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On November 30, 2010, the Kardashian sisters terminated their licensing agreement with MasterCard for the “Kardashian Kard” after only three weeks–the card was launched on November 9, 2010–due to the negative publicity surrounding the card’s high fees. The Kardashian-endorsed prepaid debit card targeted teens as young as sixteen years-old, and allowed parents to monitor and limit their teens’ spending. But because of the card’s high fees the sisters were attacked for lending their name to the credit card aimed at teenagers. Most notably the card has a $59.95 fee for six month use and a $99.95 fee for twelve months, neither fee included any actual money put on the card.
On November 26, Connecticut Attorney General Richard Blumenthal announced an investigation to determine whether the Kardashian Kard’s “egregious” fees violate consumer protection laws. In a letter to the University National Bank, the Attorney General expressed his concern over the card’s high fees and its strong appeal to “financially unsophisticated young adults.” The Attorney General further observed that because of the outrageous fees “no family can ‘keep up with the Kardashians.’”
In an attempt to maintain a positive public image following Attorney General Blumenthal’s announcement, the Kardashian sisters decided to cancel their licensing agreement, which granted the use of their names, photographs, likenesses and endorsements in connection with the debit card. In the termination letter, the Kardashians’ attorney emphasized the damaging effect on the Kardashians’ “positive public persona” caused by the negative response to, and potential illegality of, the prepaid debit card.
To most celebrities, including the Kardashian sisters, their reputation or “image” is one of their most important assets. As such, when entering the licensing agreement for the Kardashian Kard, the sisters likely included a provision that provided for an immediate right to terminate. By including such a provision, celebrities can terminate their contractual obligations in order to avoid a damaging impact on their reputation. Thus, assuming the Kardashians’ licensing agreement included an immediate right to terminate, the sisters have the legal right to end the licensor-licensee relationship because of the Kardashian Kard’s damaging effect on their reputations.
– Carolina Blanco
Tagged with: celebrities • consumer protection laws • contracts • credit • endorsement • entertainment • fees • financial • government • identity • image • immediate right to terminate • intellectual property • Kardashian • Kardashian Kard • licensing agreement • media • persona • progress • publicity rights • reputation • Richard Blumenthal • termination
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