Legal Pitfalls to Avoid in a Brand Ambassador Agreement

Having a brand ambassador agreement is a smart idea for all creators! For those of you who may not know, a brand ambassador agreement is a legally binding contract between a creator (otherwise known as an “ambassador”) and a brand or company that hired the ambassador to promote its products or services. It is important to outline the terms of this working relationship in writing to avoid legal troubles down the road.

This blog will highlight common legal pitfalls that brands and ambassadors should avoid when entering into a brand ambassador agreement, including issues such surrounding exclusivity clauses, payment terms, and social media disclosures.

  1. Failure to disclose required information: Ambassadors can land themselves in big trouble for not complying with the Federal Trade Commission’s (FTC) social media disclosure requirements. Among other things, the ambassador must disclose their relationship with the brand and any financial, personal, employment, or family connection with that brand. Disclosures must be made in a way that is hard for consumers to miss. This most notably occurs when brands send an ambassador free products in exchange for the ambassador promoting the product. Failure to disclose required information can result in fines or lawsuits against the ambassador.
  2. Not including key provisions: There are certain provisions that are essential to include in a brand ambassador agreement. These include compensation, duration of the agreement, duties of the ambassador, and any exclusivity clauses.
    • Define the scope of work - Ambassadors should know exactly what the brand hired them to do and what behaviors fall outside the scope of the agreement. For example, if a brand hires an ambassador to promote their hairdryer, it is unlikely the brand has any say in the ambassador’s posts about her outfit for the day.
    • Exclusivity - Related to the scope of work is an exclusivity clause. This is important because it states exactly what products the agreement covers and for how long the ambassador can only work exclusively with that brand.
    • Compensation - This clause lets the ambassador and brand agree upon some form of compensation for the promotion. Common examples include a flat fee, commission, free products, or some combination. This provision is also a good place to note any performance bonuses the ambassador may receive.
    • Term - Defining the term of the agreement gives both parties transparency in how long the deal lasts. Many brands typically make the term 6 months to 1 year.
    • Termination - This provision should highlight circumstances in which either party can terminate the agreement. Skilled drafters will include a notice period and whether there will be any consequences to a party for terminating early.
  3. Forgetting to address intellectual property rights: Many brands often have trademarked or copyrighted content such as their logos, which they will want the ambassador to use in promotions. It is a smart idea to specify in the agreement whether the ambassador will be given a license to use the brand’s content, how the ambassador can use the brand’s IP, and whether the ambassador can create new content with the brand’s IP.
  4. Not clarifying ambiguous terms: Agreements that use vague or ambiguous language can result in confusion and disputes. These misunderstandings may range from small and relatively harmless to much more serious uncertainty about major responsibilities. This can be resolved by clearly defining important terms in the agreement and using precise language to minimize the risk of misinterpretation.
  5. Signing a non-compete clause: These clauses can restrict the type of work an ambassador can do. Brands may want to limit the ambassador to only promote their products or services and none of any competitors. Read these clauses carefully because some brands may try to make this clause out live the duration of the relationship, meaning the ambassador won’t be able to promote a competitor’s products even after their deal with the original brand is completed.

Venustas Law can help you understand, draft, or negotiate terms in your Brand Ambassador Agreement. Don’t hesitate to contact us for more information.

← Older Post Newer Post →

Leave a comment

venustas Law

Contact Us Today