On March 24, 1998, Law N. 9.615/98 stipulates that by 2001, clubs can sign a maximum five-year contract with a player when they turns 16 and stand to receive only a "penalty fee" of up to 100 times their monthly wage if they leaves before then.
The introduction of Pelé law also permits the formation of independent leagues by sports clubs across Brazil, which was a notion not previously allowed under the governance of the Brazilian Football Confederation.
These leagues will be private legal entities, and may, among other issues, negotiate on behalf of their members, sponsorship agreements, advertising and broadcasting contracts.
However, aiming to avoid confrontation with CBF, and consequently with FIFA, as well as avoiding the possibility of being forbidden to take part in the Copa Libertadores, the teams taking part in the Brazilian Professional Football League agreed that the Brazilian Championship in 2002 will be organized and promoted by the League jointly with CBF.
Following the established in FIFA Statute (article 7, N.5), taking into consideration the ENIC case, and aiming to reassure the "incertitude sportive", Law N. 9.981/00 has imposed a veto to any simultaneous participation of an individual or a corporation in the capital stock of two or more clubs disputing the same professional competition.
However, a PALC may have its terms suspended if the athlete becomes unable to exercise his activity due to an occupational accident or disease, suffered in the club or while defending any team selection.
Article 31 of Pelé law provides that if the club has not effected partially or totally the payment for the services for 3 (three) consecutive months, the PALC can be rescinded by the athlete without the latter incurring in any fine.
Moreover, pursuant article 32 of Pelé law, if the mentioned partial or total late payment lasts 2 (two) or more months, the athlete is allowed to stop playing for his team.
According to paragraph 3 of article 38 in Pelé law, the amount of the penalty clause is freely established by the parties entering the contract, but shall be limited to 100 times the annual remuneration agreed to.
It is important to note that according to Pelé law, the limit of the penalty clause and the referred to reductions will only be applicable in the transfers between Brazilian clubs.
The club has the right to negotiate the broadcasting of its matches and participation on championships as established in the caput of article 42 of Pelé law.
However, pursuant to paragraph # 1 of the same article, 20% (twenty per cent) of the income related to the broadcasting of the matches must be equally distributed to all Athletes of the team.
The amounts received as transfer of the broadcasting rights are not considered wages, therefore they cannot be used as basis for calculation of the penalty clause established in article 28 of Pelé law as explained above.