WHEN is a written agreement not a contract?

The answer may be: when it is an employee benefits trust.

The SPL last night announced it would investigate Rangers over its use of EBTs. It cited the following:

''SPL rules D9.3 and D1.13 impose a prohibition on players receiving payments for playing football or participating in an activity connected with football except where such payments are made in accordance with a form of contract approved by the SPL and require that all such contracts are submitted to the SPL within 14 days of being entered into.''

There is, according to experts, a valid case to be argued that EBTs do not constitute a contract. Richard Cramer, a lawyer with FrontRow Legal, a firm that specialises in sports business, believes the discretionary nature of payments under trust rules is the opposite of the normal understanding of a contract.

''Rangers could argue to any inquiry that the EBTs are a private matter between club and player because they involve a discretionary payment. They could say to the league: ''Why should we inform you of discretionary payments that do not fall under the umbrella of a normal contract?''

He added: ''For example, with EBTs there is no contractual enforcement right. You are relying on the goodwill of your employer and you could advance the argument that if there was no contractual obligation to pay money then there is no binding contract.''

Cramer said: ''EBTs have always been a little bit scary from a player's point of view precisely because it is a discretionary payment. What the player is relying on is the ability of the owner or company to honour the agreement. It is always a risk but it once may have been a risk worth taking.''

He added, though, that this was not the case now. ''The taxman has put the frighteners on the clubs,'' he said.

However, he believed there was room for Rangers to manoeuvre with the SPL.

''There is an argument that the club could simply say that all EBTs fall outside the normal definition of contract,'' he said.

Graeme Nuttall, recently appointed independent adviser on employee ownership to the government and an expert on EBTs, said payments made under the scheme were ''not a contractual right''.

''There is no obligation to pay the employee a certain amount of money,'' he said. ''Typically, there would be an expression that you were part of a bonus plan and that would be paid into an employee trust. So it is not a contractual right for the player to receive a sum of money.''

He conceded, however, there would be documentation on both sides.

''The player would receive some documentation and there would also be a trust deed,'' he said. ''There could even be a document creating a sub-trust. You would expect letters of instruction from the club. The trustees would have issued guidance that is not strictly legally binding. It all works on a trust basis.''

Nuttall, a partner for Field Fisher Waterhouse, a leading law firm, was keen to emphasise that employee trusts had useful benefits for the community,

''Employee trusts are essential to achieving employee ownership in many cases. There are a lot of good, genuine employee trusts out there,'' he said.

''It has been a constant frustration to me over the years that employee trusts have been used for tax-driven purposes rather for genuine purposes,'' he said. ''I do not know the details of the scheme at Rangers but I assume it was tax-driven.''

Nuttall, who was approached by Nick Clegg, the deputy prime minister, to advise on employee trusts, said of tax-driven schemes: ''Examples like this cause terrible problems to those trying to promote schemes to give employees more say in the running of their business.

''One businessman who I had been advising phoned me up saying: 'What are you trying to get me into? Look what has happened to Rangers'.''

He added: ''I had to explain to him that I was advising on trusts to be set up as part of a genuine ownership structure.''