Sign and trade
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A Sign-and-trade agreement is a type of contract allowed in the NBA collective bargaining agreement, wherein one team signs a player to a contract and trades him to another team. This is typically done to allow the eventual acquiring team to hire a free agent player at a higher salary then would ordinarily be permitted under the NBA salary cap.
Sign-and-trades are considered atomic transactions under league rules; if the acquiring team rescinds the trade for some reason (such as a failed physical examination), then the contract signed with the initial team is also voided. In this way, such an occurrence doesn't result in the initial team being stuck with a player they don't want, or under terms they might find unacceptable; the player is also protected from ending up under contract with a team he may no longer wish to play for. Such an event happened in 2005, when Shareef Abdur-Rahim was acquired by the New Jersey Nets in a sign-and-trade with the Portland Trail Blazers; the trade was subsequently cancelled by the Nets when a physical exam discovered scar tissue in Abdur-Rahim's knee. As a result of the cancellation; Abdur-Rahim once again became a free agent; his contract with Portland (who had his Larry Bird rights) was voided.
