When Social Media Brand Deals Sour: The Case for Promissory Estoppel in Influencer Agreements

In a world now driven by social media, the advertising industry has been taken over by Influencer brand deals and paid product placement.  Businesses, both small and large, are utilizing, and sometimes relying solely, on influencers to promote their products.  Most of these brand deals are negotiated through formal agreements and contracts, clearly outlining the actions expected by each party.  One common way businesses engage in this marketing is by providing influencers with their products in exchange for exposure.  This typically involves the influencer posting a photo or video on social media that reviews or recommends the product to their audience.  Thus, a review or recommendation from an influencer with a bigger audience is far more valuable.  However, for smaller businesses who do not have prepared contracts for this type of exchange, reliance on informal agreements by influencers to review a product can lead to misunderstandings.  This blog post explores a recent TikTok controversy, where this type of scenario unfolded involving beauty influencer Mikayla Nogueira and Matthew Stevens, the owner of Illusion Bronze, a custom self-tanning product.  Could promissory estoppel, a doctrine in contract law, provide a solution where there are informal agreements for a product review?

The Controversy: Mikayla Nogueira and Illusion Bronze

In 2022, Matthew Stevens, the owner of Illusion Bronze, reached out to beauty influencer Mikayla Nogueira via Instagram direct messages, seeking a video reviewing his custom sunless tanner line.  Following their interaction, Nogueira allegedly agreed to review the product “ASAP.”  Nogueira is known for her product reviews, and previously mentioned in one of her videos that one challenge with reviewing products from small, independent brands is their limited inventory.  These startup brands often struggle to handle the sudden surge in demand from her audience, leading to website crashes and quick sellouts, leaving her audience frustrated and feeling snubbed.

Relying on her promise to review the product “ASAP” and keeping in mind Mikayla’s concerns, Stevens, in the form of a loan to shopify, purchased $10,000 worth of inventory, preparing for this surge in sales that typically accompanies a product review from a major influencer like herself. Stevens waited some time with no review, reached out to Mikayla for reassurance that she would stick to her promise (and even receiving it).  After a few months, Stevens posted a video explaining the situation, accusing Nogueira of failing to honor her promise and claiming financial harm to his business with her to blame.

@whatstrending #mikaylanogueira has been called out on TikTok after #illusionbronze ♬ original sound – WhatsTrending

 Nogueira responded by stating that there was no formal agreement obligating her to review the product and that Stevens’ financial decision was his own.  The dispute escalated via public video responses to one another, with Nogueira insisting that Stevens was trying to rely on her audience for his success, while Stevens felt that her promise was the only reason he took his costly steps. Despite there being no formal agreement between the two requiring Nogueira to review the product in a certain time frame, this situation poses an interesting legal question: Could Stevens have a valid claim under promissory estoppel? Or is this just a risk of the business, as some seasoned public figures have commented:

@bethennyfrankel I’m team @Mikayla Nogueira ALL DAY errday🙌🏼🙂 #mikaylanogueira #influencerdrama #illusionbronze #mikaylanogueiradrama #productreviews #smallbusiness #joshuasanders #lymalaser #lyma #tiktokreviews #beautyinfluencer ♬ original sound – Bethenny Frankel

An implied agreement between the two?

Promissory estoppel is a principle in contract law that enforces a promise even in the absence of a formal contract, provided certain conditions are met.  Under this doctrine, if one party makes a promise, and the other party reasonably relies on that promise to their detriment, the promisor is estopped from arguing that the promise is unenforceable due to a lack of formal contract.

To succeed in a promissory estoppel claim, the following elements must be met:

1. A clear and definite promise. There must be a clear promise made by the promisor.
2. Reasonable reliance. The promisee must have reasonably relied on the promise.
3. The promisee must have suffered a detriment due to their reliance on the promise.
4. Injustice. Some remedy is necessary to avoid an injustice.

In this case, Nogueira’s message indicating she would review the product “ASAP” might be considered a clear enough promise to satisfy the first requirement.  Nogueira publicly expressed a valid concern about reviewing small businesses that are not capable of handing a large influx of orders.  Thus, Stevens’ advance of $10,000 worth of product might have been a reasonable step to take in reliance of her promise to review.  Since he was expecting a review from her, likely leading to a high influx of orders, he took steps to prepare his business for this scenario and avoid consumer frustration.  Lastly, Stevens’ financial loss from the unsold inventory and any interest on the loan to Shopify may be considered a detriment as a result of his reliance.  With those first three elements met, there is a possibility that injustice could only be avoided by some action and treating their exchange as a legally binding contract.

From a legal standpoint, Nogueira might defend her position by claiming that her statement was not a formal promise but merely an expression of intent.  This is especially possible given the fact that in her responses, she claimed that she “was going to get to it”, admitting that she took too long and should have made the video quicker. With that, there may be a valid argument that while there was some informal agreement, there was no urgency or deadline in place.  This fact might make it unreasonable to hold Nogueira liable for an implied contract that she did not technically breach (yet).  She might also argue that Stevens acted unreasonably by relying on her statement without securing a formal agreement or awaiting some notification from Nogueira that she had recorded the video and was preparing to post it.

This controversy raises important considerations about the relationship between influencers and brands, and how these type of marketing agreements should be arranged.  In traditional commercial settings, contracts mitigate the risk of situations like the Illusion Bronze controversy by ensuring that both parties understand their obligations.  However, social media interactions are far more casual.  The influencer economy may at times operate on less formal interactions, where DMs and verbal agreements may form the basis of understanding between parties.

Implications for Influencers and Brands

For influencers, the takeaway is clear: avoid making promises unless you are prepared to fulfill them, or at least have a standard process for intake of brand deals which clearly outlines obligations and timelines. This also serves as a lesson to influencers to be mindful that businesses, especially small brands, might be making decisions based on their interactions due to the fact that influencers may serve as a direct liaison to their target audience.  Simple steps such as including disclaimers in communications and clarifying any existence of obligations or guarantees every step of the way could draw the line in avoiding miscommunication and reliance.

For upcoming independent brands, let this be a lesson to formalize agreements before making financial decisions.  While it may feel natural to seek out influencer marketing informally on social media, small businesses should prioritize retaining their capital no matter what these interactions sound like.  There are real economic stakes when it comes to making investments based on words.

Conclusion

The economy is clearly evolving with social media, and along with it evolves the business efforts and strategies of brands everywhere. However, the legal principles governing these interactions remain grounded in traditional doctrines such as promissory estoppel.  These doctrines and the law may not evolve as fast as e-commerce, which could make the difference in an influencer’s liability to brands who seek exposure.  As influencer marketing becomes key in the online marketplace, trust and reputation are everything.  Therefore, both parties stand to benefit from clearer terms and understandings of their obligations to each other.