Question

You will read “Sports & Entertainment – Endorsement Contracts" of your textbook. Should "morals clauses" be a part of an athlete's endorsement contract? What are the views of the athletes and of the companies? Who should decide if or when the contract should be terminated for violations? Can the courts be utilized controversies over whether a "morals clause" has been violated? If so, is the occurrence of a morals clause violation a condition precedent or a condition subsequent? What are the potential problems if there is no such clause in an endorsement contract? Should repetition of previous poor behavior of the athlete affect the decision whether a termination is appropriate, with the thought that the company accepted that behavior before entering into the contract?

Answer 1

I think that “moral clauses” should part of every athlete’s endorsement contract regardless of their sport and skill. Such enforcement of contractual “morals clauses” can serve as a warning and build awareness to all athletes and raise the morals and ethics both in and outside of the sporting community. Athletes and corporate endorsements like Nike are in the view of many subscribers. Fans and potential customers make purchasing choices with the influence of celebrity marketing. Celebrities like Michael Jordan and incredible brand recognition to consumers and fans, must maintain a higher level of morals to prevent tarnish to his brand, fans and business. I think that the decision to terminate endorsement contracts should be a mutual breach. Depending on the circumstances of the party violating the “morals clause” either should have the opportunity to follow the steps of a shareholder-analysis and to breach contract of each bests interest. The courts can be utilized in deciding on a violation of morals through common law, criminal and civil law, or possible rights that were violated. Athletes have no advantage over anyone else and are punished for off-field conduct as a citizen. Without “moral clauses” as a novation between endorsers and unethical endorsees, professional player’s associations and leagues would be responsible to enforce Employee Conduct Policy and an at-will employer to terminate delinquent behaviors. In regards to reputed tantrums of athletes, each is entitled to due-process of the endorsing board members as well the league members.