Welcome to a new series of blog posts that we’re calling Essential Clauses for Campaign Contracts. The goal of these articles is to highlight some clauses that can often get overlooked by brands or talent agencies when putting together contracts. We’re kicking things off by looking at moral clauses.
Imagine this scenario: a marketing agency has hired a large influencer to take part in a sponsored livestream to bring awareness to a new drink flavour for its beverage client. The livestream is today at 12 noon ET. However, the influencer isn’t particularly excited to participate in this campaign since they haven’t gone to sleep after a long night of celebrating their friend’s birthday. The influencer is groggy, has bags under their eyes, and is carrying a smell that even Post Malone would be turned off by. The influencer goes live at 12:10 PM ET, forgets an essential talking point that’s provided in the agency’s campaign brief, and is vaping an e-cigarette during the entire livestream.
The agency is mad, and by mad, I mean PISSED. They have invested time and resources into sourcing the influencer, contacting the influencer’s agent, negotiating the contract with the influencer, and ensuring the brand that they found the right influencer for the job. But the activation didn’t go as planned because the talent acted out, and now everyone is pointing fingers.
The brand is mad at the agency for using talent that was extremely unprofessional. The agency is mad at the influencer’s agent for failing to properly brief the influencer and make sure the influencer followed the agency’s instructions. The influencer agent is mad at the influencer as it’s questionable if the brand or agency will work with the agent or its talent again in the future.
Now, the brand and the agency don’t want to pay the influencer, but, when they look at the contract, they realize that there wasn’t actually anything in the contract that prevented the influencer from acting like a jerk on the livestream (for the purpose of this blog, let’s ignore arguments for material breach for showing up late and forgetting an essential speaking point). Chances are they’re out of luck unless they are willing to risk battling it out in court (or, arguably worse, in the court of public opinion on social media). However, if the brand and agency had foresight and thought of the risks associated with livestreaming (or dealing with difficult influencers in general), a morals clause in their campaign agreement may have protected them from the fallout of this scenario.
A morals clause requires a party in a contract to abide by certain conduct or refrain from doing certain activities to protect the other party’s image and reputation – it can be one-sided or mutual. In this case, if the agency had a morals clause in their contract with the influencer, they may have been able to either limit the amount of fees owed to the influencer or avoid paying the influencer altogether.
A morals clause may say something along the lines of:
“If the talent violates any law or does anything to bring the brand into disrepute during the term of the contract, including on the date of the livestream, the brand may (i) only pay the talent a pro-rated amount of the fees, or (ii) terminate the contract immediately with no fees owed to the talent”.
The above is meant to be a very rough example of a morals clause and is in no way legal advice. Morals clauses can be quite granular and can include specific restricted activities and different payment terms in the event of a breach and/or depending on the severity of a breach.
Other than the obvious reasons why a brand/agency would want to have a morals clause with influencers they hire for campaigns, talent agencies and talent themselves can also benefit from having morals clauses in their representation contracts. For example, let’s say that after the above scenario occurred the agent no longer wanted to work with the influencer. By having a morals clause in its representation agreement with the talent, the agent may be able to terminate the contract with the talent quickly (perhaps immediately) as opposed to waiting for a time period required to terminate without cause (which could be anywhere from 30 – 60 days, or more).
From the talent’s perspective, they can also benefit from having morals clauses in their representation agreements in the event their agency or an agency employee is caught in either a public or private issue that could risk damaging the talent’s reputation or the talent’s ability to get new business opportunities.
If you are a brand, agency, or talent looking to strengthen your agreements to ensure you are protected, please don’t hesitate to reach out to GME Law.
*Nothing in this blog is meant to be legal advice.
