This article has been written by Tanisha Das, pursuing a Diploma in Advanced Contract Drafting, Negotiation and Dispute Resolution from LawSikho.
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Gone are those days when the only method to recognise a brand was either through a television advertisement or a pamphlet in the daily newspaper. Brands have now accepted the enormous reach of any content on social media and the impact it has on viewers. This has brought to action the role of a social media influencer. They are essentially individuals who are engaged in creating a link between the brand and a customer. The role of influencers is not just limited to endorsing but to various other activities like reviewing products, generating exciting content to build trust with the brand. In this article, we shall look into a few important clauses that every drafter must put in an influencer marketing agreement to make sure the interests of the parties are safeguarded.
5 important components of an Influencer Marketing Agreement
The agreement is between an influencer and the brand who wishes to collaborate. Since the work of an influencer is largely on social media, the terms of this agreement revolved typically around social media activity. This segment of the article shall exclusively deal with essential clauses that are required to put the agreement to force.
Terms of collaboration/scope of work
This clause must unequivocally state all the needs of the brand. It shall include an objective, in terms of, what exactly shall be the activity of the influencer. All the details of the activity say for example, the frequency of promotions or duration for which an influencer shall be hired. This is a very important clause to set things straight. Only when the influencer has the idea of the end goal of the brand, the content thus created shall be successful.
This clause can also include the exclusivity principle. At times influencers collaborate with several brands simultaneously. This can lead to repetition of content that might affect the brand image. To avoid this, a clause should be included to restrict the influencer to sign further marketing contracts with competitors during the course of the engagement.
Depending on the purpose, there can be branding strategies such as use of hashtags, specific appeal to a demographic population, use of logos etc. For instance, some brands may want photos to be posted on Instagram, or might need detailed IGTV videos. Additionally, there can be a requirement for a particular theme in terms of aesthetics like if it is a cosmetic brand, the overall promotion should be in line with the appeal of the product. These are really minuscule details but should be clearly set out in the branding guidelines clause to avoid disputes in future.
One of the key parts of this contract is meeting deadlines. Brands can mention the exact timelines for each of posts across platforms. A clause can be framed mentioning the number of posts that an influencer is required to make per week and can include a time that best suits them. A timeline clause ensures activity is carried out smoothly without any dispute. Another important addition in this clause can be metric calculations. To measure activity on a post, the influencer must submit engagement reports to the brands after the marketing is done with.
This clause shall include the monetary compensation that is due for the promotional activity. The payment structure is solely determined by the feasibility of the parties. It can be on a one-time payment basis after completion of the task or can be paid through instalments. However, some brands choose to send complimentary products instead of paying them. In this case, the value or the quantity of the product should be stated in the contract. A deferred payment clause must also be included here to timely task completion on the influencer’s part and rightful payment from the brand.
Ownership of content and confidentiality
This clause shall address who possesses the content rights. It is ideally the influencer with whom the rights lay since he is the ‘content creator’. However, sometimes the brands would want to retain these ownership rights so that they can use the content later; this intention shall be clearly set forth in the present clause along with suitable additional reimbursement. Another important factor to consider here would be confidentiality. The brand would want to keep utmost confidentiality regarding trade secrets or any other critical information. A clause can be framed attracting legal actions against the influencer if he/she breaches confidentiality. This can be agreed upon in detail in a follow-up Non-Disclosure Agreement.
Termination of contract
Under this clause, the events under which the contract shall be possibly terminated must be mentioned. A sample clause for the same can be:
The contract shall stand terminated owing to the occurrence of the below mentioned events:
- Failure by the Influencer to provide services mentioned under terms of collaboration;
- Active withdrawal of the influencer. In case the influencer withdraws from the performance of services under this contract without prior notice to the Company, he/she shall to pay 5% of the agreed payment;
- The influencer has shared personal information of the company;
- The influencer is convicted of felony or crimes of moral turpitude or;
- In the event of personal insolvency or bankruptcy.
Are promotions/advertisements by the influencers guided by any law?
At present, there are no legislations that specifically govern the actions of influencers. However, there have been active efforts from the government of India to fix the liability of the influencers. The Consumer Protection Act (“Act”) is a legislation of a kind that understands the drastic impact of misleading advertisements. The Consumer Protection Act, 2019 puts an influencer under liability of 10 lakh Rupees, if he/she is endorsing a product that is misleading or likely to harm the customers.
Following the global trends, proactive efforts have been taken by industry bodies like the Advertising Standard Council of India (“ASCI”) by issuing Guidelines for Influencer Advertising in Digital Media which self-regulates the authenticity of the claims being made in promotions by influencers. By issuing these guidelines, the authority is able to fix responsibility of disclosure of the content on influencers and prevent exploitation of customers.
As influencer marketing is ever evolving and has a certain impact on the life and choices of each individual, a brand must understand the importance of an influencer marketing agreement. A well drafted agreement will help the brands to protect their image, if the association with influencers goes haywire. Alternatively, clearly laid out clauses will be a bonus for all the influencers who are collaborating with a completely new entity. An influencer will promote the product/service of a particular brand irrespective of being aware of its pros and cons, it can create contention. This can only be solved if the objective and necessary terms of collaboration have been well defined. Therefore, one should always keep in mind the above discussed important clauses to draft an effective influencer marketing agreement.
Hereunder, I have attached a sample draft of an Influencer Marketing Agreement to analyse the many other vital components of the contract such as scope, compensation and other standard contract provisions. However, I would strongly advise consultation with a licensed attorney when drafting this Agreement. An attorney would be able to provide sound advice to ensure that a company complies with legal standards in force.
Influencer Marketing Contract
This Influencer Marketing Agreement (“Agreement”) dated on this____ day of ___ 2021 (“Effective Date”) is made between __________ (the “Advertiser/Company”) and _________ (the “Influencer”), herein collectively referred to as the “Parties” for the purpose of setting forth the exclusive terms of collaboration by which the company desires to avail marketing service from the Influencer.
- The Company, incorporated under the Companies Act of 2013, having registered office at New Delhi, is in the business of manufacturing ______ (“Product”).
- Company wishes to expand its reach and to be more visible in the market to catalogue the product that they provide;
- The Influencer is a resident of India at__________, bearing Aadhar No______ rendering promotional and advertising campaigns across social media platforms. (“Service”)
- The Company has approached the Influencer to develop marketing campaigns of their Product on different social media platforms. The Influencer agrees to provide promotional and marketing service, including the design and implementation of certain promotional campaigns across different social media platforms.
NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions set forth herein, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follow:
Scope of Work and Engagement of the Influencer
- The company appoints the above Influencer, and the Influencer agrees to perform for the Company certain advertising marketing services set forth in Exhibit A to this Agreement.
Note: (Under Exhibit A you will have to describe in detail the work you require from the Influencer. This shall include the nature of the content to be promoted like specific requirement of descriptive video, posts with a uniform hashtag etc.)
- The Company hereby appoints the Influencer as its representative on a non-exclusive, non-employee basis to endorse and promote its services to the target audience.
- The Influencer agrees to be engaged for the purpose of promoting the brand content and to be bound by the guidelines as attached as Exhibit B.
Note: (Under Exhibit B, you will have to insert branding guidelines including desired aesthetic, colour, font, or other creative direction. The Exhibit can also include what to avoid in the posts, such as, inappropriate language, content promoting racial discrimination, hatred and may others as per requirement).
- In exchange for the full and satisfactory performance of all Services to be rendered to the Company, the Influencer shall be compensated __________ INR. Payment can be made by cheque to the address given by the Influencer.
- The Influencer shall use his/her own resource and equipment’s and will be compensated additionally after furnishing the bills for the same.
- If Influencer has obtained employees or agents, the Influencer shall be solely responsible for all costs associated with the agent.
- Influencer agrees that this payment shall be remitted within 7 days of the completion of the Service on a pre-specified date.
- Influencer agrees that this payment shall be the sole and entire compensation received and no other compensation of any form shall be due upon termination of the Agreement.
Confidentiality and Exclusivity
- The Influencer acknowledges that during the course of performance he/she may receive information of a confidential and proprietary nature to the Company. The Influencer agrees he/she will not disclose, communicate, copy or permit the disclosure of any such information.
- The Influencer’s obligation of confidentiality will survive the termination of this Agreement and stay in place indefinitely.
- The Influencer shall be bound by exclusivity and shall enter into other similar Agreements with other competitors, unless otherwise expressly agreed by both the parties.
Ownership of Content
- The Company will have full ownership in perpetuity, all rights in whatever kind and character and any intellectual property rights associated with video, photographs or texts of the uploaded content.
- Notwithstanding the foregoing, Influencer may delete posts from his/her owned and /or controlled social media handles containing content after a period of 100 days from the post date.
- The influencer will deliver the agreed number of posts on the social media handles as per requirements under Exhibit-A.
- The Rejection and Approval of the posts lies with the Company exclusively. Company has a maximum of XX days to reject any deliverable and must notify the influencer within XX days of the receipt of such deliverable.
Dispute Resolution and Governing Law
- Parties to this Agreement shall first attempt to settle disputes through negotiation in good faith. If parties fail to settle disputes via negotiation, either party may initiate mediation as per law in force in India.
- The Agreement shall be construed in accordance with the applicable laws of India. The Courts of New Delhi shall have exclusive jurisdiction in any proceeding arising out of this agreement.
IN WITNESS WHEREOF, the undersigned have executed this Influencer Marketing Agreement effective as of the ___ day of ____ 2021.
Company’s Signature Influencer’s Signature
Contact Information Contact Information
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