WHAT IS A CELEBRITY ENDORSEMENT AGREEMENT?

A celebrity endorsement agreement is a legally binding agreement between a company owning a brand or a product under a brand name and a celebrity or influencer who acts as a brand ambassador, in which such company engages the brand ambassador to provide his services as an influencer of the consumers to promote the company’s product and services on various platforms and media depending on the targeted consumer base of the company. The brand ambassadors and the company have to work together to actively promote the brand before its potential customers or audience and such agreements formalize and define the relationship between the company’s brand and the brand ambassador engaged by such company. Celebrity endorsement agreements are used by the companies to appoint the brand ambassador to legalize their relationship in connection with the promotion of the brand’s products and services. Such agreements can be labelled interchangeably as brand ambassador agreements, celebrity endorsement agreement, endorsement agreement, etc.

 IMPORTANCE OF MARKETING AND CELEBRITY ENDORSEMENT AGREEMENTS

In order to grow, flourish and keep up with the ever updating market conditions, marketing plays an important role for every brand existing in the market. An ever growing focus on brand development, awareness, and authority by deploying various marketing tactics has become one growing concern for any and every brand planning on having a celebrated product in the market. To survive competition from all corners, influencers and brand ambassadors are being hired by such brands for a particular period until their marketing targets are achieved.

Celebrities and notable personalities have lately become an integral part and parcel of the brands they endorse. Certainly, they are the face of the brand they endorse and the consumers relate to the celebrity endorser and the product as a package in many scenarios. Such developments have led to the origination of the term brand ambassador, who is a person who markets the product to the consumers and is the face of the product and/or the brand. In the persisting marketing conditions and scenarios, the celebrity endorsement agreement is a pertinent agreement to be executed in between the Company/person owning the brand and the celebrity brand ambassador. If the cut-throat competition around every popular product category if considered, the brands which are doing well in the market and have been on the receiving end of consumer appreciation and subsequent high profits are often noted to engage a notable celebrity to endorse their brand so as to capture a larger market share using the visibility of the celebrity, while paying a fair amount of consideration to the celebrity for his services. Hence, as the brands are ready to spend humongous amount of money and resources on marketing and celebrity endorsements forms a imperative part of every modern day marketing strategy, it becomes very pertinent for all parties involved in an endorsement arrangement to execute a celebrity endorsement agreement to capture the rights and obligations of all such parties involved. 

It is very important to have an executed agreement which serves as a legal record and a valid proof of agreements in between the parties in the event of any possible disputes or differences that may arise in future relating to the agreement and protect the legal rights and interests of both the contracting parties and for this very reason it becomes absolutely necessary for the parties to execute a celebrity endorsement agreement. Like any other agreement, it helps in reassuring the parties that their contractual relationship will be carried out as agreed by them. Apart from being enforceable in a court of law it also adds to building the credibility and legitimacy of both parties.

PROVISIONS TO BE CAPTURED IN A CELEBRITY ENDORSEMENT AGREEMENT

A celebrity endorsement agreement includes the rights and obligations required by the company to be fulfilled by the brand ambassador in a certain period stipulated in the agreement. Typically, the celebrity endorsement contact may include:

  • Exhaustive details of the company and the brand ambassador entering into the agreement.
  • Details of rights and limitations pertaining to the services or duties exchanged in connection with sales and promotion to be provided by the brand ambassador to the company.
  • Detailed guidelines and timelines that are to be adhered to by the brand ambassadors while performing their contractual duties.
  • Actions that brand ambassadors should restrain themselves from performing during the time period that they are representing the brand (restrictions). Such restrictions may include endorsement of competing products, engaging in illegal activities, non-disparagement, performing any acts which may prove to be detrimental to the reputation of the company.
  • Compensation and/or commission details of the agreement (Consideration), which is to be provided by the company to the brand ambassadors in return of their services.
  • Exhaustively capture the details of the particular products or services of the company which brand ambassador has to endorse while providing his services.
  • The obligation of the company or brand to perform in assisting brand ambassador performing his part of the agreement.
  • Standard terms and conditions like mode of payment, details and number of promotional events or activities to perform, confidentiality and intellectual property terms (if any), etc.
  • Legal responsibilities and disclosures of parties to ensure proper compliance required by law.
  • Other miscellaneous but pertinent terms and conditions are required to be fulfilled by the parties in the form of requisite clauses such as:
    • Dispute resolution mechanism between the parties;
    • Provision for protection of intellectual property rights;
    • Provision for protection of unauthorised disclosure of confidential information;
    • Provision relating to indemnity to be provided by parties in the event a loss is suffered by either party due to an action/inaction of the other party;
    • Term and termination agreements between the parties; and

    • The representations and warranties provided by each party to the other party.

The above points can also be used as checkboxes while drafting the brand ambassadorship agreement.

IMPORTANCE OF PROFESSIONAL DRAFTING OF CELEBRITY ENDORSEMENT AGREEMENT

There are a plethora of templates available for such agreements on the internet, but they are not specifically designed to cater to the needs of the brand and in the case of a brand ambassador, for the nitty-gritties of their job. Therefore, hiring a team of lawyers who are seasoned at such agreements is very important to capture each and every detail and requirement that each parties desire.


Disclaimer:
The content of this article is for information purpose only and does not constitute advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer to relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up. The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that the Author / Treelife Consulting is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof.

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