An affiliate agreement outlines the terms under which partners will earn commission for every qualified action they refer to your company, making this one of the most crucial steps in protecting your brand from affiliates who make false claims, use fraudulent tactics or otherwise damage its reputation.
Definitions
If an affiliate will be representing your products or services, it's essential that their role and responsibilities are clearly defined. This should include outlining their scope of work, anticipated duties and any compensation terms that apply.
Copyright protection is another integral element of an affiliate agreement. To avoid becoming the next Samsung, Apple, or Microsoft and engaging in costly legal battles over copyrighted material that you promote products with, include a clause stipulating how copyrighted content should be treated during product promotion.
As part of any affiliate agreement, it's crucial that a confidentiality clause be included. When working with individuals or companies that have access to your audience, it's vital that any confidential information, like customer lists, upcoming products and marketing strategies isn't released publicly - this prevents customers being taken by competitors as well as damaging reputations - especially important if using affiliates as email promotion partners for products and services.
Summary
An affiliate marketing agreement establishes compensation paid to affiliates for driving traffic to their company's website. Usually this amount is calculated as either a percentage or flat fee per sale but this may change.
Contracts should outline how an affiliate will promote the products or services of a business, including which platforms they can use to share links with their audience. Some companies prefer that trademarks not appear in paid search keywords, ad copy, display URLs, emails or text messaging campaigns.
Bonus structures should also be included as they will motivate affiliates and ensure they receive what they deserve after working hard. In addition to bonus structures, commission rates and payment terms should also be detailed within the contract, while a confidentiality clause ensures that information like supplier lists or product launches do not leak out to competitors.
Exclusions
An agreement should outline which products and services will be included in the partnership as well as commission rates for sales or leads generated. It should also provide details regarding payment schedules such as frequency and method as well as whether VAT (Value Added Tax) applies.
Terms and conditions will outline how any disputes will be settled, which includes issues like breach of contract. They also serve to indicate that an affiliate is not an employee entitled to benefits such as holiday pay and pension contributions from their company.
A company will want to ensure that any agreement allows its affiliate to promote direct competitors of its brand, protecting its brand reputation by including an agreement-breaching clause regarding affiliation with rivals as a breach. They might also consider including a confidentiality clause.
Termination
Affiliate marketing agreements (or referral agreements) are contracts between two parties that enact compensation for sending traffic one party's way. Such arrangements provide a transparent framework for potential lucrative partnerships while setting out key terms and conditions which need to be carefully considered by both parties involved.
An effective agreement should clearly define the scope of their relationship and outline any promotion permitted, along with compensation details, such as commission rates and any possible adjustments. Including a confidentiality clause is also crucial, since affiliates frequently share sensitive data such as supplier lists, new product development plans, customer lists or marketing strategies among their vast audiences.
In your agreement, it should also include a dispute resolution mechanism that outlines how disputes will be settled - be it mediation or arbitration - as well as where any legal proceedings would take place and provide indemnification in case a party is found liable for legal damages.
