This is a 2 part post…
PART 1 covers the basics of how you construct a binding contract
PART 2 covers 10 common sections to add in an Influencer contract.
You need contracts to cover your bases!
It’s best practice to get any agreement regarding your influencer marketing relationship or distribution channel in writing….
First, contracts are something you need to become accustomed to. They provide peace of mind that your transactions or deals follow a predefined agreement that you can rely on. This ensures that any issues or disputes can be resolved because what you agreed on is in black and white in a signed contract.
Disclaimer: These guidelines are intended to be used for information purposes only and do not constitute professional legal advice. Please consult independent legal advice for information specific to your country, your business, and your circumstances.
A word of warning. It’s one thing to hold another entity accountable for something, but just remember that a contract is signed by both parties. You must make sure you uphold your end of the agreement. Otherwise you will be the one who is in breach!
If that happens, the tables can turn and the other party can hold you liable for damages.
Ok, so In a nutshell, there are six requirements for creating a valid contract:
- Offer – what’s on the table, what are you offering?
This part is pretty straightforward. Establish whether a valid offer has been made. What is being transacted must be very clearly explained in a set of terms and conditions.
This basically determines what either party will do or not do after signing the contract. In the case of influencer marketing or with working with a distribution partner, this is where you would offer to pay a certain fee when the other party sells/distributes your product or service.
Be mindful that if the offer is not clear, then the contract may not be specific enough for a court to enforce.
- Acceptance – are they in agreement with your offer?
This is also pretty straightforward. The other parties need to agree to the conditions of the offer. Confirm that they legally accept the offer and agree to the terms and conditions of the transactions.
By the way, they cannot be under duress, which means it isn’t valid if they are coerced into signing the deal. No mafia moves, please! But seriously, the parties must agree to the contract without outside factors influencing the acceptance of the offer.
- Legal intent – do both parties agree to be bound by the contract?
Legal intent is where you need to ensure that both parties have the intention of being bound by the contract. This is whether the person acknowledges that they intend to perform their obligation under the contract and understand that legal action may occur if they breach the terms and conditions of the agreement.
- Competency – do both parties know what they are doing?
Competency means both parties need to be of sound mind and have the legal capacity to enter into a contract. For example, it’s probably a bad idea to have a minor sign a contract.
The person signing the contract must also have the mental capacity to understand what they are signing and are not impaired at the time of signing. So basically, they can’t be drunk, use other mind-altering substances, or have a mental or age-related disability that can impair their judgment.
- Consideration – do you agree on who gains what?
Consideration essentially means the exchange of value or promise of something of value. It’s the ‘payment’ for what is performed against the contract. By the way, this can also mean that you or the other party promise not to do something after they sign the contract. It is the value to be had, which can be anything like money, knowledge, goods, or services. If there is no exchange, there is nothing to enforce, so no need for a contract, right?
- Legal purpose – as long as it’s legal, it’s binding.
Legal purpose means the contract can only be enforced for legal transactions. Basically, you can’t have an enforceable contract with your distribution partners if what you are distributing is an illegal substance. The law cannot be used to enforce unlawful activities, so make sure you are not breaking the law.
That should give you a real grasp of what makes a contract. In PART 2 of this blog I’m going to share 10 common sections of influencer contracts.