In the entertainment world, companies (“Companies”) that use the services of individuals (“Individuals”) often seek to protect their brand with so-called “morality clauses.”

This practice is nothing new. Morality clauses appeared during the silent film era and gained popularity during the McCarthy era, so that they are found today in a variety of contracts and industries.

In fact, morality clauses, when invoked, can have an effect not only on Companies and Individuals, but also on the various stakeholders in a project, such as artists, financial institutions, distributors and other business partners.

That said, morality clauses vary depending on the elements that are negotiated between the parties.

Let’s take a closer look at their main characteristics:

Definition of Immoral Conduct: The definition of “immoral conduct” varies broadly and subjectively to narrowly and objectively.

Some morality clauses apply to acts that “harm the reputation of the Individual or subject them to scandal or ridicule, or offend a significant portion of the community,” while others apply only to specific types of conduct, such as criminal acts.

The determining legal factor is moral turpitude. This is an act or behavior that seriously violates currently accepted norms in the community.

Companies should therefore ask themselves whether they prefer a broad and potentially all-encompassing definition but subject to differing interpretations (which could lead to litigation) or a definition which, although more limited, offers greater certainty as to its application.

Time of Occurrence of Immoral Conduct: Some morality clauses apply only to conduct that occurred during the term of the contract, while others also cover conduct committed before the start of the contract but disclosed or learned during the term of the contract.

Decision-Making: The broadest clauses generally allow Companies to make a unilateral discretionary decision.

Some clauses may require the Company to conduct a private and confidential investigation before making a decision, while others may require the decision to be submitted to a private and confidential arbitration process.

Although such a process may be more costly, it maximizes the chances of discovering all the relevant facts, thus making it possible to achieve the fairest possible outcome.

Remedy: The main remedies arising from a breach of the morality clause allow the Company to protect its “goodwill.”

Among these remedies, the Company has the right to terminate the contract with the Individual as well as the right to remove their name from the credits of the program, services or product.

These measures allow the Company to distance itself from the Individual and condemn their conduct.

In addition to remedies aimed at protecting their “goodwill,” Companies may include clauses in contracts allowing them to obtain compensation for any damage suffered as a result of the Individual’s conduct covered by the morality clause.

By Sam Coppola et Jon Mechanic