Disclaimer: This information is made available for educational purposes.  It provides general information and is not intended to provide specific legal advice. This information should not be used as a substitute for competent legal advice from a licensed attorney in your jurisdiction.

Hey there, content creators! As you dive into collaborations with brands, it’s crucial to understand the ins and outs of contracts. In this article, we’ll explore red flags in contracts, helping you spot potential issues and protect your interests.

Breaking Down Contracts

First things first, let’s get familiar with contracts. Think of them as official agreements between you and a brand. Contracts outline the terms, conditions, and expectations of your collaboration. It’s essential to review and understand them thoroughly before signing anything.

And yes, you need a written contract (read why). I know, it can be a pain, but trust me on this one.

Red Flags to Look Out for in Contracts for Content Creators

Unfavorable Compensation and Payment Terms

Beware of low or unfair payment rates that undervalue your hard work. Also, keep an eye out for delayed or inconsistent payment schedules. Contracts should clearly state how and when you’ll get paid, so don’t settle for ambiguity.

Use our calculator to price your content

Excessive Licensing and Usage Rights

Be cautious of contracts that give brands unlimited control over your content without proper compensation. Ensure that you have some say in how your content is used and distributed. Avoid vague clauses that grant brands unregulated access to your work.

Some words to look out for here are:

• Perpetuity: this means forever. You should only agree to this when you understand exactly what you’re giving up forever, and you’ve been properly compensated for it.
• Exclusive: depending on how it’s worded, this usually means either only the brand has rights to the content or that you can’t work with other brands in the industry (for a period of time or potentially forever).

Also, look out for a long, vague list of everywhere the brand can use your content going forward. Here’s an example of a problematic clause:

Creator grants Company a non-exclusive, royalty-free, worldwide, digital license to utilize the Deliverables in any manner in any digital form, including but not limited to the right to edit, alter, delete, modify or change, in Company’s sole discretion in connection with the continued promotion of the Platform, or as otherwise permitted by this Agreement.

If the price you’ve agreed upon is based on 1 Instagram post and 3 Instagram Stories, then you don’t want to then grant them the right to use your content in other ways, such as on their social media, in ad campaigns, marketing materials, etc. For that, you’d want to negotiate a much higher fee.

That’s why it’s important to make sure the contract lists exactly how, where and when they’ll be allowed to use your content. Should they wish to use it beyond those specific channels and timelines, they can come back and offer you additional compensation for those rights.

Agreeing to be Exclusive

Keep an eye out for unfair restrictions that prevent you from working with competitor brands. Exclusivity contracts aren’t automatically a red flag. It’s common in these types of marketing contracts to ask you not to work with their competitors for a period of time, maybe 30 days or even six months.

Here’s what one looks like:

It is understood that the Influencer will be working for the Advertiser on an exclusive basis for the duration of this Contract. It is prohibited that the Influencer post, promote, or be affiliated with any other advertiser in the following type(s) of business: beauty, personal and hair care products; makeup. 

Here’s how it might play out for you: Clearly Cleanser (I’m making up a company) is willing to pay you $500 for one Instagram post, but you’re not allowed to work with anyone else in the beauty/makeup industry for six months. Two weeks later, Beautiful Face offers you $1,000 for an Instagram post. You like their products better, plus they’ve offered you more money. Unfortunately, you can’t take it if you agreed to the exclusivity clause in the first contract with Clearly Cleanser. 

If you agree to an exclusivity clause, the term should be clearly defined so you know exactly when you’re free to work with others in their space. I also try to ask for a list of specific competitors instead of broad categories (like they used in the example above) so there’s no confusion about who I can and cannot work with. You should also be getting paid more for exclusivity than if there was no exclusivity clause because it means you may have to turn down other offers that conflict during the term.

Ambiguous Deliverables and Expectations

Watch out for contracts that lack clear project briefs, deadlines, and milestones. Vagueness in expectations can lead to confusion and unnecessary revisions later on. It’s important to have a mutual understanding of what is expected from both parties.

Two things I like to look for in my contracts with brands/sponsors:

• “Sole discretion”: this usually gives the brand the right to approve the final deliverable. Obviously, they need to approve it. However, this term often gives them a good “out” if they want to just bail on the contract entirely. That’s why I always try to get a “kill fee,” or a fee I’ll be paid regardless of whether they ultimately use my content or not. It tends to range anywhere from 10-50%, but it’s better than getting nothing for your work!
• Limit on edits: I always negotiate for a limit on the number of edits the brand can ask for, otherwise you could end up reshooting or recreating content a dozen times or more. Most creators don’t contemplate this many edits when they set the price for the deal. Limit the number of edits, and then if you and the brand still aren’t on the same page, you can renegotiate or accept the kill fee (see above).

Edits

Beware giving the brand the right to edit or modify your content after creation. I once heard about a creator who posed for a photo shoot in a white t-shirt only to find out later the brand added a Confederate flag on the t-shirt. The creator said she wouldn’t have agreed to wear a shirt with the Confederate flag, and other brands who worked with her canceled their contracts.

This is the sort of language to watch out for:

the right to edit, alter, delete, modify or change, in Company’s sole discretion 

Unreasonable Termination Clauses

The biggest issue I see in creator contracts is one-sided termination clauses, meaning the brand can terminate but there is no defined process by which the creator can terminate if they decide they no longer want to work with the brand. What if the brand ends up in a big scandal you don’t want to be associated with? Or maybe the person you’re working with on the campaign is abusive in some way. You need a reasonable way to get out of the contract.

Termination clauses should allow either to terminate, and you should try and get a kill fee negotiated into the contract if they terminate (see above). 

Use of School Logos, Colors or Facilities

If a contract demands the use of school logos, colors, uniforms or facilities, the brand needs to negotiate that with the school. You can put them in touch with the right person, but all rules need to be followed, and the brand should pay any fees associated with the use.

Indemnification and Liability

Pay attention to contracts that burden you with excessive legal and financial responsibilities. Indemnification refers to the act of compensating someone for any losses, damages, or liabilities they may incur. If the contract says you are indemnifying them, you need to understand exactly what you might be liable for in the future. (Honestly, this should scare you enough to get an attorney to review/negotiate it for you.)

Ensure that both parties share the responsibility for any infringement of intellectual property (which refers to creations of the mind, such as artistic works, inventions, and brand logos). You should aim for a fair allocation of risk between you and the brand.

One-Sided Contract Terms or Negotiations

Be cautious if you find yourself in a situation where the brand holds all the negotiation power. Contracts should provide a fair playing field for both parties. Don’t hesitate to speak up and negotiate terms that protect your rights and value as a content creator.

If a brand says, “take it or leave it,” when they make you an offer, you should probably leave it.

Tips for Negotiating and Protecting Content Creators’ Rights

Thoroughly review and understand the contract

Take the time to read and comprehend every section of the contract. If something is unclear, ask for clarification before signing. Knowledge is power!

Seek legal advice if necessary

If you encounter complex or confusing terms, consider consulting an experienced lawyer. Your first consult with many NIL attorneys is even free. They can help you navigate the legal jargon and ensure your rights are protected.

Negotiate for fair compensation, rights, and protections

Remember that contracts are negotiable. Don’t be afraid to discuss terms that concern you. Aim for fair compensation, reasonable usage rights, and protections that safeguard your work.

Document all communications and agreements

Keep a record of all discussions, emails, and agreements related to the contract. This documentation can come in handy if any disputes arise in the future.

As a content creator, it’s crucial to be aware of potential red flags in contracts. By recognizing these warning signs, you can protect your rights, ensure fair compensation, and maintain creative freedom. Stay vigilant, seek advice when needed, and don’t hesitate to negotiate for terms that work in your favor. Your work has value, so never settle for less!