Are all contracts legally binding? That’s a great question. The answer is yes, so long as you tick off all the little boxes in the elements that make up a contract. In other words, there are certain factors that make up a valid contract. If you stick around to the end, you will learn something about contracts — and writing — that might surprise you.
So aside from being of legal age to enter into a contract, there are four things that you have to satisfy in order to make up a valid contract: mutual consent, offer and acceptance, consideration (and no, it’s not like… caring about something), and legal purpose.
That first one, mutual consent. That’s sometimes called a “meeting of the minds.” In other words, you and the other person are all agreeing to the same thing. You’re all on the same page as to what you’re agreeing to.
Offer and Acceptance.
Two, offer and acceptance. Pretty straightforward, there is an offer on one hand and an acceptance of the offer on the other hand. You can see where you might poke holes in a situation where… was that offer really accepted? Was there even an offer?
Consideration is something of value that you are giving in exchange for whatever the other person is giving. So, typical scenario is: I agree to provide services, you agree to provide payment, we are each providing consideration. One is services, the other is payment. We’re each providing something in order to enter into this contract.
And then legal purpose: you can’t contract for something illegal. (Sorry.) If you’ve satisfied all of those things, yep, it’s a valid contract.
Why Having it “In Writing” Does and Doesn’t Matter When it Comes to Legally Binding Contracts
Notice! I did not say that it has to be in writing in order for it to be a valid contract. I was one of two A’s in my contract, law class in law school thank you very much, and there was a little something called the “Statute of Frauds.” I know that sounds very legal. But it basically says that certain types of contracts are only valid if they’re in writing. That’s stuff like real property, real estate. You have to have it in writing in order for that type of contract to be valid. But in general, a contract does not have to be in writing in order to be valid.
This is why I say you should always have your agreements in writing. Not in text messages, not in DMs, not in emails back and forth, because those things can make up a valid contract. Or they could provide holes that you can poke into the agreement that say was there really an offer? Let’s scroll back through these emails. Was there really acceptance? Let’s scroll back through these DMs. Avoid all that. Avoid all that just have it all in a document.
So, I hope this helps you better understand that yes, all contracts — so long as you tick off all the elements of a contract — are legally binding.
Want my latest free resource for content creators? Scroll down to the bottom of this page and sign up!
By the end of this post you’ll know more about four legal documents that are involved in pivoting your online business. And it’s not as intimidating as it sounds. We’re going to be talking about trademark applications, non-disclosure agreements, work for hire, and a trademark license. So here we go.
So first, a trademark application. Contrary to what you might think, you can’t add to an existing registration. Once you register your trademark, it’s registered in connection with whatever product or service that you’ve registered previously. What you can do is register the same mark, but in connection with a different offering altogether. Are you registered in connection with podcast episodes, but you’re pivoting your online business and offering e-courses under the mark? Simple. You’ll basically file another application for the same trademark, but under that new category, that educational services/e-course category.
Non-Disclosure Agreements (aka NDAs)
People often refer to non-disclosure agreements as confidentiality agreements, they’re the same thing. It basically protects confidential information from being disclosed to the public. Who might you disclose confidential information to when pivoting your business? Maybe a manufacturer, maybe a contractor, but again, that non-disclosure will help keep that information confidential.
Work for Hire/IP Rights Agreement
You’ve heard me talk about Work-for-Hire/IP Rights Agreements before. (I have one for sale in my Contract Kit™ shop). If you’re pivoting your business, odds are that you’re needing some new, creative content. Essentially, anyone that’s creating any creative content for you — whether it’s graphic designs, slides for a presentation, a logo, a new website — anyone creating something creative, should sign this type of agreement. Under U.S. Copyright law, just because you’re paying somebody to create something for you doesn’t mean that you own it. So the purpose of the work for hire/IP rights agreement is to make sure and reinforce that you own all of the copyright to that work product.
And finally, a License Agreement. A license agreement is meant to help you where someone is already offering something that you want to sell. And rather than reinvent the wheel, and come up with a formula for perfume, let’s say, you go to someone already in the business of making perfume, and you license your brand name to that existing product. You may be a blogger for entrepreneurs and you want to venture out into creating a physical planner for instance. Or you are a podcaster but you are venturing out into your own sound equipment line. Or maybe you’ve built your fame around a little ol’ cooking show and now you and Macy’s partner up on things like sheets. (Hello, Martha Stewart.) You are venturing into a new area but you may be licensing your brand and your reputation in connection with an existing brand.
So there you go. You’ve got your trademark application, your nondisclosure agreement or confidentiality agreement, you have a work for hire or IP assignment agreement, and trademark license.
I hope that helps you understand some of the different documents that go into pivoting your online business.
Hey, online business owner! I’ve got a little something for you. Get four things that you can do RIGHT now to protect your business online delivered to your inbox for four weeks — just click below.
In this COVID-19 world, everyone wants to know if force majeure applies. In this post, you’re going to learn what “force majeure” means, what it does, and when it applies. We’ll also look at some force majeure sample clauses and I’ll give you some examples of business transactions and how they’re affected by force majeure. Essentially, you’ll see how a force majeure clause can help in times of emergency.
First, what is “force majeure”?
It’s French for “superior force.”
It’s a clause that appears towards the end of a lot of contracts, especially service-based contracts.
It basically excuses non-performance or not living up to your end of the contract for circumstances out of anybody’s control.
What can a force majeure clause do?
Well, it could suspend everything until the force majeure is removed or eliminated or out of the way,
It can say, “everybody can walk away if a force majeure event happens,”
It can, but it doesn’t always, talk about what happens to any money that’s changed hands as of the force majeure event. So, refunds, deposits, etc.
When does force majeure apply?
Currently because of COVID-19, everybody wants to know if it applies in the case of a pandemic. Of course, the answer is it depends on what the contract says.
So, let’s look at these two sample force majeure clauses.
This first version specifically talks about what is considered a force majeure event.
The second version is similar, but different.
Notice it says “force majeure includes, but is not limited to…” certain things. That leaves room to say hey, maybe a pandemic is included in this definition, even though it’s not specifically listed.
How a force majeure clause can affect online businesses: two scenarios
As I said, it can affect different businesses in different ways.
Well, does force majeure somehow prevent you from doing that? Are you supposed to be posting from a live event of some kind or in a specific location that you can’t access because of a force majeure event? These questions show how a force majeure clause would be important in this scenario.
It also applies to in-person events. Even though the final event is conducted in person and not really on the Internet, certainly tickets are sold on the Internet. And, promotion of the event goes on on the Internet, sponsors are announced and splashed across the Internet. So, reviewing sponsorship agreements or other similar agreements may be necessary during a force majeure event.
What to look for
It’s important to know what happens under your contract because when an event that’s out of anybody’s control happens, of course everyone is going to be worried about funds. So, you want to determine:
What is a force majeure event under my contract?
Is there an express definition of what is considered a force majeure event or does it have that kind of “including but not limited to” language.
What does my contract say happens during a force majeure event? Is everything just kind of stopped and suspended until it all goes back to normal? Or, does it say everybody can walk away if a force majeure event happens with no further obligation?
Finally, and you may actually have to look elsewhere in your contract, but what happens to money paid up to that force majeure event date? Does it get refunded? If your contract talks about a non-refundable retainer I might say, yeah, even if the force majeure clause doesn’t talk about what happens to money in the case of a force majeure event, non-refundable means non-refundable.
So, look at your contract, see what it says in terms of what to do in a force majeure event.
I hope this post has helped you to understand what is force majeure, how it applies in different industry settings, and how it can help an online business.
If you are interested in learning four things that you can do right now to protect your business online, click on the image below. Sign up, and you’ll get one thing per week for four weeks delivered to your inbox.
By the end of this post you will know the three contracts that online creators must know about, in my opinion. And I’m not just telling you what those contracts are. I’ll give you some key terms and the problems that each of these documents will prevent. So let’s dive in.
They tend to be kind of long, so it’s hard to pinpoint just two or three key terms, but, some of those key terms are:
Prohibited Conduct. (This can include a code of conduct for a membership site). This is grounds or rights to terminate a user’s account if they engage in certain activity. In other words, reasons why you might terminate somebody’s account.
Limitation of Liability. Limiting your liability if things go south.
Affiliates Policy. A sweet explanation of affiliate links you might have on your site.
Contracts Online Creators Must Have: Contractor Agreement
A Contractor Agreement is an agreement between you and any contractor that you use. This can be a photographer, a copywriter, a graphic designer, or a social media marketer. The contract lays out the terms of your relationship with that individual. A lot of times contractors will have their own service agreement that they will send to you, but you would be surprised how many people don’t have contracts. So you might need to have your own Contractor Agreement template on hand.
Contractor Agreement: Key Terms
IP ownership. This is key, because of that copyright myth that you’ve heard me talk about before. People think that because they’ve paid a contractor to create something, that they own it, but that is not true, right? Under US copyright law, any copyright transfer has to be in writing in order to be valid. (If it’s not done by an employee kind of in the course of their job.) So, having that IP language in a contractor agreement is crucial if you want to make sure that you own that intellectual property.
Non-solicitation. This is a little bit different from non-compete, and it depends on state law, but it basically prohibits a contractor from soliciting either other coworkers or other contractors away from you, or your clients or customers away from you, for a certain period of time. So that’s a little a little boost in protection.
Company Systems and Confidential Information. If a contractor needs access to your passwords, social media accounts, or devices, listen up. Likewise if contracts have access to confidential information like analytics data. Having something in a Contractor Agreement that spells out a) how to handle confidential information and b) what happens if that confidential information is misused is priceless.
Problems A Contractor Agreement Can Help You Avoid
Essentially, it’s all about peace of mind.
Peace of mind when it comes to knowing that your IP ownership is secure.
Peace of mind when it comes to treatment and use of your confidential information and systems.
Peace of mind when it comes to knowing that your relationships with your customers are safe.
All of those things! And, of course, having a document that that has it all laid out so that you and the contractor have a mutual understanding, in one spot, as to what’s going.
Contracts Online Creators Must Have: Collaboration Contract
The last document is a Collaboration Contract, and that’s different from a sponsorship or kind of an influencer or sponsorship agreement. It’s almost like a styled shoot in the event-planning world. You collaborate with another business in connection with a launch, an event, something like that where you are both promoting something together, like a joint promotion arrangement.
Collaboration Contract: Key Terms
Common terms: Well, you have “roles.” You want to make clear who’s doing what.
There is “ownership of intellectual property,” so who owns the photographs, any webpages, any copy, any posts. There’s use of any IP, so who can use it and for how long after the campaign or after the venture has ended. And then there’s “confidential information,” so again, to extent you need to exchange confidential information to move this thing forward –whether it’s analytics information, your target market information, information that you use in connection with any Google or social media ads – how each of you must treat the other’s confidential information.
Problems that a Collaboration Agreement Could Avoid:
Avoid Discrepancies. Make sure everyone knows who’s doing what kind of makes sure everyone’s on the same page there;
Avoid mistreatment or misuse of IP. Maybe you’ve decided that if you create something, each of you create something, you own whatever you’ve individually created. That’s fine, but just making sure that those things are clear and put in the document so that everyone’s on the same page.
I hope this post has helped you understand why these documents are important, how they come into play, and the problems that they might help you avoid.
Got an online business? Do you like free info? Click below to learn four things you can do right now to protect your business online.
If you have a dedicated following in your niche market, you might have dipped your toe in the affiliate pond, creating sponsored content with brands that you adore or just plain believe in. Or, you’ve found the perfect ambassador for your brand. Someone with a decent sized following that is (more importantly) very engaged. You know your sales will take off after affiliating with this influencer.
Sound familiar? Then this post is for you. It dissects some important provisions that a brand owner and influencer are likely to hash out when entering into an Influencer Endorsement Contract. Remember, contracts are you friend! (Or they should be.) A good contract makes sure both parties are on the same page so there is no ambiguity. It eliminates the need to comb back through texts, emails, or DMs to figure out what you agreed upon.
Disclaimer: Of course, this doesn’t cover each and every provision you’ll find in an Influencer Endorsement Contract. It does go through some important provisions that a good Influencer Endorsement Contract should cover. When in doubt, please contact a lawyer.
The Sponsored Content & Platforms.
A good Influencer Endorsement Contract will get very specific on the deliverables. And “deliverables” means whatever the Influencer is providing or “delivering.” What type of content are we talking about — a photo + caption? Photo or video-only media (like Instagram Stories or Snapchat)? A blog post? A blog post and a photo + caption? There shouldn’t be any question as to what’s covered, here.
Is the Influencer expected to post daily? Weekly? Monthly? Or maybe this is a one-off, one-time thing? Either way, a good Influencer Endorsement Contract will spell it out.
Exclusivity in Brand’s Field.
Many times, an Influencer will be expected to say “sorry, no” to brands competitive with the brand that’s hiring them for a specific endorsement campaign, at least for a certain amount of time during and/or after the term of the relationship with this brand. If that’s the case, the Influencer Endorsement contract should say so. It should also specify the exclusivity period that applies after the contract ends. One month? Three? A year?
It’s common for IP ownership to go to the Brand, since the brand is paying the Influencer to post (and, sometimes, create) content in support of the Brand. Still, depending on the reach and “muscle” of the particular Influencer, ownership could go the other way. Either way, remember that copyright ownership usually goes to the creator by default. If Brand and Influencer agree otherwise (or even if they don’t), it behooves them to put that understanding in writing.
Compensation can come in the form of free goods provided to the Influencer, a lump sum payment, a percentage of sales, or some creative combination of these options. A sound Influencer Endorsement Contract will make the form of compensation, and other payment dates and details, clear.
Approvals and Brand Guidelines.
Approvals often come down to who has more bargaining power, although again, because the Brand is paying for an endorsement, a favorable Influencer Endorsement Contract should give some level of approval rights to the Brand. Many times a Brand will make Brand Guidelines part of the agreement. Brand Guidelines consist of text and image guidelines. For example, no swearing, no cigarettes, no religious references, no references to Brand’s competition by name, etc. An alternative to a Brand’s unfettered approval rights is to allow objection/rejection of content solely as it doesn’t comply with the Brand Guidelines. (After all, the Brand is likely familiar with the Influecer’s voice and style, or the Brand wouldn’t have the desire to enter into this agreement in the first place.)
Compliance with Laws.
Remember that FTC crackdown we’ve talked about? (Thanks, Fyre Festival.) The Influencer Endorsement Contract should make clear that whoever is responsible for the copy — whether that’s Influencer or the Brand — is responsible for complying with the FTC’s guidelines on disclosing that promotional connection between Brand and Influencer.
So what’s a guy or gal to do when it comes time to enter into an influencer-brand sponsorship arrangement? You have options. For a bespoke contract that speaks to your each and every need, you can (and should) contact a lawyer. But for the DIY-ers out there, Spear IP is officially releasing an Influencer Endorsement Contract Template as part of its contract template arsenal! Click below to check it out. And, for being a devoted follower of the Spear IP blog, use code BLOG for a $10 discount!
What’s next? Click here to download your [free] Essential Legal Checklist from Spear IP.
There’s so much anticipation and planning that goes into launching a podcast. The name, the graphics, the episode lineup… all of these things are the “fun part.” A Podcast Guest Contract might be the furthest thing from your mind. But what’s not fun? Getting into a legal tiff with a podcast guest. That’s why you might consider adding “podcast guest contracts” to your pre-launch checklist. Below is a (non-exhaustive!) list of what should be included in a solid Podcast Guest Contract.
Using independent contractors has its perks: an independent contractor is not an employee, so an employer can save by using contractors for certain services. But does an employer automatically own creative works created by its independent contractors? In short: probably not.
We can all agree that handshake deals are not your friend, right? Artists often rely on the handshake deal or verbal agreement, maybe due to the assumption that contracts for artists are ten-page beasts, chocked full of legalese. On the contrary, a written contract can make certain that each side’s understanding matches up to the other’s. Put differently, a contract makes sure everyone is on the same page (pun intended) when it comes to important terms such as payment, delivery, and copyright.
We’ve become a very visual society. Maybe we have always been that way, but social media has made us more aware of just how visual our society is. (Hello, Instagram.) As such, every article, DIY project, and blog post has a pretty image. (If there is text overlaid on the image, it’s pretty text.) Luckily, there are several websites that offer stock photos and free fonts to help make things “pretty.” But can you really get away with using stock photos and free fonts with no strings attached?
There comes a time where every professional thinks about contracts. Perhaps a client requests that the business sign a nondisclosure agreement. Or, the business is just starting out and its business owner knows many of its clients will expect a contract. Still, many businesses and professionals do not embrace the contract. Why? Contract Myths.