If you work in the sports or entertainment industries, signing documents typically comes with the territory, whether you are signing autographs or contracts. And knowing what you are putting your name on will become increasingly important as you become more successful.

One item that many people in these areas often sign is a contract with a morals clause. For instance, if you are signing an endorsement or sponsorship agreement, it could very well have this clause somewhere within in the contract. It may not be exceptionally long or even all that specific, so it is important to watch for them and understand what you would be agreeing to if you signed.

What a morals clause is for

Morals clauses typically release from liability or contractual obligations the company if the performer, athlete or executive engages in certain behaviors or makes certain statements.

Often, the acts and statements at the center of morals clause disputes are ones that the company or public finds obscene, offense, immoral or deceptive. They have the potential to hurt both parties' reputation and cause financial damages in cases of sponsorships and endorsements.

An example might be an athlete sponsor of a sports drink convicted of using performance-enhancing drugs. Another example might be a high-profile actor who makes a racist comment in an interview. In both cases, their acts and statements could tarnish their reputation and the reputation of any company they sponsor, which would likely violate any morals clause they would have.

Problems that can arise

Even if you never expect that you would say or do something that would trigger a morals clause, it is crucial to be cautious about agreeing to them. Often, the language in them is broad and open to interpretation -- and confusion. 

Further, there can be issues with the actions taken (or not taken) when a person is accused of violating the clause. Some may face financial penalties, payment of damages or termination of the agreement. These actions can vary from contract to contract, which can lead to battles over what is and is not fair in terms of legal remedies.

For these reasons, having legal support when reviewing, signing or enforcing an agreement with a morals clause will be vital. 

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