Of course, entertainers get paid for making appearances on the stage, screen or field, but many of them also maintain other sources of income. Obtaining an endorsement deal can be a way to develop and improve one's public image. Not only that, it can be a very important and reliable source of additional income.
Just like many business relationships, contracts are typically involved in endorsement deals. Unfortunately, legal issues can arise if certain provisions of the contract fall into contention. Actress Octavia Spencer, who starred in "The Help," recently filed suit against a company in Los Angeles court for failure to uphold their end of an endorsement contract.
What is the primary issue in this breach of contract suit? The company, Sensa Products, didn't pay Spencer for speaking publicly about the benefits of their weight-loss products.
One of the terms of Spencer's endorsement deal was that she wouldn't appear in tabloid advertisements or pose for photos. The company on the other end of the endorsement upheld these crucial aspects of the contract, but they raised issues with the way Spencer made endorsements on Twitter. In her tweets, the actress included the "#spon" hashtag, which was an effort to inform her followers that it was a sponsored message.
The actress included this hashtag in her endorsements based on recommendations from the Federal Trade Commission. This hashtag is designed to keep consumers aware of when celebrities or public figures are making paid endorsements. Unfortunately, Spencer is being punished for trying to be transparent with her fans.
One question that may be asked as the case moves forward: Isn't it reasonable to assume that consumers more clearly understand when paid endorsements are delivered by other forms of media? The hope is that Spencer is compensated for attaching her professional reputation to a consumer product.
Source: Business Standard, "Octavia Spencer sues diet company for breach of contract," Aug. 29, 2013