The Influencer Agreements Series: The Parties

Our eleventh minisode of the seventh season of “The Creative Influencer” podcast is available today. Jon continues our in-depth discussion of influencer agreements and brand deals with a discussion about making sure your brand deal identifies the correct legal parties, which is a more complicated and multi-faceted question than it might seem at first.

In the minisodes to come, we continue to take a deep dive into each section of an influencer agreement…

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A transcript of the episode follows:

This is minisode eleven of the seventh season of The Creative Influencer podcast. Today, we’ll discuss the parties to an influencer brand deal.

What can there be to talk about? It’s an agreement between the brand and the influencer – right? Well … it’s not always that simple.

There are times when the agreement is just between the brand and the influencer.  When that happens, I make sure that the contract contains the influencer’s correct legal name. It is not enough to use the influencer’s Instagram and YouTube handle or username. It must be my client’s legal name.

Many times, a larger brand will work with an advertising agency to contract with the influencer. When that happens payment to the influencer will be delayed because the agency rarely pays the influencer before it receives payment from the brand.  That said, when an agency is involved, the agreement will state something like, “This Influencer Services Agreement is made and entered into as of January 17, 2024, by and between Advertising Agency o/b/o the Brand.” The o/b/o means “on behalf of” the Brand.

As an influencer builds a following and does more brand deals, many of them (or their lawyers on their behalf) form loan-out companies. Loan-out companies are the companies formed to enter into contracts on the influencer’s behalf. The influencer becomes a shareholder or employee of the corporation and the corporation “loans out” the services of the shareholder/employee. Loan out companies also provide some measure of protection from lawsuits but that is a topic for another episode.

If a brand enters into an agreement with an influencer who has a loan out company, the agreement will state something like “This agreement is between Brand and ABC, Inc. f/s/o influencer.” The f/s/o means “for services of” the influencer.

There is also another reason to use a loan out company – virtual influencers. Virtual influencers are influencers created by artificial intelligence. While they can be programed to do anything, they can’t enter into contracts. Only humans or legal entities can do that. Virtual influencers do not have the capacity to enter into a contract. But, the creator of the virtual influencer can use a loan out company to contract with a brand.  Legal problem solved.

A final word about the use of loan out companies. When one is used, a brand generally requires an inducement letter. An inducement letter is signed by the influencer confirming that she will be providing the services agreed by the loan out company.

In our next minisode we’ll continue our deep dive into influencer agreements and look at compensation and payment.