Contract Structure for Resellers signing on behalf of end customer

We are a social media marketing company that uses a proprietary technology platform (not currently licensable) to manage large blogger programs for brands. Through our independent contractor relationships with our bloggers, we produce and aggregate content for brands. Very often we sell our programs through digital media agencies, PR agencies, large publishers, etc. to the end client.

I have been knee deep in contracting structure for months now and what continues to nag at me is the "privity" issue. (We often have these "middle men" resellers sign our Statement of Work on behalf of their clients.) What I'm unsure of is our power to require and enforce indemnity, grant of rights, etc. Our attorney is concerned about the same.

I know this is a complex issue but I was wondering if anyone has run into the same issue and how they handle it? Right now we're making the agency (who is reselling us) rep and warranty that they have all the necessary rights and permissions to sign on behalf of the end client (brand) but that seems so broad and unenforceable.

ANY advice is appreciated!

Answers

Keith Perry Director of Global Accounting • June 19, 2012

Danielle,

This probably would benefit from a call....I've touched similar stuff before, but would be more comfortable chatting through it to understand the details better.

That being said...
In theory, if the agency has agency, then you are fine. You might ask to see the documents that give them agency. They might be hesitant, but this should be something you push for.
If the agency doesn't have agency, and the brand does something that you'd prefer they not do, your contract with the agency will be enforceable (and if they have committed fraud, they are in trouble), but you are correct that you don't have a contract with the client.
However, depending on the nature of the content we are talking about, you might have enforceable rights outside of a contract, especially under copyright law. Outside of the US artists rights are even more stringent.

If possible, you do want the client to sign something. Even a click-through would be better than nothing.

Do reach out if you want to talk it through.

Cheers,

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Contract Structure for Resellers signing on behalf of end customer

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