Manny Pacquiao got some bad news this week when Nike Inc. decided to nix its multimillion-dollar sponsorship of the boxer because of homophobic comments he made while running for political office in his native Philippines. He joins a long list of celebs, from Tiger Woods to Kate Moss, whose public conduct has sent sponsors fleeing.
Legally speaking, how did Nike wiggle out of the endorsement? The likely answer is that Nike invoked a so-called morals clause, meant to ensure an outside partner’s good behavior while he or she is representing the company. These clauses are common enough that in-house counsel should probably familiarize themselves with them.
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