Social Media Influencers
Social media influencers are killing it these days. The highest paid influencers can earn up to one million dollars for a single post! If people aspire to earn a living as an influencer (or perhaps just make some cash on the side), it may be exciting to receive an offer from a company who wants them to promote their products – typically in the form of a contract known as an influencer agreement. However, there are some things they should keep in mind before signing on the dotted line.
This blog discusses 10 common legal considerations that arise in an influencer contract. We got in touch with the founder of MODERNSPEAK Kristyn Snell who shared some valuable tips based on her experience running an influencer management agency. The blog post does not discuss what an influencer’s followers might think about their vegan cooking brand if they decide to promote a new line of beef hotdogs.
First, a couple preliminaries about influencer contracts: this contract may or may not be with the sponsor directly. Influencer contracts are often signed with marketing companies hired by the sponsor to promote the sponsor’s brand, and they would in turn engage an influencer.
Components of an Influencer Contract
If an influencer is presented with a contract for an influencer marketing campaign, there will generally be two parts: the terms and conditions and a statement of work (“SOW”). The terms and conditions usually contain the sponsor’s standard contractual terms and may or may not be negotiable. The SOW describes the specific nature of the engagement as an influencer promoting a sponsor.
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Top Considerations Before Signing
Now, on to the main event. Below are ten common considerations to keep in mind when deciding whether to agree to an influencer partnership agreement:
If there’s an exclusivity requirement, there should be as much clarity as possible about the specific companies and/or brands that an influencer cannot promote, and for how long. Exclusivity requirements are generally considered by courts to be acceptable kinds of restrictions in a talent or influencer contracts, so long as the restrictions are reasonable, and the influencer is being paid enough.
Kristyn Snell the founder of MODERNSPEAK influencer management agency says:
We can’t think about exclusivity without also considering usage. Usage refers to how a brand will be using the influencer content after it’s created. From organic social sharing to paid advertising and everything in between, one thing to consider when it comes to these two common clauses is the length of both terms. If an exclusivity term is 3 months, but a usage term is 6 months that could be implied exclusivity based on how the brand will be using the influencer’s likeness to promote the product for that extra term.
Speaking of being paid enough, how much will the influencer be paid? What’s the payment schedule? There should be clarity about what the influencer needs to do to get paid. If the influencer collects HST or another form of tax, they must be sure to ensure their fee is plus applicable taxes. They wouldn’t want to have to be in a situation where the fee includes any taxes owing.
Kristyn’s experience has taught her an important lesson when it comes to compensation and conversion fees. If a brand agrees to pay the equivalent of an influencer’s home currency fee in their currency, the influencer must be sure to protect themselves from potential fluctuation on that currency conversion, so they aren’t losing out on money when it comes time to get paid. And they should consider fighting for NET 30 payment as well as a portion of their fees upon signing of the contract.
An influencer’s image is their livelihood. While the sponsor should be given the right to use the influencer’s image for the campaign, they should make sure they are allowed to do all that they want to with the influencer’s image, so long as the influencer is not offside of the limited set of exclusivity obligations. Also, the influencer would want to have approval over which images and likenesses of themselves the sponsor is allowed to use for the campaign.
Under what conditions may an influencer be terminated? Sponsors often require the right to terminate “without cause” or for “convenience,” meaning the influencer may not have done anything wrong. In that case, how much will the influencer be paid for what they’ve done so far? What about for their troubles generally? Maybe it’s not enough.
Also, sponsors are more sensitive than ever to what might be mined from the past 15 years of an influencer’s social media posts. In addition to doing their diligence on an influencer, a sponsor will often include a morals clause in an influencer contract that allows for their termination and/or damages should they be convicted of a crime, or if some other unsavoury information comes to light.
Kristyn Snell: Consider also including a reverse morals clause where an influencer may terminate the relationship with the brand if they are also found to be in moral conflict and the influencer, being tied to the brand, could be damaging to their reputation. It’s also a good idea to add a Kill Fee to an influencer contracts so if a brand does decide to terminate the contract before all the deliverables are completed an influencer can be paid for the work that has been done.
5. Sponsored Posts
What are the requirements about how an influencer identifies their relationship with their sponsor? They must be sure to be on the same page.
The influencer must sure there is clarity about the approval process, so that they are not later told the agreement is terminated because they didn’t get approval for a video they’d already posted to Instagram or another social media platform.
If an influencer will be offside of their obligation for missing deadlines, are the deadlines clearly set in the agreement? Also, are they reasonable in the circumstances? How should deadlines automatically extend if an influencer is waiting for approvals? When it comes to setting the rates for an influencer marketing campaign, consider adding in a rush fee for any requests that are less than two weeks from contract to live dates.
8. The “Entire Agreement” Clause
If amendments to the contract need to be in writing, an influencer shouldn’t rely on a phone call letting them know the deadline to deliver was extended. The influencer must ensure the agreement clarifies how changes can be made, and they must ensure they follow the steps when there are changes to the arrangement.
9. Content Ownership
If there’s any reason why the sponsor shouldn’t own all the influencer’s content being made for the campaign, ensure the appropriate arrangement for all intellectual property is clearly outlined in the influencer contract. Regardless of copyright ownership, for how long can the sponsor use the content?
10. Scope of Deliverables
The influencer should ensure that the SOW clearly defines what they need to deliver. They will want to avoid “scope creep,” which happens when there are open-ended obligations to deliver content, and the influencer is continuously asked to deliver more (well beyond what they expected) for no additional compensation. Clarity between the influencer and the sponsor regarding their influencer marketing campaigns obligations will help lead to a healthier relationship, whether an influencer is promoting a skin cream or anything else under the sun.
Working with an Entertainment Lawyer
If you need help to review your influencer contract, or draft an influencer contract template, please get in touch. We work with influencers to ensure their rights are protected and they clearly understand their obligations. We also work with managers and agents to help review the influencer contracts their clients are offered, and answer any related legal questions.
About Our Co-blogger
With over ten year’s experience in public relations and influencer marketing, Kristyn founded MODERNSPEAK, a global creator management agency in 2019. Kristyn is most creative when surrounded by people, collaborating, mentoring and bridging opportunities between creatives, consumer brands and tourism destinations. When her dream job didn’t exist, she created it.
© 2022 Edwards Creative Law, LLP
Updated to September 20, 2022
Edwards Creative Law is Canada’s Entertainment Law Boutique™, providing legal services to Canadians, and international clients who partner with Canadians, in the Film & Television, Music, Video Games and Apps, Publishing and Literary industries.
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* This blog is for general informational purposes only and is not to be construed as legal advice. Please contact Edwards Creative Law or another lawyer, if you wish to apply these concepts to your specific circumstances.
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