Morals clauses are often placed in endorsement contracts in order to protect a company’s reputation from celebrities’ outrageous lifestyles, allowing the company to cancel an endorsement deal if talent undertakes certain negative conduct. First hitting movie studies, these clauses were attractive to protect the studio’s image from the negative publicity that talent received because of their personal lives (think of Universal Studio’s dismay when actress Gladys Walton began dating Al Capone!).
Since early Hollywood, morals clauses faded into boilerplate contractual language that most people overlooked when signing agreements. With today’s spike in celebrity scandals, however, morals clauses are making a comeback and becoming an important negotiating point – thanks Tiger Woods!
Companies want celebrities to behave, and celebrities want to…well they just want to do whatever they want. But companies aren’t the only parties to an endorsement deal that wants protection. Reverse morals clauses – where talent is protected from a company’s wrongdoing – is also becoming more desirable.
Even though morals – and reverse morals – clauses are an important concern for multi-billion dollar companies and A-list celebrities, are these clauses a necessary consideration for artists, actors, small businesses, etc.?
The digital age has provided everyone the opportunity to create their own personal brand, and it allows anyone with internet access to discover this brand. Because of this, widespread humiliation from being portrayed negatively is no longer exclusive to the “It” crowd.
An aspiring singer with an amateur sex tape can easily ruin his or her chances of making it big, and can just as easily hurt the career of the talent agent trying to book that singer on a major tour while damaging the image of the start-up clothing company that used that singer in its upcoming lookbook. Likewise, a company caught defrauding clients can cause detrimental effects for the up-in-coming actress in the company’s commercials and for the songwriters who just licensed their prize-winning song for use in the company’s latest campaign.
Although morals clauses are generally mentioned with regards to the rich and famous, they do have practicality in the lives of the lesser known. It is important to create an attractive brand, but it is just as important to protect that brand.
If you have questions about morals clauses, or whether you should include one in your business and/or musical relationships, please contact a licensed attorney.