Each league has a pool of Free Agents that includes players cut from other teams and players skipped in the Amateur Draft.
You can only have pending free agent bids that add up to the amount of salary cap space on your team. Any free agent bids that would take youa team over the salary cap, will not be processed. You will be prompted with the following message from the popup bid box if you try to make a bid that will take you over the salary cap:"You cannot submit a Free Agent claim for that much, because it will take your team salary over the league salary cap. Refer to the Sign-N-Drop section for more information."
Take an example of a league with a $50 million salary cap, and a team payroll is at $48 million. You can sign a Free Agent(s) that will take you all the way to $50,000,000 exactly. If you bid on more than one player, their bid amounts will count against your team’s salary for other bids you made. So, you can bid on Player A for $1 million, and Player B for $1 million, but if you want Player C who is also at $1 million, you will need to cut/trade some salary before placing your bid for Player C.
When you submit an offer to a Free Agent, you have the option of offering ''more'' than their asking salary, (this is common when multiple teams are bidding on the same player). If you sign a player at more than his asking salary, the amount offered over the player's base salary will be renewed ever year for as long as the player stays with the team.
If a free agents has multiple contract offers, they will sign with the team that offers the most money - in case of ties, they will sign with a randomly selected team.
When you sign a Free Agent, he will join either your AAA or Low Minors. If the player has no Active Roster experience, and you have room in your Low Minors roster (Low Minors has a maximum of 20 players), he will be assigned there. If the player has one or more year’s playing experience, or if you have insufficient room in your Low Minors roster, he will be assigned to AAA.
When placing Free Agent bids, you are permitted to select up to three players to be dropped from your roster should that Free Agent sign with your team. This is useful for teams who are currently over the salary cap with no clear path to get back under, or teams who do not want to lose the production of a current player until the replacement has signed on the dotted line. Sign-N-Drop is not without its limitations:
Once a player is included in a Sign-N-Drop transaction, he may not be included in another one until the first one has been cleared or cancelled. Players from your team who are included in Sign-N-Drop transactions may not be dropped from the roster or included in any trade offers.