Creator Legal Risks: Contracts, IP, and Business Formalization

Key Quotes

"Usage rights often aren't clear or are vague. As the industry matures, more people know what to look for. They have advocates and smarter agents and managers who are watching this, sometimes attorneys who are also having eyes on this, and the contracts are getting better. But in the old days, especially in the beginning, it was a wild west. There were terrible contracts, thin contracts, contracts that were cobbled together as if you were hiring someone to do a commercial, like you were Ford and you were going to have a talent on screen."

Brittany Ratelle explains that clarity in usage rights has improved as the creator economy has matured. She highlights that early contracts were often poorly constructed, reflecting a "wild west" environment where creators were not adequately protected. Ratelle notes that increased advocacy and legal oversight have led to better contract terms over time.

"On payment, payment should be net 30, maybe. I take net 60 if it's a really big, juicy contract, but I've seen net 90, I have seen net 180, and I'm like, 'Never 180.' There is a celebrity marriage that has started and ended within the term of this contract. You want to do a 180? Walk away from this deal because it's like, I'm not Bank of America, I'm not your business banker."

Ratelle advises creators to be wary of excessively long payment terms, such as net 90 or net 180. She emphasizes that creators should not function as banks for brands and that such extended payment windows are unreasonable. Ratelle suggests walking away from deals with such terms to protect their financial interests.

"Exclusivity you always want to narrow. My trick here that I always redline is, make them name the competitors. Do not accept them to be able to be like, 'Hey, you can't do any other of our competitors for two months or three months.' I don't know who that is, and my list might even be bigger than their list, which is worst-case scenario."

Ratelle recommends that creators negotiate to have brands specifically name their competitors in exclusivity clauses. She explains that this prevents vague restrictions and ensures creators know exactly which brands or products they cannot work with. Ratelle suggests this approach provides greater clarity and flexibility for the creator.

"The only way to actually own your audience is an email list. You can export that, you can put it on a hard drive, you can take it with you, and Zuck can't just take that from you as it were."

Ratelle asserts that an email list is the only truly ownable form of audience capital for creators. She explains that unlike social media accounts, email lists can be exported and retained independently. Ratelle highlights this ownership provides security against platform changes or account suspensions.

"The biggest thing or just personal pet peeves, having just like a Gmail address. Get one that goes to your domain because to me that screams, 'I'm not a professional, I'm not running a real business.' And also it helps your email deliverability. So it should be at your, you know, it should be hello or whatever, hi your name at your actual domain instead of just, you know, pay the five bucks for Google Workspace, guys. Come on, let's grow up. It's not that hard."

Ratelle expresses a strong preference for creators to use professional email addresses associated with their domain name rather than a generic Gmail address. She argues that a custom domain email signals professionalism and seriousness about running a business. Ratelle also notes that such addresses can improve email deliverability.

"The biggest deal is to, as you're hiring, make it clear what the role is and make sure you're not misclassifying. That's probably the number one risk. Misclassification means you think someone's a 1099 contractor, a freelancer. They think they're a 1099. Who disagrees? The state of California."

Ratelle identifies misclassification of workers as a primary risk for creators when hiring. She explains that mistakenly classifying someone as an independent contractor (1099) when they should be an employee (W2) can lead to significant legal and financial penalties, particularly citing California as a state that strictly enforces these regulations. Ratelle advises creators to ensure roles are correctly categorized to avoid these issues.