Hands off hot topics, e-commerce firms tell endorsers

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₹7,215.83 crore on advertising, promotions and marketing in FY22, an Inc42 analysis said, adding such expenditure is seeing a double-digit growth. Still, it may be difficult for the companies to invoke such clause.

This is because to claim damages, the company will have to show the actual financial impact due to the actions of the celebrity like how much sales dropped or how many users shifted to other platforms due to the comments made, say legal experts. “It is not surprising that companies want to insert indemnity clause to protect their commercial interest.

However, any damage claimed will have to be justified on cause-effect theory, which will not be easy to establish," said Ruby Singh Ahuja, senior partner, Karanjawala & Co. In countries like the US, such clauses are common as the contracts impose a range of good behaviour obligations on celebrities, say experts.

“When advising the company client, we strongly advise the need for such clauses as that keeps ‘bad behaviour’ in check, and when advising the celebrity, we sensitise them of the need and unavoidability of such clauses," said Ashlesha Gowariker, senior partner, Desai & Diwanji. “As the Indian market grows, and as celebrities become commodities for the company client, such clauses are becoming increasingly used in contracts." Apart from damages, companies are using two other kinds of clauses to ensure they are safeguarded -- an indemnity clause which requires the celebrity to indemnify the company for any losses he or she may cause; and a ‘moral clause’ which provides the right to terminate the contract if the celebrity indulges in any immoral or unethical behaviour.