Within the last year, we have witnessed a laundry list of personalities in the public eye come under fire for their behavior off camera and off the playing field. Some of these personalities behavior crossed the line from being morally offensive to the average person into alleged criminal acts.
So, let’s talk about: (1) sports figures; and (2) film and television actors. Sports figures may have large endorsement deals that depend on the public holding the sports figure in high-esteem. Production companies depend on the availability of film and television stars so they can appear on set and do what they do best–shine in front of the camera.
However, what happens when these people have lost their promotional luster or they are unavailable due to behavior that the general public would find morally reprehensible–enter morals clauses in contract.
A morals clause is part of a contract that defines certain behaviors that are unacceptable to a party. If the conduct defined in the morals clause comes into question, then the contract may be voidable or subject to termination. The reasoning here is that the party contracting with the sports figure or film and television star has been subjected to conduct that is detrimental to their interest; or it devalues the performance due under the contract.
Historically, morals clauses have been thought to be too vague to be enforceable when drafted in a catch-all manner–like “X may terminate this contract upon written notice to Y if Y shall at any time fail, refuse, or neglect to conform their behavior to the moral standards of the community.” Doesn’t that clause just feel too sweeping to have any effect. Nobody should be able to define what a person can or can’t do in their personal life right?
But, what about a production company considering an actor that has a drug abuse problem that has been widely publicized and is generally known to be true–maybe, even admitted to by the actor. There is an inherent risk that their behavior off the set may result in the production coming to a screeching halt. Alternatively, what about a sports figure who’s squeaky-clean public image sells products at a premium price paid to the sports figure for the right to use their image?
A well drafted morals clause that defines specific behavior that makes the sports or film and television star unavailable or erodes the value of their public image may be the best way to try to curb the risk. It’s like everyone’s parents use to say about private behavior and personal risk taking: “Don’t do anything that you wouldn’t want to end up on the front of the New York Times.”
In areas like sports and entertainment, almost all behavior from these public figures ends up on the front of the New York Times. This is why morals clauses are so important. If drafted properly, they may allow advertisers and production companies to limit damaging economic effects and distance themselves immediately from the latest public figure turned social pariah by implementing a morals clause in their contracts.