You need an affiliate agreement to launch your affiliate program. It sets out the frame for your relationships with partners by clear terms and conditions.
But it’s not easy to create, especially when you don’t have a legal background.
Don’t worry; we’ll get you covered in this article!
Going through with us. You will learn the basic parts of an affiliate program agreement template. You will also know why and when you should use it.
Let’s discover now!
What Is An Affiliate Agreement?
An affiliate agreement defines the legal relationship between a business and its affiliates. In this relationship, affiliates promote the business’s products or services and get commissions in return. The business holds the affiliate program, earns affiliate sales, and pays them rewards.
This agreement includes the terms of the relationship. It lays out the rights and responsibilities of both parties.
As a merchant running an affiliate program, you will need this agreement to set up the legal frame of your partnership. It will help you to ensure a smooth collaboration and minimize misunderstandings. Also, it assists in fostering a mutually beneficial relationship.
Usually, the agreement is in force when an affiliate joins your program, and you approve this engagement. You may need to create a standardized boilerplate agreement and require all new affiliates to e-sign or agree when joining.
For some examples of affiliate agreement templates, you may view the Shopify Partner Program Agreement. You may also check the Hubspot Affiliate Program Agreement.
Affiliate Program Agreement Template: 12 Essential Sections To Include
Definitions
The definition term is usually the first provision in every legal contract. This part specifies your business’s legal name and contact details. It also defines your affiliates. It establishes the identities for legal and communication purposes.
This provision also defines key terms. These include “affiliate link”, “affiliate policies”, “affiliate application”, and other relevant terms. Such definitions ensure everyone has the same understanding when reading the agreement.
Legal jargon can make documents complex. So, clear explanations will help affiliates understand. In other words, it fosters unambiguous communication.
Partnership Nature
This section states the agreement’s purposes. It also clarifies the affiliate relationship between the parties.
It’s crucial to emphasize that an affiliate operates as an independent contractor. They are not an employee (e.g., a sales representative) of the business or a joint venture.
Defining this role clearly exempts your business. It frees you from providing affiliates with employee benefits under laws.
In addition, it also relates to your liabilities with their actions when promoting. If they are independent contractors, they will be accountable for any consequences of their actions. Otherwise, your business might be the entity responsible for those if an employment relationship exists.
Affiliate program process clarification
This provision provides a comprehensive overview of your affiliate marketing program. It covers the application process and who is eligible. It also covers how to get links after approval and how to promote products.
With this clause, affiliates can see the criteria and steps needed to join your program.
Criteria may include specific requirements. For example, a minimum number of followers or website traffic. The affiliate’s style might also be considered. You may also specify that the approval is at your sole discretion.
Usually, the affiliate program is open to the public. The application details and forms are available on the company’s website or related networks.
The company then assesses each application. They may ask more questions and decide to accept or reject the applicant.
Each company has its unique application and acceptance procedure. This part of the agreement explains the steps. It covers waiting time periods and the type of response applicants can expect.
It’s also important to specify the steps to get affiliate links and promote them. You may need to detail any specific conditions affiliate partners must meet when using the links.
This clarity helps ensure affiliates are fully aware of how they can participate in the program and how they can work thereafter.
Non-exclusivity Clause
In almost every case, the relationship between businesses and affiliates is not exclusive. This clause clarifies such nature.
Affiliates usually create articles or post blogs. They list many products with reviews and comparisons. They include your affiliate link and others. They only earn a commission, not any fixed or initial affiliate fees like in other relationships. So, they need to promote other brands’ products too.
Responsibilities of both parties (affiliate and business)
Outlining the responsibilities of each party involved is critical in any contract. Clear setting out duties ensures that both parties understand your respective roles.
That helps to contribute to the smooth operation of your marketing program. It also potentially increases prospective customers and sales for your business.
For the affiliate, responsibilities may include guidelines on how to do promotions. They must also follow ethical marketing practices.
On the merchant’s side, the agreement might specify the support provided to the affiliate. For instance, providing promotional materials or access to tracking software.
This clarity in roles and expectations is key to a successful and mutually beneficial partnership, not for the sole benefit of any party.
Commission and Payment Terms
This section is usually vital for affiliates. It regulates their pay for their affiliate marketing efforts.
It stipulates how much affiliates can get on customer purchases, how to make them, and when to expect payment. Also, this section needs to specify any conditions affecting commission eligibility.
In this part, you may need to cover the following aspects:
- Criteria for commission eligibility: This regulation tells affiliates how to qualify for a commission and what actions or benchmarks are required. For instance, using content that includes discrimination on sexual orientation isn’t accepted.
- Commission structure: This outlines the types of activities that earn commissions (e.g., sales, qualified leads). It should also detail the commission rates and any conditions for rate changes. If rates are subject to change, describe the process for renegotiation.
- Bonus incentives: Clarify if there are any special bonuses for affiliates who meet certain targets or conditions, like enhanced commission rates.
- Cookie duration: Define how long after a click on an affiliate link the affiliate is eligible to earn a commission.
- Fraud Prevention: Stipulate what constitutes fraudulent activity and how it impacts commission eligibility.
- Payout Requirements: List any conditions an affiliate must fulfill before receiving payment, such as providing tax and banking information. Also, let them know how they can receive their payments and payment schedules.
Link and Brand Promotion
This section specifies the rules for affiliate link promotion and brand representation.
In this part, you should list the dos and don’ts for promoting affiliate links. Also, say where links are allowed and prohibited.
You should also provide guidelines on using your brand. These include trade names, affiliate trademarks, domain names, and messaging in promotions.
The guides cover intellectual property rights. They detail the use of logos, slogans, domain names, and product names owned by the brand. They are also necessary.
Also, tell your affiliates about approved ad methods, restrictions, and the results of unauthorized use of your brand’s assets.
Affiliate Tracking
In this regulation, explain the technology used for monitoring affiliate activity.
It includes whether your business uses affiliate management software. It also covers third-party networks or cookies for tracking sales.
It should also describe how your tracking system operates. It should explain how affiliates can use it to check their performance and commission status.
Confidentiality Agreement
When working with affiliates, you may need to share private information. This could include customer lists or unreleased products.
It’s important to label the rights to such business, financial, or customer data as proprietary rights. This clause is for protecting your business secrets.
Termination or Suspension
This section should clarify the length of your affiliate marketing agreement. It should cover the reasons it could end early or be suspended. It should also explain the process for any changes to the agreement.
In addition, it needs to outline the scenarios that might lead to a suspension. Say what happens after the agreement ends. This is especially about any unpaid commissions or affiliate accounts.
Legal Stipulations
This section should address several legal aspects to make the entire agreement. They include the applicable laws, dispute resolution methods, and the authority body for lawsuits.
The provision should also include an indemnification clause. It will protect each party from liability due to the other’s actions. It should also include limits on liability.
Signatures
This is the final part and the must-have part for the contract to be binding. Include the space for both you and your affiliate to sign and date.
The agreement can only come into force if both parties sign.
Purpose of Affiliate Marketing Agreement
An affiliate marketing agreement makes a clear and good relationship. It’s between your business and affiliates. It outlines the permissible actions for affiliates when promoting products or services. This way, they know what they can and can’t do. It ensures their activities are within the acceptable scope and protects your brand’s reputation.
The agreement also serves as clear instructions for affiliates about the program. By looking at this document, they can see commissions, payouts, and cookies. They can see how to promote and what materials to use. Thanks to that, your affiliates can have the right expectations when joining. It helps to make a solid foundation for a sustainable relationship.
The agreement sets clear regulations. It says what affiliates can and can’t do. It also protects your business. In case of any affiliate fraud, you can enforce its terms to address dishonest practices.
Regarding protection, the agreement also ensures that affiliates abide by relevant marketing laws. It safeguards your business from legal risks resulting from non-compliance by affiliates. In other words, it saves you from liabilities arising from affiliates’ actions.
You will need to create your affiliate program agreement when establishing your affiliate program. It’s an indispensable part of your program.
Furthermore, you have to require all new affiliates to e-sign or agree to the document when joining so that it will be effective and binding. It should also be regularly updated to reflect the evolving nature of the program.
Who Is Responsible For Creating Affiliate Marketing Agreements?
As a merchant operating an affiliate program, you will be responsible for making the agreement.
If your business has an in-house legal department or staff, you can request them to create the draft. Otherwise, you can hire external lawyers for this piece of work.
Either way you choose, you will need to describe your program’s work for them for their clear view of the business side. You may also need to show them your ideas on some specific matters and requirements like commissions, payouts, eligibility, etc.
If you choose to handle it yourself, it’s helpful to check through the terms and conditions of other programs. Keep in mind the main sections mentioned in the earlier part for a comprehensive agreement. Also, research the relevant laws. Then, carefully draft and review the agreement. This process ensures it meets all needed legal and practical requirements.
Wrapping up
To conclude, affiliate agreements are essential for affiliate programs. It ensures the program’s smooth operations and safeguards the interests of all parties involved especially businesses.
With this guide, you might have known the fundamental elements of such a contract. You may also view several affiliate program agreement templates to have a practical view.
Then, if you intend to start an affiliate program, don’t forget this important part of work!
