Endorsing with Caution: What Celebrities Must Seek from Brands to Avoid Legal Liability in India

Introduction

Celebrity endorsements have long been central to brand marketing in India. Whether it is an actor endorsing a wellness product, a cricketer promoting financial services, or an influencer reviewing consumer goods, the persuasive power of fame has always been an integral part of Indian advertising.

However, with the evolution of consumer protection, advertising, and data privacy laws, this persuasive power now carries legal consequences. Under the current regulatory regime, endorsement is not a performance, it is a representation, and the person making that representation is legally accountable for its accuracy.

The Consumer Protection Act, 2019 (“CPA 2019”) and the Central Consumer Protection Authority (CCPA) Guidelines on Misleading Advertisements and Endorsements, 2022 have transformed the liability landscape. The focus has shifted from merely what the advertisement says to who says it and whether they verified it.

The Legal Framework: Why Liability Exists

The starting point is Section 21 of the Consumer Protection Act, 2019, which empowers the CCPA to act against misleading advertisements and their endorsers. The section authorizes the CCPA to:

• Order discontinuation or modification of misleading ads;
• Impose fines up to ₹10 lakh for first offences and ₹50 lakh for subsequent ones; and
• Prohibit endorsers from appearing in any advertisement for up to three years.

The CCPA’s Guidelines for Prevention of Misleading Advertisements and Endorsements (2022) further elaborate that endorsers must exercise “due diligence to verify the veracity of the claims being made in the advertisement.”

This effectively means that a celebrity cannot rely solely on the advertiser’s word or agency’s assurance. They must actively verify and document that the product claims are accurate and lawful. Failure to do so can expose the celebrity to penalties, endorsement bans, and significant reputational damage.

The Legal Principle: “Ignorance Is No Defense”

The shift in law is philosophical as much as procedural. Under the earlier regime, celebrities often claimed they were “merely performing” and unaware of product details. That argument no longer holds.

The law now imposes a positive duty of verification akin to a fiduciary standard of care, recognizing that consumers often trust an endorser more than the brand itself.

Therefore, to escape liability, an endorser must demonstrate that they:

1. Took reasonable steps to verify the product’s claims;
2. Relied on credible certifications or testing; and
3. Retained documentation evidencing such diligence.

The rest of this article outlines specific actions and contractual protections celebrities should demand before saying “yes” to a brand proposal.

Pre-Contractual Due Diligence: What to Ask and Verify

Before agreeing to any endorsement, a celebrity should request comprehensive information from the brand and its agency. The following checklist outlines the minimum diligence expected under Indian law and industry practice.

1. Product Legitimacy and Regulatory Compliance

Ask for:

• Regulatory approvals, licenses, or certifications (e.g., FSSAI for food, CDSCO for health/cosmetic products, BIS for electronics).
• Product testing reports or scientific substantiation of performance claims.
• Details of any pending regulatory actions, consumer complaints, or recalls.
• Why: If the product is later found defective or mislabelled, the endorser may be accused of misrepresentation unless they can show that due diligence was exercised. Example: A wellness drink claiming “clinically proven immunity boost” must have laboratory or clinical data to substantiate it.

2. Claim Substantiation and Advertising Material

Ask for:

• All scripts, visuals, taglines, and claim wordings before approval.
• A written representation that all claims have independent substantiation.
• Certifications from qualified experts (nutritionists, dermatologists, engineers, etc.) validating technical or scientific claims.
• Why: The CCPA has repeatedly emphasized that endorsements must be truthful, not exaggerated, and based on evidence. Endorsers who rely blindly on creative agencies risk liability for claims later found unsubstantiated.

3. Product Safety and Testing

Ask for:

• Safety certificates, toxicology or dermatology test results, as applicable.
• Declaration that the product complies with Indian and international safety standards.
• Why: Especially for food, cosmetics, or health products, product safety is non-negotiable. Even if no harm is caused, promoting unapproved or misleading products (such as “miracle cures” or “slimming teas”) can invite penalties.

4. Target Audience and Intended Use

Ask for:

• Confirmation of the target audience demographics.
• Written assurance that the product will not be marketed to vulnerable consumers (children, elderly, pregnant women) without appropriate disclaimers.
• Why: The CCPA Guidelines prohibit ads that “target vulnerable groups with misleading claims.” Celebrities endorsing products targeted at children or health-sensitive categories should ensure special caution.

5. Brand Reputation and Track Record

Ask for:

• Details of any ongoing litigation, regulatory notices, or consumer cases involving the brand or its affiliates.
• Confirmation that the brand has not previously been penalized for misleading advertisements.
• Why: Associating with a brand under investigation or regulatory scrutiny can result in reputational contagion and potential liability by association.

Contractual Safeguards: What to Include in the Endorsement Agreement

Once the initial diligence is satisfactory, the next layer of protection comes from the endorsement contract. Every celebrity must ensure that the agreement contains specific legal and indemnity protections, addressing potential liability under the CPA 2019 and CCPA Guidelines.

1. Brand Representations and Warranties

What to Seek:

• Written representation that all product claims are true, accurate, and substantiated.
• Warranty that the product and advertisement comply with all applicable laws and regulatory approvals.
• Undertaking that no part of the campaign misleads or violates ASCI, FSSAI, or other sectoral regulations.
• Why It Matters: This clause transfers primary responsibility for accuracy to the brand. If later challenged, the celebrity can demonstrate reliance on a lawful representation.

2. Indemnity Protection

What to Seek:

• A comprehensive indemnity clause requiring the brand to bear all costs, penalties, and damages arising from any claim of false, misleading, or deceptive advertising.
• The indemnity should cover regulatory fines, legal fees, and reputational management costs.
• Inclusion of “continuing indemnity” even after termination of the agreement.
• Why It Matters: This is the celebrity’s strongest contractual shield. Without indemnity, the endorser bears the financial and reputational burden of defending themselves against regulatory or consumer claims.

3. Due Diligence Declaration and Record Keeping

What to Seek:

• A formal “Due Diligence Declaration” signed by the celebrity or their management team confirming review of supporting materials.
• Copies of all product documents, certificates, and internal review notes retained for at least five years.
• Why It Matters: Such documentation can serve as evidence of compliance if questioned by the CCPA or ASCI. The regulator evaluates not perfection but reasonableness of effort.

4. Script and Creative Approval Rights

What to Seek:

• Contractual right to review and approve all ad scripts, voiceovers, visuals, and taglines before release.
• Assurance that no alterations can be made to recorded material without written consent.
• Why It Matters: Liability often arises from creative changes made post-endorsement (e.g., adding misleading claims in post-production). Retaining approval rights ensures control over final content.

5. Disclosure and Compliance Clause

What to Seek:

• Clause mandating compliance with CCPA Guidelines (2022) and ASCI Influencer Code (2023), including disclosure of material connections.
• The brand should ensure appropriate on-screen or caption disclosures (e.g., “#Ad”, “Paid Partnership”).
• Why It Matters: Failure to disclose paid partnerships can itself be treated as misleading advertising. The burden of compliance should lie with the advertiser, not the celebrity.

6. Termination and Exit Rights

What to Seek:

• “Termination for Cause” clause allowing the celebrity to exit immediately if the product faces recall, legal action, or controversy.
• “Morality clause” permitting termination if the brand engages in unethical, illegal, or harmful conduct.
• Why It Matters: This protects against reputational harm and liability by association. Once controversy arises, a prompt and lawful exit minimizes exposure.

7. Crisis Management and Cooperation Protocol

What to Seek:

• Agreement on procedures for handling regulatory notices, media queries, or social backlash.
• Brand responsibility to lead legal responses, public clarifications, and withdrawals if necessary.
• Why It Matters: Quick, coordinated action is critical to limit both regulatory and reputational fallout.

Disclosure Obligations: Transparency as a Legal Defense

Under the CCPA Guidelines and ASCI Code, disclosure of material connection between endorser and brand is mandatory. Celebrities should ensure that:

• Disclosures are clear, visible, and platform-appropriate;
• They appear in both the language and medium of the advertisement;
• The brand provides templates for such disclosures; and
• For digital media, disclosures are pinned or captioned prominently.
• Proper disclosure demonstrates intent to inform, which regulators consider when assessing liability. In essence, transparency is the celebrity’s best legal armour.

Red Flags: When to Walk Away

Certain product categories and practices carry inherently higher risk. Celebrities should exercise particular caution or decline endorsement opportunities in the following cases:

In these categories, the reputational risk often outweighs financial gain.

Record-Keeping and Documentation

A critical but often overlooked element of compliance is documentation. Celebrities should maintain a compliance dossier containing:

• Copies of contracts, scripts, and disclosure screenshots;
• Brand warranties and testing reports;
• Emails evidencing claim verification; and
• Any internal notes or legal opinions obtained pre-endorsement.
• During CCPA investigations, such records can serve as proof of “reasonable diligence” and mitigate liability.

The Role of Legal Counsel and Talent Managers

Celebrities should engage specialized legal counsel experienced in advertising and consumer law at the negotiation stage, not post-controversy. Lawyers can:

• Conduct independent verification of brand documents;
• Draft indemnity and termination clauses aligned with the CPA 2019; and
• Train talent managers on compliance checklists and disclosure norms.
• Talent management agencies, in turn, should integrate compliance vetting into their standard onboarding process for brand deals.

Emerging Risks: AI, Deepfakes, and Digital Identity

With the increasing use of AI-generated avatars and voice cloning, celebrities face new forms of reputational risk. Before lending their likeness for digital endorsements, they must ensure:

• Explicit consent terms covering AI use, reproduction, and modification;
• Restrictions on derivative or synthetic use of their image; and
• Data-protection assurances under the Digital Personal Data Protection Act, 2023.
• Failure to control digital likeness may result not only in legal exposure but also loss of control over brand narrative.

The Practical Standard: “What Would a Prudent Endorser Do?”

Regulators apply a test of reasonableness, not perfection. To avoid liability, a celebrity must show that they acted as a prudent endorser verifying claims, seeking documentation, ensuring disclosures, and documenting diligence. This threshold, while flexible, demands professionalism and accountability consistent with the influence they command.

Conclusion: The Age of Informed Endorsement

Endorsements today are not just creative expressions they are legal representations carrying measurable risk. For celebrities and influencers, compliance is not merely a defense mechanism; it is a reputation-management strategy.

By insisting on transparency, verification, and robust contractual safeguards, endorsers not only protect themselves from liability but also contribute to a more ethical advertising ecosystem.

The underlying message from India’s evolving law is clear:

• Fame no longer exempts responsibility – it enhances it.
• The most successful endorsers of tomorrow will not be those with the largest following, but those who combine influence with integrity, and charisma with compliance.

Quick Reference: Legal Checklist for Celebrities

Contributed by – Devanshi Rathod