Understanding Influencer Marketing Contracts

Have you ever tried to read a contract but gave up halfway through because the legal jargon was too much to decipher? Below we’ve explained the key points of an influencer marketing contract to help influencers gain a deeper understanding of the major elements in the contracts, and (hopefully) make the next contract read-through a breeze!

Compensation

This section outlines the rate that influencers will be paid for their services, and whether the compensation will be a flat fee, commission-based, free or gifted product(s), or any combination of these. The form and amount of payment will also be detailed in the Compensation clause so influencers can be assured that they are receiving the agreed-upon payment for their services.

Deliverables

The Deliverables section specifies the work the influencer will do in exchange for the compensation they are receiving from the brand. Creating sponsored content, attending a brand event, participating in the creation of user-generated content (UGC), or any other work agreed upon by the influencer and the brand. Detailed deliverables ensure that all parties are aligned on what will be expected out of the influencer by the end of the collaboration.

Termination

While brands and influencers enter into a partnership with positive intentions, unplanned circumstances may necessitate early termination of the partnership, and the Termination Clause states the conditions under which either or a specific party can end the agreement before the partnership is completed. Reasons for termination can include breach of contract, without cause, or other incidents to protect the interests of both the brand and the influencer.

Confidentiality and Exclusivity

Influencer marketing can involve private information about upcoming product launches, marketing strategies, and other information not yet readily available to the public. The Confidentiality Clause protects the brand’s sensitive information from unauthorized disclosure by the influencer and outlines the repercussions for any breaches of confidentiality by the influencer. 

The Exclusivity Clause prevents influencers from promoting competing brands during the term of the partnership or contract. This is intended to retain brand integrity but can also benefit the influencer from appearing disingenuous by recommending or promoting competing brands in a short period of time. It is vital for influencers to be familiar with the terms of both of these clauses before signing the contract, as there can be legal consequences for not adhering to the brand’s conditions for these sections.

Material Disclosures and Compliance with FTC Guidelines

As their name implies, influencers have considerable influence over their followers, which is why authenticity and trust are so important to audiences. The Material Disclosures clause states that influencers must explicitly disclose to their audience any financial partnership with a brand. Compliance with Federal Trade Commission (FTC) guidelines regarding sponsored content and endorsements is non-negotiable and outlined in influencer contracts to ensure influencers are aware of what is required of them by the FTC in the course of the brand partnership.  As discussed in our article How the New FTC Guidelines Affect Creators, improper disclosure or no disclosure of sponsored content is a crime, with penalties including lawsuits, flagged accounts, and significant fines.

Payment Terms

Many influencers rely on the payments they receive from brand partnerships as their sole source of income so timely payment on behalf of the brands is essential. The Payment Terms section outlines the method of payment and when the payment will be made, so influencers can hold brands accountable for on-time payments and know when to expect payment before entering into a partnership with the brand.

Independent Contractor

Influencers are typically considered independent contractors (as opposed to employees), which has legal and tax implications for the influencer. The Independent Contractor clause clarifies the relationship between the brand and the influencer and states that the influencer is responsible for their own taxes, insurance, etc. This clause effectively absolves the brand of any obligations a company would cover for a traditional employee.

Campaign Details

The Campaign Details clause provides in-depth, extremely specific details required by the brand for the influencer to follow during the content creation process, brand event, or whatever the scope of work entails. This section includes the campaign objectives, content timelines, required hashtags, tags, and links; brand, visual, audio, and content guidelines; usage rights, approved concepts, metrics requirements, and any other details needed for the influencer to achieve the brand’s desired outcome.

Every successful brand/influencer collaboration begins with an intentionally crafted contract that outlines the terms and conditions of the partnership, from compensation to campaign details and acts as the foundation of successful brand/influencer collaborations. By outlining important aspects of the campaign and understanding the various clauses within a contract, both brands and influencers can build mutually beneficial and long-term partnerships.

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