What is a UGC Contract?
User-Generated Content (UGC) contracts, often used in the context of influencer agreements and assignments, establish the legal relationship between the creator of the content, the brand that commissions the content, and any intermediary organizations that facilitate the relationship. Essentially, such contracts serve the purpose of ensuring that the creator releases and licenses all rights they have in any content they create , such as an image or a piece of writing, so that the brand can use the content in ways the brand wants to. In some cases, the platform or organization that matches up the brand and the creator will be involved and will have to get a license from the creator. UGC contracts are important for brands and creators alike because they provide detail on how the content can be used and what restrictions the creator may have on their use of the content.
Components of a Contract Template for UGC
The essential components of a UGC (User-Generated Content) contract template should include a clear outline of the intellectual property rights, payment terms, and confidentiality obligations.
Such an outline may include:
Content Ownership
Perhaps the most important aspect of a UGC contract template is specifying who owns the intellectual property rights to the content created. A well-drafted UGC contract template should specify the ownership of the content and whether any rights are licensed to the company or brand commissioning the content.
Payment Terms
The contract template should outline the compensation for the creator, whether it is in the form of a flat fee, a royalty, or another type of compensation.
Confidentiality
If any part of the agreement contains proprietary or confidential information, it should be protected in the contract template. Such a provision will typically specify that the parties agree not to disclose any of the other’s confidential information and define what does and does not constitute confidential information.
Legal Aspects of a UGC Contract
The primary legal considerations that should be kept in mind when drafting or entering into a UGC contract are: Ownership of content, Subject to Rights, Style Guide / Specifications, Legal Uses, and Termination. There is no set contract for UGC due to the broad range of potential uses, from for profit to non-profit, from short term to long term, and the many potential deliverables.
Ownership includes the ability to sell it after the engagement. If there are two parties, what if one sold the result and they were both found in violation of the other. This could be avoided by the UGC contract clearly identifying ownership, right to license and right to assign rights, which includes the right to sell. In addition, the contract should make either party’s rights to sell contingent on the express permission of the other (which the contract would require the parties to give).
Subject to Rights refers to the right of the UGC Provider to use the deliverables only as permitted by the UGC Contract. All other outside usage is prohibited. For example, one form of usage is for promotional purposes only (i.e., one social media post). Another form is for commercial purposes, which means that the UGC Provider can promote the brand on social media and they can use the content for other uses. In addition, the UGC Provider can be required to include specific language in their social media posts, such as: "This post is sponsored by the Company Name." One of the goals of a UGC Contract is to prevent the UGC Provider from misusing the content. For instance, if a UGC Provider promotes the Company’s competitor on their social media pages, then the Company’s only course of action to stop the UGC Provider from doing this again could involve costly litigation.
Personalization of Your UGC Contract Template
Having a UGC contract template is only the first step for a business. UGCs will differ depending on creative style, the industry type and many specific details of how the project is intended to be used.
Considerations for customizing a UGC contract template may include the following:
In drafting any UGC contract template, it is important to remember that the goal is to have the UGC creator provide rights to the business who engaged the creator for purposes of using the deliverables it commissioned for its own use. You therefore do not want to draft a custom contract that forfeits the business’ rights and remedies to the deliverables it has commissioned .
The other significant item to note about your relationship with a UGC Creator is that it is preferable for the UGC Creator to warrant the services they have provided, thereby ensuring their work is sufficiently original, the deliverables don’t infringe upon any third-party rights and with all necessary permissions and waivers of any third-party consent needed to exploit the deliverables.
Warranties in this context should contemplate enabling the business to both pursue enforcement actions with any third-parties who purport to claim right in connection with the deliverables and to render to appropriate damages to the business in the event any such third-party lawsuits are necessary.
Common Mistakes to Avoid
The world of user-generated content can be a minefield for businesses if navigated incorrectly. The biggest challenge? Avoiding misunderstandings that can lead to disputes down the line. When we develop our UGC contract template for our clients, we’ve tried to account for some of the most common pitfalls.
One of the biggest problems arises when the terms of use for creativity isn’t clearly defined. For example, we recently worked with an influencer creating a piece of copy that included a brand’s tagline. Addressing ownership and use of the tagline in detail in a UGC contract avoids any risk of dispute later on.
The other big problem is payment – and, importantly, payment terms. Again, this is something that’s easy to forget until you’re in the middle of a payment dispute from something you agreed six months ago. When it comes to UGC contracts that cover a piece of multiple forms of content (for example, a blog post that includes social media posts and a piece of graphic design), specify whether you’ll pay a set fee per piece of content, or a fee for the entire collection. Also clarify in the contract whether those individual fees will be dispersed at the same time, or whether they will be paid after the delivery of each piece of content.
Some platforms also have their own rules on the type of content that can be used for certain types of promotion, and how. You’ll need to ensure that any of your UGC contracts includes this information, and that the content produced and the way it’s shared fit within those rules.
Contract Template for UGC – Best Practices
It is essential to regularly review and update your UGC contract template to ensure that it complies with current laws, your organization’s policies, and best practices. The digital landscape is always changing and evolving, and your UGC contract template should do the same. For example, as more users access websites from mobile devices, you may need to adapt the terms and conditions to address issues unique to mobile users.
Be sure to check for changes in privacy laws, digital rights management, copyright, trademarks, and other intellectual property laws. Review with in-house counsel or a qualified lawyer to determine whether any industry-specific regulations have changed that could affect your UGC contract template .
In addition to reviewing the UGC contract template regularly, consult with internal stakeholders such as stakeholders from the marketing, sales, product development, and legal departments to identify any relevant issues that they have encountered with user-generated content on an ongoing basis. As content creators become more familiar with Internet law and established intellectual property rights, they may begin requesting more stringent restrictions. Your UGC contract template should be flexible enough to adapt to these adjustments while still protecting your organization’s website.
Consulting with legal professionals before launching your website, when drafting the UGC contract template and whenever you make significant changes to your website enables you to anticipate problems before they arise.
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