The 3 Most Important Sponsorship Contract Terms to Verify (So You Don't Accidentally Commit to a Very Different Deal)

If you've ever been in a negotiation that has gone back and forth many times, you know that brands or agencies often make mistakes when listing the deliverables in the contract.

But it's your job to double-check everything so you don't accidentally agree to twice as much work.

While it doesn't happen often, I've heard of situations where people signed contracts not realizing they misunderstood how much the brand wanted them to do. Once they realized this, they asked the brand, who said, "Sorry, you already signed it."

Do yourself a favor, take two minutes and verify that the contract clearly states what you will deliver.

Another section to verify is the ownership and usage rights.

Do you own the content, or does the brand? Typically, you should always own the content and provide a non-exclusive license to the brand for a particular duration.

If the brand wants to outright "own" your content (sometimes called "Work for Hire"), that should cost more (~3-10x).

Speaking of things that should cost more, always verify the usage rights are correctly articulated.

Here's an actual excerpt from one of our past contracts with a brand:

"[You] hereby grant to Client, and to Client's senior executives, the right to use, share, and promote Sponsored Posts, including, without limitation, via social media platforms (whether owned and/or operated by Client and/or a third party) without the need to remove such Sponsored Posts after the Term. Additionally, from on or about the first post published by [You] through [Date], Client is granted permission to 'allowlist' the Sponsored Posts, meaning when [You] post about the campaign, Client can apply paid support against your Sponsored Post to reach a broader audience. [You] agree to provide all required documents and permissions necessary for Client to allowlist, including, but not limited to, making Client an ad manager on the social account."

I know, not exactly a page-turner. When reviewing language like this, ask yourself, "Did I grant the brand paid media rights during the negotiation?"

If you did…

• Was it licensing (on the brand's platforms) or amplification (on your platforms)?

• What Term/duration did you agree to?

• Is that Term/duration accurately expressed in the contract?

If you didn't…

• How can the brand modify the contract to reflect the proper usage rights?

And remember, I strongly recommend against granting the brand usage rights to your work in perpetuity. That would enable them to exploit it in paid advertising…forever. The only time when it's acceptable to have the word "perpetual" in your contract is when you're allowing the brand to showcase your work for internal purposes:

"[You] grant Company and Client a perpetual, nonexclusive, irrevocable, worldwide, royalty-free, fully paid-up, transferrable license, with the unlimited right to grant sublicenses, to use the Content for non-commercial corporate, internal, and archival purposes; client presentations; award submissions; and case studies."

Exclusivity is also critical to verify.

Here's another excerpt from the same contract I mentioned above:

"[You] agree that you will not, at any time during the Term and for six (6) months thereafter, render, participate, or perform any services of any kind directly or indirectly for any other company, group, organization, or product related to [Client's product category], including but not limited to [list of Client's competitors]."

When reviewing language like this, ask yourself, "Did I discuss with the brand that I wouldn't work with their competitors?"

If you did…

• What Term/duration did you agree to?

• Is that Term/duration accurately expressed in the contract?

• What product category did you agree to?

If you didn't…

• How can you ask the brand to modify the contract to reflect that there's no exclusivity?

I once spoke with a creator on the verge of tears who didn't realize they had agreed to long and confining exclusivity with a huge brand.

They then forged a deal with a direct competitor, produced the content, and published it.

The original brand saw this, freaked out, and threatened legal action.

The creator had to remove the new post quickly and had no choice but to terminate the deal with the competitor.

You must avoid reputational damage like that at all costs.