCAA matter, currently pending in the U.S. District Court for the Eastern District of Pennsylvania. Consequently, unlike traditional employment agreements, these contracts are often framed as licensing agreements, granting the school rights to an athlete’s NIL for a specified period. They frequently include buyout clauses—stipulations requiring the athlete to pay damages if they breach the contract early.

Legal experts have emphasized that these agreements are inherently complex. Because college athletes are not classified as employees, these deals resemble independent contractor arrangements, which complicates enforcement. The primary challenge lies in quantifying damages—how does a school prove financial harm if an athlete transfers or breaches the contract? Courts may find it difficult to determine appropriate damages, especially when contracts are negotiated with vague or broad language.

In Williams’ case, the contract’s language appears to have been designed to deter early transfer, potentially including a buyout clause that would require Williams to pay the remaining contract value if he left prematurely. It has been speculated that if Williams transferred, the new school would have to account for the $4 million contract against its revenue-sharing cap, which could also serve as a deterrent.

Enforcement and Future Outlook

Though Washington was ultimately spared the decision of whether to pursue legal action, had the university opted to pursue a claim, many legal scholars believe that enforceability hinges on how clearly the contract was negotiated and whether damages are reasonably quantifiable. Courts might uphold such agreements if they are well-drafted, but the blurred line between NIL licensing and pay-for-play remains an area of concern. In other words, because revenue-sharing deals technically compensate athletes for their publicity rights rather than for their performance on the field, there is a question of how to characterize losses arising from a potential breach of these agreements.

Darian Mensah Reaches Settlement to Transfer to Miami

The Williams case underscores the delicate balance between athlete rights and institutional interests. However, the broader implications are still unfolding, and the legal landscape is likely to see further disputes in light of increased player movement and allegations of tampering against programs that are aggressively seeking to add talent via the transfer portal. The most recent example of this ongoing turbulence is Darian Mensah’s contested transfer from Duke University to the University of Miami.

Mensah, a standout quarterback, initially signed an $8 million NIL deal with Duke. However, coming just days after resolution of the Williams saga at Washington, Mensah’s decision to transfer ignited another legal dispute, with Duke filing suit in North Carolina state court to enforce the terms of the agreement. Claiming “irreparable harm” arising from its exclusive license to Mensah’s NIL rights, Duke sought a temporary restraining order in an effort to block Mensah’s request to enter the transfer portal. In its ruling, the court did permit Mensah to enter the portal but granted a TRO precluding him from enrolling at or playing football for another school and from otherwise licensing his NIL rights pending resolution of the parties’ dispute in arbitration pursuant to the terms of the NIL agreement.

This latest legal battle further underscores the uncertainty surrounding NIL contracts, which are generally characterized as licensing agreements rather than employment or service contracts. In addition to unsettled legal issues, contested transfer cases have raised a host of policy concerns, with contractual rights and restrictions placed on amateur athletes often coming into tension. Ultimately, Duke and Mensah reached an out of court settlement, with Mensah officially committing to Miami in late January. Still, as the size of NIL deals continue to grow, it appears that schools are increasingly likely to resort to litigation to protect their investments.

Buchanan offers a comprehensive suite of services, providing guidance tailored to institutions, collectives, and businesses involved in the NIL space and other activities related to student athletes to ensure compliance and support at every stage.