Apr 8, 2010

Posted by in Business, Industry | 0 Comments

Endorsement Contracts: There is More to Them than Meets the Eye

In this day and age of advertising and marketing there are so many different methods to try to convey your message through the noise and clutter of magazine ads, web sites and the like. Different ways to market your product and get your message across are only limited by your creativity-and what rights you have acquired.

This is particularly true in endorsement agreements and athlete contracts. There is a broad variety of issues to consider and what might not seem important now could be very important in the future. That is why it is essential that you have some forward-thinking lawyers who have helped clients deal with their past debacles to anticipate issues which, if overlooked, could be the cause of a very rude awakening in the future.

It is important to specifically describe the services that the endorser is going to perform. How will they promote your company, brand or products? How many photo shoots? Are they going to write articles? Will they appear at trade shows? Will they appear at corporate conventions? What if they don’t? What happens if they do something that puts them in the headlines-but not in a good way? Think of Michael Phelps with a bong and what that incident has cost him and his sponsors.

How can you use the “results and proceeds” of the services they are providing and in what mediums? It is important to get as broad an array of rights as possible for as long as possible. Can you use it just in print ads? The Internet? What about at trade shows, on YouTube, corporate conventions, flyers, product labels, or posters? We have even negotiated endorsers doing the “on-hold” greeting when people call the corporate offices.

How and when you can terminate the agreement is important. This is especially true if your endorser does something that shines an unfavorable light on them. Also, for how long can you use the materials? What happens after termination-do you have a right for an extended period to run through your inventory?

In addition you want to make sure you control the use and not give the endorser too much power to decide how their likeness can be used. Also, you want to be clear that this is a “work for hire” agreement and that they retain no rights. You also want to be sure that they are an independent contractor and responsible for taxes, insurance and the like.

When a relationship between an endorser and company first starts out it is like a budding romance where everyone is happy and trusts each other. Like many relationships it can sour quickly. That is why it is so important to have a well drafted agreement which addresses all of the issues that may arise in what is hopefully a long and fruitful relationship.

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