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Los Angeles judge dismisses fraud claim in endorsement dispute

While some celebrities do endorsement deals because they sincerely approve of a product, others simply do it for the paycheck. Whatever the reason though, these contracts should be taken incredibly seriously. Even the smallest misinterpretation of terms in the agreement can mean litigation for both the celebrity and the company down the road.

This is the case for actress Octavia Spencer who is currently embroiled in an endorsement dispute with Sensa. The actress signed a $1.25 million contract with the weight loss company under certain terms. But the actress contended in court recently that Sensa had not lived up to their side of the contractual agreement. This meant, to her, that they were committing fraud. But a Los Angeles judge disagreed this month and instead pointed out that her claim points to a clear breach of contract dispute.

The main breach, court documents say, comes from Sensa’s attempt to forego a $700,000 payment to the actress for her social media activity for the company. Sensa claims that the actress broke her contract by adding a “spon” hashtag, meaning “sponsored,” on the end of many of her tweets. But as Spencer’s lawyers pointed out, this hashtag is required by the Federal Trade Commission in cases of celebrity endorsements. Failing to do this could have led to other litigation, perhaps even just as serious as her current situation.

Even though the Los Angeles judge did dismiss her fraud claim, he did leave the door open for her to file a breach of contract claim later on if she so wishes. It’s possible, with this as the basis of her argument that she may finally be awarded what was owed to her in her contract.

Source: The Hollywood Reporter, “Judge Trims Octavia Spencer's Endorsement Lawsuit,” Eriq Gardner, Mar. 11, 2014

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