Lin again
The dust has settled and I have a final thought about Lin. I saw a recent article, emanating from Houston, with quotes from the Houston front office.
There was plainly an original offer which included a team option year in the fourth year and just under $10M in the third year. It appeared rather clear that the Knicks would match. The Knicks then went out and signed Kidd and Camby to contracts that extended into that third year.
The first offer was apparently not "formalized," but that does not mean that it was not binding on the two parties -- Lin and the Rockets -- if one of them wanted to enforce it. There was at least a verbal "offer" and a verbal "acceptance."
Most jurisdictions have a legal doctrine known as the "statute of frauds" which applies to certain purely "verbal" contracts. The formation of the Lin - Houston original offer/agreement would probably be covered under the law of Texas.
The Texas statute of frauds provides that an agreement that is not to be fully performed within one year of the date of agreement is not enforceable against a party unless the agreement, or a memorandum of it, is in writing and signed by the party to be charged. These things do not necessarily require "inked" signatures and I doubt that the offer from Houston was not memorialized in some binding form or another.
The parties, of course, could, by another agreement, change the terms. Certainly, however, for public relations and other reasons, Houston could not renege on the original offer. Nor, for the same reasons could Lin, if another team came in with a better offer.
What follows from this is that Lin could have insisted that Houston honor its first offer. He would not lose that offer, though he would lose the extra $5M in the third year of the new offer. Lin and his agents had to know that the third year of the new offer, worth an additional $5M to Lin, would cost the Knicks because of luxury tax consequences something north of $20M.
Five million dollars is substantial, but success in the New York market would certainly have made that up in short time. Lin's decision to take $5M at a cost to the Knicks of likely more than $20M had to tick off the Knicks' front office.
It is my understanding that Lin signed the new offer without even notifying the Knicks first. I do not think Lin would have done it this way unless he wanted Houston where he can be the alpha male. The Knicks are, of course, Melo's team and Melo is the Knicks' alpha male.