The digital age has rocketed content creators to the forefront of entrepreneurship. Content creators often do more than create content; they build lucrative online presences that serve as platforms for diverse businesses. So many content creators use this platform to build businesses such as clothing companies, makeup brands for niche communities, and educational services in niche practices. With the launch of these other businesses, influencers often outsource parts of their businesses, such as manufacturing of clothing or creating product line designs, to third parties. It is absolutely crucial to have contracts in place for each and every task outsourced to any person or company that is not part of the content creator’s brand.
Contracts are the backbone of every business relationship. Contracts are the safeguards to the brand content creators work so hard to build. Contracts are absolutely essential to the business regardless of the content creator’s following size or years in business. Without contracts, content creators are subjecting their brand to loss of their creative work, products, and services that gives the competitive advantage in a highly competitive marketplace.
Basic Terms of the Agreement
Influencers often fail to memorialize in writing the basic terms of the agreement with the third party hired to assist with the strategy, business dealings (ambassadorships, attending events for brands or the event hosts themselves), creation, editing, and/or publication of the content. This is the same for any product or services the influencer creates with the help of a third party. Influencers must carve out specific language detailing basic terms such as:
- the nature of the business relationship,
- the extent and time frame of the business relationship,
- all agreed upon obligations of the influencer,
- ownership over any intellectual property created during the business relationship,
- limited use of your or another party’s intellectual property (secret formulas for products, specialized artwork for products, use of trademarks and copyrights for a limited purpose)
- pay structure of the business dealing,
- non-disparagement clauses,
- limited access and rights over an influencer’s posts and social media activity during a business relationship.
These are only a few of the many basic terms that need to be clearly stated and agreed upon by both parties. Business relationships often do not work out for a number of reasons that do not require anything but an amicable parting of ways. Detailing such basic terms can allow influencers and others they engage with in routine business relationships (i.e. video editor, agency, paid brand partnerships, partnerships with other influencers) to walk away amicably when the business relationship no longer benefits one or either party.
Important Terms
Jurisdiction in the event of a breach.
A jurisdictional clause expressly provides the court the parties will go to in the event that court intervention to resolve a business dispute is necessary. Often times, online businesses, the starting point for an overwhelming number of content creator’s businesses, includes business relationships with third parties not located in the same state or even country. A jurisdictional clause that favors the state the content creator is located in or the state the content creator’s business is formed is crucial to ensuring the content creator can seek a legal remedy in the event of a breach without having to incur additional expenses of going to court in another location. It is an easy addition to every contract. Influencer should review all contracts with this clause in mind and ensure the jurisdiction in the event of a breach works for the influencer.
Arbitration Clauses
Arbitration clauses are another helpful clause to incorporate into contracts. Arbitration provides a clear, efficient, and cost-effective alternative to court intervention to resolve disputes of a business relationship. It is essentially a form of mediation that can provide a legally binding resolution, unlike mediation. This is an important consideration for influencers as it provides a forum to resolve conflicts and provide a higher chance of parties preserving the relationship in the process of resolving the business dispute, unlike litigation. It is an important clause to consider. Content creators should consult an attorney to determine whether this should be incorporated into certain, if not all, of their contracts.
Non-Disparagement and Confidentiality
Non-Disparagement and confidentiality clauses are crucial to every contract for content creators. The competitive nature of the social media platforms that content creators work within is extremely vulnerable to public perception. The users of social media platforms have and will continue to tarnish and in extreme examples, destroy brands that content creators build. When business relationships sour, content creators often become the center of public controversy as users of social media platforms are quick to take sides on and tarnish the opposing party in the process. However, the law has provided a simple method for circumventing unwanted attention for parties seeking to resolve business disputes – non-disparagement and confidentiality clauses. These clauses allow the parties to resolve the business dispute behind closed doors and prohibit either party from speaking about the matter outside of certain circumstances clearly defined within the clause. This clause is an easy addition for every contract which all influencers should implement into their contracts. A lawyer can help narrowly tailor this clause to the specific circumstances the content creator faces and effectively enforce the clause to ensure privacy surrounding details of business relationships.
Content Ownership
One extremely common mistake includes understanding who owns the content and when, a.k.a. copyrights. When an influencer hires a third party to create the content – a videographer, a photographer, etc. – the influencer does not own the content outright under the eyes of the law. The person who created the content into a tangible, physical form owns the content, unless the influencer enters into a contract specifically stating that all content created for the influencer is owned by the influencer from the inception.
This is an essential term to any contract involving a third party handling any sort of unique asset for the company such as manufacturing the product, designing or digitizing the artwork for the product, and so much more. Content creators cannot register copyrights for their business if the content creator does not own it. Content creators cannot conduct YouTube takedown requests for defamation or copyright infringement or enforce their rights over other content creators using the work on their own social media channels or in advertising for competing products. Without ownership, the content creator will struggle to take any effective measure to limit the use of the copyrighted materials to their brand only. Over time, the content creator will lose the work to competitors and unauthorized users to a diluted marketplace where consumers will no longer associate the unique, copyrighted material to your brand any more.
Content creators should hire a lawyer to ensure this clause is incorporated into all necessary contracts. Without control over ownership, content creators will not have access to the necessary avenues to protect the work and the brand from competitors and unauthorized users in the marketplace.
Breach of Contract
Content creators often have oral agreements with third parties completing work for their business. However, it is easy for any party, including influencers themselves to accidentally breach contract terms. This becomes specially true when basic details are not memorialized to refer back to, there is no follow-up, or there is any dispute as to what each party’s obligations were in the contract. If either party decides to pursue a breach of contract issue, it will be quite costly. The parties are subjecting the fate of the agreement to a third party to interpret the intent of both parties. No one is a mind reader and it is a costly task that often leaves both parties disappointed and extremely upset in the cost, time, and feeling like the outcome was unfair.
Often times, the party that wins a breach of contract lawsuit is not the person who is right, but the person who has the money to bring the lawsuit. If you do not have the funds to defend against a lawsuit, take the basic step to detail the contract terms.
It’s Not That Simple – Contracts Are Essential and Effective
Contracts are a basic step in every business relationship. If you are an influencer with a sizable following to which you receive any benefit, you should start thinking of yourself as a business. If you have any third party assisting with creating content, editing content, helping in any way with getting a product or service to market, contracts are essential. Hiring a lawyer is a basic step to help structure your business dealings including when you should have a contract and the terms of the contract that makes sense for your brand. Influencers are easy to take advantage of by companies and agencies namely. A contract is a simple step that will save content creators time, energy, and money. It ensures that all parties clearly understand their obligations in the business relationship.
If you are a content creator and you are interested in learning what a lawyer can do to help you protect and scale your brand, contact Ali Arko ala@kjk.com or Hannah Albion hra@kjk.com, or schedule a consultation by calling us at 216.716.5631. Be sure to ask for more information about our Influencer Turnkey Package program.