An affiliate marketing agreement is a contract between a business and an individual or company who agrees to market or promote the business in exchange for a commission amount. According to corporate law and taxes, an affiliate is defined as a company that is related to another company often in a subordinate role. For companies to be affiliated, one must have control over the other or both must be controlled by a third company.
In the online marketplace, an affiliate refers to a person who will sell or promote the products of an online business, a term often referred to as affiliate marketing. Amazon uses multiple affiliates, referred to as "Amazon Associates," who sell items on their website. As part of the bargain, Amazon will take a small fee for their services. Both parties are able to earn income in this way.
In the broadcasting field, local televisions stations are often affiliates of larger national networks. In these agreements, stations will remain locally owned but will utilize both the national network's content and advertising. It is important to realize that an affiliate is not a part of the company that it is affiliated with, but rather, an independent contractor.
An affiliate agreement can be created for any type of business, whether you are a corporation or sole proprietor. Creating an affiliation with a company or individual with a large customer base and a proven track record is a great way to promote your business. Always draft the agreement so that each company will understand their obligations and responsibilities to avoid future legal conflicts.
For companies who have an affiliate program, you will often have a standard boilerplate agreement that is required for all new affiliates to sign. Two of the most vital parts of your agreement that should be included in your contract are the legal and monetary stipulations.
When creating an affiliate agreement, include specific items to make sure that your contract will protect your interest. Items that should be included in an affiliate agreement are:
There are some issues that will often come up when creating an affiliate marketing agreement, and these items should be considered when drafting an agreement. Some of the areas that should be addressed and clearly defined include:
Most affiliates may not read through the entire agreement, so it may be best to provide an affiliate FAQ or easily digestible version of the terms that they can easily read through in addition to the formal document.
If you need help with an affiliate marketing agreement, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.