A Brief Introduction About the Brand Ambassador Contract
A brand ambassador contract is one of the most frequently entered contracts in the world of marketing. It is an agreement that decides the compensation paid to the brand ambassador by a company and the product which the person has to endorse, along with the terms and conditions that are to be fulfilled by both parties to the contract during its duration.
What Is a Brand Ambassador?
How do we define a brand ambassador? A brand ambassador is hired by a company or an organization to promote its image, which directly contributes to increasing brand awareness and impacting sales. The brand ambassador is conventionally an influential, famous person who has a large fan following. With changing times, anyone who represents a brand is termed as a brand ambassador.
What does a brand ambassador do? Brand ambassadors create publicity that boosts a brand’s image. They also use a plethora of communication and interaction tools like social media platforms to increase the brand’s reach.
Who Takes the Brand Ambassador Contract
The agreement is entered into by an individual and an organization or a company. The organization or company would be looking to increase awareness of their brands as a part of their marketing campaign. Sometimes, two companies enter into a brand ambassador contract with one company hiring the other as a brand ambassador and to create publicity for a brand’s products.
Purpose of the Brand Ambassador Contract
Also known as influencer contract, the brand ambassador agreement serves the following purposes:
- It highlights the duties and rights of the brand or company.
- It outlines the rights and obligations of the brand ambassador.
- It lists down the compensation that is to be paid by the company to the individual.
- It is a record of what was agreed upon between two parties.
- It serves as a reference for future disputes.
- It protects the individual from being hired as a brand ambassador and to the company doing so, in case a breach of contract occurs.
Contents of the Brand Ambassador Contract
A brand ambassador agreement contains the most important terms that govern the professional relationship between the two parties that arises as a result of signing the agreement. It must contain:
- The names and details, including the communication details of the parties to the contract.
- The term of the contract, including the date of execution and the date of performance.
- The details of the brand(s) that need to promote.
- The details of the products by the brand that has to be promoted by the brand ambassador.
- How the brand ambassador shall promote the products (for example, through radio, television, social media platforms, etc.) Along with other details (like frequency) that are related to the promotion.
- A clause about the ownership of the content that is produced as a result of the agreement; whether the company can sub-license the same content to the partners of the brand.
- A clause about licensing – the company granting a license to the ambassador to use their name and vice versa.
- A clause about compensation to be paid to the influencer and the payment schedule, including the mode of payment.
- A disclosure clause where the company is required to disclose to the ambassador where and how the ambassador’s name will be used.
How to Draft the Brand Ambassador Contract
Once you have decided that your company needs a brand ambassador, drafting a brand ambassador contract is a must. These are some points that can be kept in mind while drafting a brand ambassador agreement. They can help in drafting a better and strong agreement.
- The agreement must be written in a simple and clear language.
- Avoid the use of vague and ambiguous terms that can have multiple meanings.
- Define complex legal terms at the beginning of the agreement.
- Include the boilerplate legal clauses like the clauses of severability, force majeure, entire agreement, indemnity, etc.
- If the brand ambassador is required to post something on social media, a clause can be included that states that after what period can the ambassador delete the posts that were created as a result of the promotion. Often people don’t want their social media handles to look like a billboard of advertisements and remain authentic for their fans, which is why this clause is essential and widely found.
- If the ambassador is required to represent a product that is to be drunk or ingested, cover all bases. Mention what happens when the ambassador falls sick due to such ingestion and who will bear responsibility for the same.
- Mention how the contract can be terminated.
- Insert a clause of exclusivity that makes sure that the ambassador doesn’t simultaneously promote a brand’s competitor.
- A clause of the approval process, if the brand needs to approve the content that the influencer/brand ambassador uses.
- A clause of confidentiality that bounds both the parties to keep everything discussed and the material shared a secret.
- Mention the governing law of the contract.
- Compliance with FTC/ASA policies, declaring that the post is paid or an ad.
- Mention the place of dispute resolution and the alternate dispute resolution method that can be used in case of a dispute like arbitration, mediation, etc.
In case of a brand ambassador contract, there are a lot of areas where negotiation can help, including:
- Compensation: Deciding how much money should be paid is always subject to negotiation. When both parties are satisfied with the amount mentioned in the agreement, only the agreement should be signed. Many times, brands expect the ambassador to promote their products in exchange for free goods instead of monetary compensation.
- Rights: Who owns the intellectual property produced directly as a result of the agreement? This is where rounds of negotiation can help.
- Inclusions: What all is the brand ambassador expected to in the compensation offered? Does it also include event attendance? Sitting and discussing this can help in creating a win-win situation.
Benefits & Drawbacks of the Brand Ambassador Contract
Here are the benefits of a brand ambassador agreement:
- It binds both parties to a pre-agreed standard.
- It serves as a record of what was agreed upon.
- It adds a degree of professionalism and formality to the relationship between the brand and an individual.
- It is enforceable in courts of law.
- It protects both parties in case of a breach.
- It creates a clear understanding, without any scope for misinterpretation.
- It builds credibility and adds legitimacy for a brand.
Here are the drawbacks of the contract:
- It is not easy to draft and involves complex legal terms that may be misinterpreted.
- It may involve requiring the services of a professional lawyer that can be expensive.
- Drafting a contract that is agreeable to both parties is a time-consuming process and is not a great idea, especially when equal time money for many brands.
- A brand ambassador’s personal flaws or scandals can affect the image of the company and vice versa.
- It decreases flexibility.
- It creates additional administrative work.
[Also Read: Ambassador Terms and Conditions Agreement ]
What Happens in Case of a Violation of Brand Ambassador Contract?
When the brand ambassador contract is violated, it constitutes a breach of contract(1). The place and method of dispute resolution shall be according to the agreement. The remedies of a breach of contract like restitution, specific performance, etc. are available to the injured party in addition to claiming monetary damages. It can be violated in multiple ways like non-payment of compensation, advertising for a competitor, unauthorized use of the content, etc.
With the change in marketing strategies, a brand ambassador contract has also changed. These days, there is a lot of demand for influencers who have a great social media presence. Social media is the new way to advertise, for which the brand ambassador contracts are tailored. Having an agreement ensures that there is no misunderstanding, and both parties are legally bound to carry out their duties as listed down in the contract.
If you are finding it challenging to draft a brand ambassador agreement, it is advisable to hire an attorney or refer to a template available online. A template can serve as a guiding light and can be customized as per your needs.