Contracts used to detail the agreement between brands and famous figures like celebrities and sports figures to represent a brand. The success in endorsement contracts come from positive activity from the figures representing the brand in Cameroon. An endorsement is equally a deal, whereby a company will pay an individual for their brand to be associated with that individual. Therefore, the integrity in the actions of the sporting star on and off the pitch illustrates how good it will be for a business to associate their brand with the person. The business will therefore pay that individual for them to endorse their product.
There are two types of endorsement contracts; the sports endorsement contract and the celebrity endorsements.
A. What is a morals clause in an endorsement contract?
These are clauses aimed at prohibiting certain behavior in the personal and professional life of the endorser. This clause deals with objectionable behavior such as drug abuse, scandals, public disrepute, etc. if the morals clause is violated, it may result in the following;
- Suspension of the contract
- Termination of the contract
- Payment of damages for breach
- Financial penalty without contract termination.
B. SPORTS ENDORSEMENT CONTRACTS
These contracts cover several areas, which span from public appearance, exclusivity and compensation clauses.
- Exclusivity Clause: This has to do with how the image and name of the athlete will be used for marketing and promotion purposes exclusively. Hence, this clause prohibits athletes from partnering with other similar brands or competitors.
- Public Appearance Clause: This clause outlines how, when, and for how much money a star athlete will publicly promote a product. Hence, it states the appearances the athlete will make, the time the athlete must be present at the public appearance and the amount paid for the public appearance.
- Compensation clause: This clause details the form of compensation, the base compensation for endorsement of a product and the bonus compensation.
C. WHAT TO CONSIDER IN SIGNING A SPORTS ENDORSEMENT DEAL
- Review the morality clause in order to understand the required actions and violations.
- Verify the indemnity clause against the actions of others in the deal.
- Ensure you understand the compensation plan, which includes the various payments such as fixed fees, royalties and additional incentives.
- Identify the specific information touching on public and personal appearance, when the product should be worn.
- Solicit the services of an attorney in view to see if there could be competitive endorsements.
D. CELEBRITY ENDORSEMENTS
It is important that the celebrity live in line with the brand’s values so that he avoids penalties of bad behavior that could negatively affect the company’s image. Celebrity endorsements are extremely successful and are used frequently to promote brands. These endorsement are also illustrated on social media platforms of celebrities. Celebrity endorsements need to be well drafted and should cover the following aspects;
- Exclusivity clause: This clause is to ensure that the celebrity will not wear, promote or use competitor products.
- Trademark and Intellectual Property clause: This clause refer to how the name and image of the celebrity are used, and who has control over the trademark and intellectual property rights at the end of the endorsement contract.
- Mitigation Clause: This is a damage control clause aimed at controlling the damage caused by the inappropriate action of the celebrity.
- Termination rights: Concerning the actions of the celebrity, which are detrimental to his/her, image.