Sponsorship contract: why you should always sign one?

Sponsorship agreements are often not supported by legal sponsorship contracts. Why having a contract if everything can be found in an email trace? If one party does not follow the agreement, is it really worth starting a legal procedure for something in the value of a couple of hundred dollars? Probably not. However, having a simple legally binding paper is a good practice that might come handy one day.

WHAT TO INCLUDE IN THE SPONSORSHIP CONTRACT

The sponsorship contract doesn’t have to be a rocket science. It also doesn’t have to involve lawyers. You can prepare one yourself, especially if the sponsorship is of a smaller value.

I would suggest to include the following in your sponsorship contract:

  1. Termination, duration and renewal. Sponsorship usually ends when the event/project is over, however this is not always the case. Some elements of the sponsorship could carry on beyond the event itself (intellectual right properties are a good example). This is why it is imperial that the parties of the agreement discuss and agree in advance when their relationship will end, and whether and how it could be renewed.
  2. The parties, who are entering the sponsorship relationship. There should be no doubt who are the parties of the sponsorship agreement, and who represents them.
  3. Sponsor’s rights and obligations. Usually there are different levels of sponsors, depending on the size of each sponsor’s investment. However, some sponsors might get more exposure even though they have invested less. They just came up with better ideas on how to engage with their target audience (through their sponsorship activations). To avoid any disappointment, I would suggest not only to have sponsors’ rights and obligations clearly defined prior to entering the agreement, but also to keep each sponsor informed on what the others are planning, and encourage them to think of their own activations. Building the relationship is the key.
  4. Sponsee’s rights and obligations. Even though this is the core essence of any sponsorship relationship, sponsees often don’t deliver on what they have promised. It happens rather often that a sponsee simply forgot to put the sponsor’s logo on their website, for example. Having this clearly stated in the contract there is no doubt what the sponsee’s obligations and responsibilities are. This is also extremely helpful if another person steps into the agreement (on a side of one or another) instead of the person who has originally discussed the terms of the relationship.
  5. Warranties, indemnities and liability. These are always good to be discussed in advance.
  6. Sponsorship fee & its timeline. Either in money or in kind, but this is the most important part of the sponsorship relationship and should be clearly stated in the contract.
  7. Intellectual right properties (IRP). IRP is an intangible creation of a human intellect and as such can be really easily ‘stolen’ and misused. If the IRP is part of the sponsorship, make sure you clearly define how, why, when and by whom it can or cannot be used.

Further details about the sponsorship contract could be found at Osborne Clarke website.

The importance of a sponsorship contract

JURISDICTION ISSUES

Another element that you need to be really careful about is if you are sponsoring an event overseas or you are receiving the support from overseas. The foreign laws might affect your sponsorship relationship, so make sure you are aware of all the necessary details.

As Judith Barker says, the purpose of the sponsorship contract is ‘to solidify the relationship, outline and detail responsibilities of both parties, and clearly explain the solution to possible problems’. What I would suggest is to have a template for a sponsorship contract ready so whenever you are entering the sponsorship relationship you just fill in the details of this particular relationship. This way you will have remembered to discuss all the necessary details of the proposal. The signed contract will also prove very helpful in case you delegate part of your responsibilities to someone else.

Need an advice with your sponsorship contracts? Get in touch with us!

Leave a Reply

Scroll Up