Moral Turpitude Clause & Celebrity Disasters

Why is a Moral Turpitude Clause in Every Endorsement Deal Contract?

What do Charlie Sheen, Tiger Woods and Rashard Mendenhall all have in common? All three were involved in legal disputes based on the moral turpitude clauses in their respective contracts.

A Clause to Save Your Brand’s Cause

A moral turpitude clause basically accounts for the fact that sometimes people make mistakes – or worse, just aren’t particularly responsible individuals to begin with – and that certain brands or businesses may not want to be associated with such persons following illicit behavior. Sometimes it’s difficult to judge character, and sometimes the opportunity is just too good to pass up, but often a moral turpitude clause is there to save business relationships turned sour due to one party’s misbehavior.

Remember when Charlie Sheen was winning? Remember Tiger Woods’ Escalade? Remember when Rashard Mendenhall publicly questioned celebration of Osama Bin Laden’s death? Each of these incidents led to a legal dispute, because each contract contained a moral turpitude clause that one party thought had been violated.

How the Moral Turpitude Clause Works

Let’s talk athletes for a bit. A large portion of many sports icons’ revenue comes via endorsement deals. The most popular athletes, and some quasi-famous ones, often tout massive contracts with a variety of companies eager to put the individual’s face on their brands.

Say a famed and beloved athlete has one such contract with a sneaker brand – the kids love him, he’s making millions through commercial deals and he is plastered on every street corner and television set in the country. Let’s say said athlete is consequently arrested with drug paraphernalia, narcotics intended for sale and weapons in his vehicle. That’s not a good look in front of the kids. It makes sense that the company would want to get out of it’s contract with the athlete – you don’t want a drug dealer selling shoes to the children. That’s where the clause comes in handy. The individual’s crime is immoral, and thus a violation of the clause and subsequently the contract, offering a perfect path out.

However, other times, such as in the case of Mendenhall, the action isn’t so much criminal as it is disagreeable. In his case, the suit was eventually settled privately. Whether something constitutes a violation of a moral turpitude clause is a case-by-case situation, but including one in a contract is often helpful for maintaining brand integrity through a crisis.