Morals Clauses in Sponsorship Deals: What Creators Should Negotiate

A morals clause lets a brand end a sponsorship if you do something that could damage its reputation, such as committing a crime or causing a public scandal. Creators should negotiate what counts as a trigger, who decides, how long the clause lasts, what notice they get and what happens to money and content if the brand uses it.

This guide covers what these clauses say, how a federal court read one athlete's clause, and the changes worth asking for before you sign.

What is a morals clause in a sponsorship agreement?

It's a term that lets the brand terminate the deal, and sometimes recover money or stop using your content, when your conduct could hurt its reputation. Brands add them because your name and face carry their message.

The wording decides how much risk you take on. A 2012 federal court opinion, Mendenhall v. Hanesbrands (856 F. Supp. 2d 717), quotes 2 versions of the same professional football player's endorsement clause.

His 2008 agreement let the brand terminate if he was "arrested for and charged with, or indicted for or convicted of any felony or crime involving moral turpitude." A 2010 extension swapped that for a much wider trigger:

"If Mendenhall commits or is arrested for any crime or becomes involved in any situation or occurrence ... tending to bring Mendenhall into public disrepute, contempt, scandal, or ridicule, or tending to shock, insult or offend the majority of the consuming public or any protected class or group thereof, then we shall have the right to immediately terminate this Agreement. HBI's decision on all matters arising under this Section 17(a) shall be conclusive."

The first version turns on events anyone can check: an arrest, a charge, a conviction. The second turns on how the public reacts, and it declares the brand's decision "conclusive."

Courts generally enforce these clauses. The Mendenhall opinion cites a 2005 federal appeals decision saying morals clauses "have long been held valid and enforceable," so the place to protect yourself is the wording, before you sign.

What can trigger a morals clause?

Whatever the clause names, and broad wording can reach posts, livestream comments, old content and conduct off camera. Triggers run from objective events, like a conviction, to subjective ones, like "public disrepute" as the brand sees it.

Social media makes broad wording riskier for creators. A spokesperson who appears in a few ads a year gives a brand a few chances to object, while a creator who posts daily, goes live and answers comments gives it many more, and old posts stay searchable for years.

Brands run a brand safety check before they make an offer, and our guide to what brands look for in influencers walks through it. A morals clause carries that same check through the life of the contract.

What happens if a brand invokes a morals clause?

The brand usually ends the deal and stops paying, and the contract decides the rest: whether you refund fees, whether your content comes down and how you can dispute the call.

Depending on the wording, invoking the clause can mean:

• Termination, often effective immediately.
• Future payments canceled.
• A refund of fees already paid, sometimes in full.
• Sponsored posts removed and ads with your content switched off.
• A public statement from the brand about ending the relationship.

Wording that gives the brand the final say still has limits. In the Mendenhall case, the brand ended the deal after the player posted about a major news event, and it told the press it "strongly disagreed" with his comments. The court refused to rule for the brand at an early stage of the case.

It found that the brand's discretion was subject to the implied covenant of good faith and fair dealing, a promise read into the contract not to act "arbitrarily, irrationally or unreasonably." It also said "mere disagreement" with the comments wouldn't have triggered the clause, and that the public's actual reaction was a question of fact.

That ruling came before any trial, so it didn't settle who was right. It does show why your clause's standard matters: a defined trigger and a "reasonable judgment" test give you something to argue with.

What should creators negotiate in a morals clause?

Narrow triggers, a fair standard, a time limit and a process. Aim for a clause that covers serious conduct without handing the brand an exit for any passing controversy.

1. Objective triggers. Name the conduct that counts, such as a conviction, a guilty plea or specific behavior the brand cares about.
2. A reasonable standard. Swap "sole discretion" or "conclusive" for "reasonable judgment, exercised in good faith."
3. A time limit. Cover conduct during the term, plus anything earlier you didn't disclose.
4. Notice and a response window. Ask for written notice and a few business days to respond or fix the problem, such as editing a post.
5. Earned fees stay earned. Fees for work already delivered remain yours, and any refund is limited to work you haven't done.
6. Content after termination. Agree who removes which posts, and how fast.
7. Mutual terms. Ask for a reverse morals clause, covered in the next section.

Here's how a broad clause might read after those changes. Both versions are example wording to review with your lawyer.

As drafted: "If Creator engages in any conduct that, in Brand's sole discretion, may bring Creator or Brand into public disrepute, Brand may terminate this Agreement immediately and Creator shall refund all fees paid."

As negotiated: "If, during the Term, Creator is convicted of a felony, or engages in conduct that, in Brand's reasonable judgment exercised in good faith, brings Creator into widespread public disrepute, Brand may terminate this Agreement on written notice. Before terminating for any reason other than a conviction, Brand will give Creator 3 business days to respond. Fees for deliverables completed before termination are earned and non-refundable."

Our guide to negotiating brand deals has scripts for raising changes like these without stalling the deal.

What is a reverse morals clause?

It's the creator's version: a right to end the deal if the brand's conduct damages your reputation. Ask for one in any deal where your face sells the product.

Reasonable triggers include fraud charges against the company or its leaders, a safety recall or regulator action over the product, product claims you can't stand behind, and conduct that draws widespread public criticism. The remedy should cover termination, payment for work already done and removal of your content within a set number of days.

The FTC's Endorsement Guides support part of this. When an ad says you use the product, the brand may keep running it "only so long as it has good reason to believe that the endorser remains a bona fide user of the product" (16 CFR 255.1(c)). Endorsers can also be liable for claims they know or should know are deceptive (255.1(e)).

If you stop using a product or lose faith in its claims, tell the brand in writing. A reverse morals clause turns that letter into a clean exit.

Contract review is part of our Legal & Business Affairs services, and we'd still tell any creator to have their own lawyer read a sponsorship agreement. 1DS Management represents 107 creators, athletes and entrepreneurs, and if you'd like a team reading terms like these with you, apply for representation.