For over a century, students who played sports for their universities were considered “amateurs.” This meant they were forbidden from being paid. In 2021, the rules changed across the United States. A new era began called NIL, which stands for Name, Image, and Likeness. For the first time, students won the legal right to own their own “brand” and get paid by companies for things like commercials, social media posts, and jersey sales.
When these rules first emerged, many students thought of their deals as “handshake agreements.” They viewed them as casual promises based on trust or a simple “thank you” for playing well. That era is over. Today, schools and the groups that fund them (called collectives) view these deals as high-stakes corporate investments. Because there are now millions of dollars on the line, these organizations are using litigation, which is the formal process of suing someone in court, to protect their money.
NIL Contracts Are Now Being Enforced
The world of college sports has shifted from “campus life” to “corporate life.” NIL deals are no longer informal arrangements; they are legally binding contracts. This means that if you sign one, you are making a legal promise that a judge can enforce, just like a professional athlete or a movie star.
A recent lawsuit by Duke University against quarterback Darian Mensah marked a turning point. It proved that if you sign a contract, the school expects you to honor it or pay a heavy price to leave. For students navigating the transfer portal, which is the digital system students use to switch from one university to another, hiring an NIL lawyer is no longer just a suggestion; it is a necessity to protect your career.
The Milestone Case: What Happened in Duke v. Mensah?
In January 2026, a legal battle between Duke University and Darian Mensah signaled the end of “consequence-free” transfers. After a successful season, Mensah attempted to move to the University of Miami. However, Duke’s NIL collective took him to court to enforce an exclusive licensing agreement.
In plain English, this was a contract where Mensah gave Duke the only right to use his brand. By trying to move to Miami and sign a new deal there, Duke argued he was breaking that exclusive promise.
The Key Facts:
- The Investment: Mensah’s deal was a professional-grade contract worth $4 million per year ($8 million total).
- The “Freeze”: A judge issued a Restraining Order. This is a legal “pause button” that allowed Mensah to transfer but legally blocked him from signing any new deals or making money at his new school until the Duke dispute was resolved.
- The Payout: To get back on the field, Mensah’s camp had to reach a settlement, which is a private agreement to end the lawsuit. This reportedly involved a massive buyout payment, also known as an exit fee, to Duke to release him from his old contract.
Why This Isn’t an Isolated Incident
The Duke case wasn’t a one-off warning. At the University of Washington, quarterback Demond Williams Jr. faced a similar crisis. After signing a deal worth millions, Williams briefly looked into switching schools. Washington immediately prepared a lawsuit to enforce the contract. Williams eventually stayed at Washington, realizing that leaving could trigger a legal battle he wasn’t prepared for.
These cases represent a fundamental shift. Choosing to switch schools is no longer just a personal or athletic decision; it is now a financial one. Athletes now face the reality of liquidated damages. These are pre-set “exit fees” written into the contract that specify exactly how much you must pay if you leave early. These penalties can reach hundreds of thousands, or even millions, of dollars.
What This Means for You and Your Family
Today, an NIL deal is often a Revenue-Sharing Contract, where you and the school are essentially business partners. When you sign, you are creating legal duties that follow you even if you move to a different state.
The real-world risks include:
- Automatic Repayment: Some contracts state that the moment you enter the transfer portal to look at other schools, you must pay back a portion of the money you’ve already received.
- Court Injunctions: A school can ask a judge to enjoin, or legally block, you from playing for a rival team until your contract dispute is resolved.
- Eligibility Threats: If a contract dispute isn’t handled correctly, it can trigger a review by the College Sports Commission (CSC). This is the new national organization that monitors these deals. They have the power to pause your ability to play in games.
Key NIL Terms You Must Understand
To protect your future, you need to know what you are actually signing. Here is the “legalese” translated into plain English:
- Liquidated Damages: Think of this as a “break-lease” fee. It is a specific amount of money you agree to pay if you break the contract early.
- Exclusivity: This means you are giving one brand the only right to use your face or name. If you sign an “exclusive” deal with one shoe brand, you cannot wear a competitor’s gear in public without breaching, or breaking, your contract.
- Transfer Restrictions: These are clauses that make it difficult to leave. They might require you to stay at a school for a set number of years or forbid you from transferring to a rival conference.
- Performance Benchmarks: This is often “pay-for-play.” The contract might say you only get paid if you stay on the roster, attend a certain number of public events, or maintain a specific grade point average (GPA).
How to Protect Your Career Before Signing
The best way to avoid a lawsuit is to catch bad terms before you put pen to paper.
- Professional Legal Review: Don’t rely on a family friend or a general lawyer. You need someone who understands the specific rules of the College Sports Commission (CSC).
- Audit the “Portal Clause”: Ask your lawyer: “What happens to my money the minute I enter my name to look at other schools?”
- Written vs. Verbal: In the legal world, a coach’s verbal promise means nothing if the written contract says something else. If a promise isn’t in the final document, it doesn’t exist.
Final Takeaway: Treat NIL Like a Business
The days of casual handshakes are over. Your NIL agreement is a professional business contract that impacts your bank account and your eligibility to play. Don’t let the excitement of a big offer cloud your judgment.
The lawsuits against athletes like Darian Mensah prove that schools will treat you like a professional business partner. You should treat your contract with that same level of seriousness.
Facing an NIL Contract Issue or Dispute?
NIL agreements are powerful tools, but they come with significant risks. Don’t sign a deal or respond to a legal threat without knowing your rights. The team at K Altman Law focuses on protecting student-athletes and their families through every step of this complex process.