Sponsorships contracts - Unknown, but still loved?

With his work the author wants to investigate the legal problems concerning the closing, execution and termination of sponsorship agreements. The main objective of the research is to determine the existence of an (independent) cross-sector sponsorship concept and its (legal) consequences. Or, formulated differently, what legal framework is applicable to sponsorship as an independent legal concept? In turn, this research objective is divided into a number of sub-questions: 1) What is sponsorship and how is it aligned with other marketing instruments and fundraising techniques? 2) How to translate a sponsorship transaction into legal terms and what possible problems do parties encounter in this regard? 3) Is there – and if so: to what extent – a legal protection for the (potential) value created by the sponsorship transaction?

Our research shows that sponsorship is a marketing technique, used by companies (or non-economic institutions) to generate a promotional association with a sponsored object. The sponsor provides money, goods or services to the sponsored party in exchange for one or more means to associate himself with the aforementioned object.

On a legal level the sponsorship transaction is therefore constructed as a reciprocal agreement between the sponsor and the sponsored party. An important contractual obligation of the sponsored party is his obligation to facilitate the promotional association between the sponsor and the sponsored object. Several sponsorship bans and restrictions are also analyzed extensively in this regard. In addition to this obligation, the sponsored party is also usually bound by a non-association obligation.  After all, the sponsor wants to be exclusive to a certain extent in order to distinguish himself (or: his products) from its competitors or to avoid promotional overexposure. Parties also value each other’s good image. In the light of their promotional association a negative image on the part of one of them can influence the image of the other party (or: the sponsored object). That is why in principle each of the parties also has the obligation to withhold himself from blameworthy behavior that can bring the other party (or: the sponsored object) into disrepute. Specific obligations could also be found in naming-rights sponsorship and media sponsorship agreements, two particular types of sponsorship transactions.    

Because the closing of a sponsorship transaction only makes sense insofar as the (potential) value created by the promotional association is in some way protected, we also discuss the instrument of ambush marketing and the various ways to take action against it. As a sponsorship related figure, ambush marketing refers to those situations in which - intentionally or unintentionally - a promotional association is generated, without any permission hereto.