To properly run a successful business and build a strong brand, fashion companies need to enter into many agreements that span the areas of corporate, real estate and intellectual property. This article provides some important factors to consider when drafting favorable provisions within three agreements commonly made by fashion companies.
Moral Clauses in Celebrity Endorsement Agreements
First, fashion companies typically enter into celebrity endorsement agreements under which a celebrity agrees to endorse and promote a fashion company’s products or services. These deals carry a significant amount of risk, as famous people and their behavior are closely monitored by image-hungry paparazzi and internet trolls. To protect themselves and their carefully crafted brand identities, fashion companies should include explicit moral clauses in their celebrity endorsement agreements.
A moral clause is a provision that prohibits certain behaviors in relation to the celebrity’s private life. These clauses tend to deal with questionable behavior, such as sexual acts, drug use, and crime. They are commonly used in the contract between actors / actresses and film studios to support the public image the studio wants to portray. Valery Piedra and Emilio Nicolas wrote an excellent article on moral clauses here.
When drafting a moral clause, it is important to consider the following factors:
- What is the celebrity’s background and reputation? Did a background check reveal any issues of concern?
- Is the object of the approval such that a certain type of scandal can adversely affect the success of the approval?
- What “bad acts” will trigger the clause? Should the list be specific or broad?
- Who decides if the clause is in effect?
- Does the clause trigger when an act becomes public or does it apply only to an act committed during the term of the agreement?
- Does the clause extend to acts committed by people closely related to celebrity?
- What is the desired remedy?
- Is the moral clause reciprocal?
Co-location clauses in retail leases
Second, fashion companies want to enter into retail leases that allow them to be nimble, agile, and orientate themselves with customer behavior. For these reasons, fashion companies should negotiate co-location clauses in their retail leases with owners.
A co-location clause provides the fashion company with a remedy in the event of loss of consumer traffic related to changes in the mall and protects the fashion company by ensuring that the mall remains busy and attracts consumer traffic to the benefit. of sales.
When drafting a co-location clause, it is important to consider the following factors:
- What types of businesses in the mall are most important to the tenant?
- How and by whom is co-tenancy failure triggered?
- What rights are granted to the tenant upon the occurrence of a co-location violation? Is it the right of termination, alternative rent payment and / or withdrawal?
Account Ownership Clauses in Social Media Usage Agreements
Finally, fashion companies typically enter into social media usage agreements with employees in charge of managing the company’s social media accounts. It’s important to clarify with these employees because social media is vital to the fashion company’s advertising, brand recognition, customer service, customer engagement, and promotions / contests. In order to avoid any dispute over ownership of social media accounts, account ownership clauses should be included in social media usage agreements.
An account ownership clause provides explicit language as to whether the accounts ultimately belong to the fashion company. When drafting an account ownership clause, it is important to also consider the following factors:
- If, when and how can I change the password for social media accounts?
- Which people in the fashion company should always have access to login information for social media accounts?
- After an employee’s separation from the fashion company, how and when should the social media accounts be switched to the new employee?
Considering the answers to these factors will help you draft favorable arrangements for fashion companies that are best suited to your client’s needs and concerns.