In 2009, the Federal Trade Commission made several changes to the FTCs Guides Concerning the Use of Endorsements and Testimonials in Advertising, which address endorsements by consumers, experts, organizations, and celebrities, as well as the disclosure of important connections between advertisers and endorsers. The Guides were last updated in 1980.
Celebrity endorsers are addressed in the revised Guides. While the 1980 Guides did not explicitly state that endorsers as well as advertisers could be liable under the FTC Act for statements they make in an endorsement, the revised Guides reflect Commission case law and clearly state that both advertisers and endorsers may be liable for false or unsubstantiated claims made in an endorsement or for failure to disclose material connections between the advertiser and endorsers. The revised Guides also make it clear that celebrities have a duty to disclose their relationships with advertisers when making endorsements outside the context of traditional ads, such as on talk shows or in social media. Note Section XI of this form.
The term Infomercial refers to an information commercial (usually 15 to 30 minutes long) that is presented more like a talk show than a commercial promotion. Infomercials are aired normally at fringe times (late night to early morning), and aim at building awareness of a product or service by demonstrating its use and benefits. Typically, they include an attractive direct response offer (with toll-free numbers) designed to elicit on-the-spot orders.
District of Columbia Contract between Television Advertising Production Company and Actor to do Infomercial: In the District of Columbia, when a Television Advertising Production Company and an Actor collaborate to create an infomercial, it is crucial to have a well-drafted contract in place. This contract serves to outline the terms and conditions governing the relationship between the production company and the actor, ensuring a smooth and mutually beneficial partnership. Here we discuss the key components and types of contracts commonly used in the District of Columbia. 1. Purpose: The contract should clearly state the purpose of the agreement, which is to create and broadcast an infomercial for promoting a particular product or service. It should also specify the specific media outlets where the infomercial will be aired, such as television networks or online channels. 2. Compensation: The contract should define the actor's compensation for their participation in the infomercial. This may include an upfront payment, royalties based on the infomercial's success, or a combination of both. The payment terms, including when and how the actor will be compensated, should also be clearly stated. 3. Intellectual Property Rights: To ensure the production company has exclusive rights to the infomercial, the contract must address the issue of intellectual property. It should state that the production company will own the copyright for the infomercial, including all audiovisual elements, scripts, and accompanying materials. 4. Obligations and Services: The contract should outline the specific obligations of both parties. For the production company, this may include providing the actor with a detailed script, arranging for necessary rehearsals, and covering any expenses related to travel or accommodations. The actor's obligations may involve adhering to the script, attending filming sessions, and promoting the infomercial as agreed upon. 5. Confidentiality and Non-Disclosure: To protect the production company's trade secrets or sensitive information, the contract should include a confidentiality clause. This prevents the actor from disclosing any confidential information related to the production, script, or business strategies to third parties. 6. Termination: The contract should define the conditions under which either party can terminate the agreement. This may include breach of contract, non-performance, or other circumstances that justify termination. The contract should also specify the consequences of termination, such as the return of any advance payments or compensation owed. Types of District of Columbia Contracts for infomercial agreements: 1. Fixed-Term Contract: This type of contract establishes a specific duration for the actor's involvement in the infomercial, typically until the completion and airing of the infomercial. It allows both parties to have a clear understanding of the project timeline and obligations. 2. Royalty-Based Contract: In this type of contract, the actor receives compensation based on the success or performance of the infomercial. Royalties are calculated using predetermined criteria, such as the number of sales generated from the infomercial or the viewership ratings. 3. Exclusive Contract: An exclusive contract ensures that the actor cannot participate in competing infomercial projects during the contract's duration. This offers the production company a guarantee that the actor's services will not be engaged by any other similar ventures. In conclusion, a well-drafted District of Columbia Contract between Television Advertising Production Company and Actor for an infomercial is essential for a successful collaboration. It protects both parties' interests, defines responsibilities, and ensures the smooth execution of the infomercial project. Various types of contracts, such as fixed-term, royalty-based, or exclusive contracts, can be customized to meet the specific needs of the parties involved.
