How to Get Paid Even When Sponsorship Deals Go Bad

Sometimes, issues arise during a sponsorship that are not your fault and force the brand to terminate the deal.

However, what if you had already produced all the deliverables and were waiting for their final approval to publish them?

Should the brand be able to walk away, compensating you nothing?

No, that's not going to fly.

You must avoid language in the termination clause that allows the brand

"the right to terminate the contract for any or for no reason, in its sole discretion, upon X days' notice."

Instead, the termination clause must include something like,

"In the event of termination by Client, [You] shall be entitled to the pro rata portion of any compensation paid or payable up to the date of such termination."

I've even broken it down further on more complex deals that include many deliverables:

"In the event of termination by Client, [You] shall be entitled to the following compensation upon completion of the following milestones:

• Approved concept & production greenlight: 25%
• Submitted deliverables & awaiting Client feedback: 75%
• Approved deliverables & awaiting publication: 100%"

Additionally, there will usually be a section where the choice of law or venue is outlined such as:

"This Agreement shall be governed in all respects by the laws of the State of Missouri and Influencer and Lender agree that unless otherwise indicated by Agency any action arising from or relating to this Agreement shall be brought exclusively in a state or federal court located in St. Louis County, Missouri."

Where it can get tricky is if the brand is located in a different country. If something happens and the brand breaches the contract, there's not much you can do. Sometimes, a foreign brand may be willing to agree during the negotiation to amend the venue to virtual arbitration via an international arbitral forum.

The worst they can say is "no". Then you'll just need to decide if it's worth rolling the dice and proceeding with the deal.

One last termination consideration has to do with something called a "Morals" or "Morality" clause. Many brands are terrified of getting embroiled in a public relations crisis if they partner with a creator who is then caught saying or doing something morally reprehensible. The problem is brands love drafting these clauses quite broadly where if a creator has ever committed or commits any unlawful act the brand can terminate the contract.

If interpreted literally, the brand could fire you, without pay, if they found out you drank one time underage or jaywalked. The Morals clause should always be limited to conduct that would negatively impact the brand's reputation.