1. Scope of Work and Deliverables

The scope of work clearly defines what you're expected to create and deliver. This section should be as specific as possible to avoid misunderstandings.

What to look for:

• Number and type of content pieces (videos, photos, reels, etc.)

• Content specifications (length, format, orientation, resolution)

• Clear description of the product or service to be featured

• Whether the content is for organic use or paid advertising

• Required talking points or messaging

• Content submission deadlines

Red flags:

• Vague or overly broad descriptions of deliverables

• Unclear deadlines or unrealistic timeframes

• No limit on the number of revisions or edits

• Requirements that significantly exceed the compensation offered

Negotiation tip: Always negotiate for a limit on the number of revisions the brand can request. Without this clause, you could find yourself creating endless versions of content for the same fee.

2. Payment Terms

Payment terms outline how and when you'll be compensated for your work.

What to look for:

• Compensation amount and payment structure

• Payment timeline (Net 30, Net 60, etc.)

  • Net 30 for example means: Payment is due 30 days after the invoice date or completion of work

• Method of payment

• Conditions that must be met before payment

• Late payment penalties or fees

Red flags:

• Excessively long payment terms (Net 90+)

• Payment contingent on performance metrics

• No provisions for late payments

• Vague payment conditions

Negotiation tip: If a brand insists on Net 60 payment terms (meaning you'll receive payment 60 days after completion), negotiate for a higher rate to compensate for the extended waiting period, or include a late payment fee clause.

3. Content Ownership and Intellectual Property Rights

This critical section determines who owns the content you create and how it can be used.

What to look for:

• Who retains copyright ownership

• Licensing terms if you retain ownership

• Usage rights granted to the brand

• Platforms where content can be used

• Duration of usage rights

• Geographical limitations on usage

Red flags:

• Perpetual usage rights without adequate compensation

• Broad or unlimited usage rights across all platforms and media

• Ability for the brand to edit or modify your content without approval

• No additional compensation for extended usage

Negotiation tip: When discussing usage rights, consider implementing a tiered pricing structure. For example, organic social media usage might be included in your base rate, while paid advertising, website usage, or print materials would require additional fees.

4. Exclusivity Clauses

Exclusivity clauses restrict your ability to work with competing brands for a specified period.

What to look for:

• Clear definition of what constitutes a competing brand

• Duration of the exclusivity period

• Limitations on the type of content covered by exclusivity

• Additional compensation for exclusivity

Red flags:

• Overly broad definition of competitors

• Long exclusivity periods without adequate compensation

• Exclusivity that extends beyond reasonable categories

Negotiation tip: If a brand requests exclusivity, always ask for additional compensation and ensure the clause has a clear end date. The more restrictive the exclusivity, the higher the compensation should be.

5. Content Approval Process

This section outlines how and when your content will be reviewed and approved by the brand.

What to look for:

• Timeline for content review and feedback

• Clear definition of approval criteria

• Process for addressing requested changes

• Provisions for final approval

Red flags:

• Undefined or subjective approval criteria

• No timeline for the brand to provide feedback

• The ability for the brand to reject content without specific reasons

• No provisions for what happens if the brand repeatedly requests changes

Negotiation tip: Negotiate for a "kill fee" clause that guarantees you'll receive partial payment even if the brand ultimately decides not to use your content after you've created it.

6. Termination and Cancellation

This section defines how and when either party can end the agreement.

What to look for:

• Conditions under which either party can terminate the contract

• Notice period required for termination

• Compensation if the project is cancelled

• Ownership of any content created before termination

Red flags:

• One-sided termination rights that only benefit the brand

• No compensation for cancellation after work has begun

• Excessive notice periods for termination

Negotiation tip: Ensure the contract includes a clause that guarantees at least partial payment if the brand cancels the project after you've begun work or incurred expenses.

7. Indemnification and Liability

These clauses determine who is responsible for potential legal issues related to the content.

What to look for:

• Scope of liability for each party

• Indemnification provisions

• Limitations on liability

• Insurance requirements

Red flags:

• One-sided indemnification clauses that place all liability on you

• Unlimited liability provisions

• Requirements for insurance coverage beyond what's reasonable

Negotiation tip: Push for mutual indemnification where both parties share responsibility appropriately. If the brand insists on you carrying all liability, negotiate for higher compensation to offset the increased risk.

🚩 Major Red Flags in UGC Contracts 🚩