3 Common Mistakes and Pitfalls with Contracts

One of the most intimidating parts of doing sponsorships can be receiving a complicated contract from a brand.

The language might be confusing, the document super long, and perhaps the brand is pressuring you to sign it on a quick timeline.

The following internal monologue is what usually happens for most people:

"I need to find a lawyer."

"I don't know any lawyers."

"Aren't lawyers expensive?"

"Meh, it's probably fine. I'll just sign it."

I get it.

Hiring a lawyer might eat all your profit, especially if the sponsorship isn't for much money.

Sure, everything might go fine. It probably will go fine the first few times.

But doing sponsorships without contracts is like petting a koala.

It's harmless until you get your face mauled.

An even more intimidating situation is when a brand asks you to send them a contract.

Especially when a brand is newer to doing sponsorships, they may look to you for guidance on memorializing the partnership.

My sincere advice is that one of the best investments you can make in yourself and your business is to hire a lawyer to create a boilerplate contract template for you.

The bulk of the contract will contain all the language that protects you (and will never change). The only page you touch for each deal is the Statement of Work at the end.

You'll simply fill out the SOW with all the deal points you agreed to on the phone with the brand or via email.

"But Justin, again, this deal isn't large enough to justify hiring a lawyer."

Imagine you wanted to start any other business. How about an ice cream shop?

There are lots of costs you would need to expend before you could sell a single ice cream cone.

Rent, labor, insurance, appliances, ingredients, and much more.

What are your costs as a creator, influencer, or entrepreneur?

I'd venture they're considerably less than a brick and mortar store.

Maybe a computer, software, cameras, Internet? Therapy for that one time someone left a comment on your video saying you have no talent and should just give up? (Looking at you, @TrollKing8935147)

If you want sponsorships to grow into a lucrative, recurring revenue stream, hiring a lawyer to create a boilerplate contract template is a good investment.

Before we get into how to familiarize ourselves with various contract terms, I must warn you of one colossal mistake: When you receive a contract, if you notice a clause where the brand is asking for something you suddenly feel should cost more money, do not try to return to the negotiating table.

This is a terrible idea for many reasons.

First, it makes you look bad because it seems like you don't know what you're doing.

Second, and more importantly, it makes your brand or agency contact look bad.

Before sending you the contract, they went to their boss or client and said, "Great news, Justin is locked in at $XYZ!" The boss then said, "Awesome, ask the legal team to create a contract."

When you ask for more money, your contact has to go back and say, "I know I told you Justin was locked in, but now he's demanding more money."

You look greedy. Your contact looks like an idiot. Their boss now thinks they're sloppy. To top it all off, the legal team is now mad that they must do extra work.

Not a great start to the partnership.

Instead, from this point forward, you must ask every detail you can think of about the deal structure, deliverables, and terms in advance so there are never any "gotchas" when the contract arrives.

3 Common Mistakes and Pitfalls with Contracts

❌ Using an email thread or DM as "proof" of the collaboration

❌ Not understanding the terms you're agreeing to and signing the contract anyway

❌ Getting into legal trouble if you breach the contract