Affiliate Marketing Agreement Template [Free] 

Disclaimer: The following document is provided as a reference resource and should not be considered as legal advice. While it offers a general framework for understanding affiliate agreements, it may not address all legal nuances specific to your situation. For accurate and personalized guidance, we strongly recommend seeking advice from a qualified legal professional.

What is an affiliate marketing agreement?

An affiliate marketing agreement is a contract between a business (the “company” or “merchant”) and an individual or organization (the “affiliate”) that sets the terms and conditions for promoting the company’s products or services in exchange for a commission or referral fee. 

This type of agreement clarifies the relationship between the company and the affiliate.  

Affiliate marketing agreements define each party’s roles, responsibilities, and compensation structure. Any later interest conflicts or disputes can be solved based on this contract. 

A thoughtful agreement can be seen as the affiliate program’s backbone. It allows the program to run smoothly and helps affiliates understand the allows and the possible limits to their promotional efforts, reassuring them of equitable benefits.

Legal Requirements of an Affiliate Marketing Agreement   

Contracts that don’t address compliance can lead to legal trouble. It typically includes the following considerations: 

An online affiliate agreement between affiliates and a merchant should follow the rules of the jurisdiction specified in the agreement, which is typically the location where the merchant is based or where the contract specifies as governing law.

Here are some aspects that, considered the best practices, should be included in the affiliate program:

• Consumer data protection: Affiliate activities are subject to various legal data requirements, such as FTC guidelines in the U.S. and GDPR in Europe. 
• Advertising regulations: As with most marketing activities, affiliate activities are subject to IP law. For example, patent law, trademarks, copyright regulations, and CAN-SPAM. Merchants don’t have direct responsibility over how affiliates advertise, but bad practices of marketing activities could harm affiliate reputation.
• Tax: Affiliates take the responsibility to pay taxes for the commission they earn by promoting merchants’ products. As the merchants carry no responsibility for the affiliates’s taxes, they should clarify that the merchant is not responsible for withholding any taxes on behalf of the affiliate marketer and that the affiliate marketer is solely responsible for their own tax liabilities.
• Laws of contract: Including correct formation of valid contracts and dispute resolution.

Affiliate Program Agreement Template 

This Affiliate Agreement (“Agreement”) is made on this [Day] day of [Month], 2021 (“Effective Date”), by and between Orlando Fashion LLC (“Company”), a [State/Jurisdiction] limited liability company, and [Affiliate Name], an independent contractor, with its principal place of business at [Affiliate’s Address] (“Affiliate”). The Company and the Affiliate may be referred to individually as a “Party” and collectively as the “Parties.”

WITNESSETH:

WHEREAS, Company is engaged in the business of entertainment production, e-commerce, and commercial production services;

WHEREAS, Company has developed, owns, or offers for purchase various programs, products, services, and events, either hosted by or contracted by the Company;

WHEREAS, Company has established an Affiliate Program (the “Program”) through which participants can promote the Company’s various programs, products, services, and events offered by Company or its contracted partners, including merchants, brands, and retailers;

WHEREAS, Affiliate has expertise in [industry or specific skill] and an interest in affiliate marketing;

WHEREAS, the Parties wish to enter into an agreement to provide for the non-exclusive advertisement and promotion of the Company’s various programs, products, services, and events by Affiliate, and to share certain revenues derived from sales resulting from these promotions;

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth in this Agreement, the Parties agree as follows:

1. Incorporation of Whereas Clauses

All whereas clauses stated above are incorporated herein by reference and form an integral part of this Agreement.

2. Term

The term of this Agreement (“Term”) shall commence on the Effective Date and continue until terminated by either Party in accordance with the terms of this Agreement.

3. Definitions

The following definitions apply throughout this Agreement, with the understanding that product, program, and service names may change over time:

a. Account
The specific record within the Program where sales commissions are tracked, reported, and calculated.

b. Company Marketing Materials or Marketing Materials
All promotional content created, owned, or approved by the Company for use by the Affiliate, intended to promote the Company’s various programs, products, services, and events hosted or contracted by merchants, brands, or retailers.

c. Company Website
Refers to https://www.example.store and any additional websites or extensions specified by the Company.

d. Company Product or Company Products
This includes all programs, products, services, and events hosted or contracted by merchants, brands, retailers, and other entities, as well as those owned and created by the Company, that the Company authorizes the Affiliate to promote under this Agreement. The Affiliate understands that the Company may change the content or details of its products at its sole discretion.

e. Confidential Information
All information provided by one Party to the other that is not publicly disclosed by the providing Party, including but not limited to financial data, marketing strategies, customer lists, and any information that would be reasonably expected to be confidential. This also includes the terms of this Agreement.

f. Gross Revenue
Total revenue received from the sale of one or more Company Products by the Affiliate.

g. Net Revenue
Gross Revenue minus any refunds, taxes, or other expenses related to the sale.

h. Sales Commission
A percentage of Net Revenue from sales generated by the Affiliate through their marketing efforts, with sales prices set by the Company. The Company reserves the right to adjust these prices at its discretion.

i. Proprietary Rights
All rights held by a Party in its products, services, programs, and confidential information, including copyrights, trademarks, patents, trade secrets, know-how, software source codes, and proprietary algorithms, whether arising under U.S. or international law.

j. Customer
A person who purchases one or more Company Products during the Term of this Agreement due to the Affiliate’s promotional efforts, which include referrals to the Company Website.

k. Visitor
Any person or user who accesses the Company Website through the Affiliate’s website, email, or other means of promotion.  

4. License

The Company grants Affiliate a non-exclusive, limited license to use the Company Products and Marketing Materials during the Term of this Agreement, solely for the purpose of promoting the Company’s Products. All images, technology, and content provided to the Affiliate are and shall remain the sole property of the Company. No part of these items is deemed assigned or licensed to the Affiliate, except as explicitly stated in this Agreement. All intellectual property rights, including but not limited to trademarks, copyrights, patent rights, trade names, and service marks, remain the exclusive property of the Company. The Affiliate is not permitted to modify, rebrand, or adapt the Marketing Materials without written permission from the Company. The Affiliate acknowledges that it has no right, title, or interest in these items other than the limited license granted by this Agreement. The Affiliate agrees not to challenge the Company’s ownership of these rights or attempt to register any related trademarks, brands, or names.

5. Termination

This Agreement may be terminated by either Party as follows:

a. For Cause: Either Party may terminate this Agreement immediately if the activities or statements of the other Party materially expose the terminating Party to civil or criminal liability, or if the other Party materially breaches this Agreement and does not cure the breach within seven (7) days of receiving written notice.

b. Without Cause: Either Party may terminate this Agreement by providing thirty (30) days’ prior written notice to the other Party.

c. Upon termination, the Affiliate is entitled to receive any Sales Commissions earned up to the date of termination.

d. The Company may terminate if the Affiliate fails to keep current with the Company’s website, training, or other educational materials.

6. Obligations of the Company

During the Term of this Agreement, the Company agrees to:

a. License Marketing Materials to the Affiliate and provide updates when needed for the promotion of the Company’s Products.

b. Notify the Affiliate of any changes or updates to the Marketing Materials or Company Products via email, direct message, or phone call.

c. Provide hyperlinks that the Affiliate can place on its website or other platforms to direct Visitors to the Company Website.

d. Allow the Affiliate to post links to the Company on its website or through sponsored links.

e. Provide promotional resources and support, including ads, promotional materials, and information about upcoming product launches and events.

f. Grant the Affiliate access to the Company’s “Affiliate Benefits,” such as store discounts, brand services, events, and performance contests.

g. Fulfill sales made to Customers at the Company’s expense.

h. Pay the Affiliate Sales Commission within two weeks of the month following the month in which the Company receives Gross Revenue from sales.

i. Respect the Affiliate’s privacy and do not disclose personal information without consent.

j. Provide services with due care, skill, and ability.

7. Obligations of the Affiliate

During the Term of this Agreement, the Affiliate agrees to:

a. Endorse and market the Company’s Products using the provided Marketing Materials.

b. Send out promotions to the Affiliate’s list of prospects during the first season of this Agreement, with the first sent within one month of the Effective Date.

c. Refrain from posting Marketing Materials on hate sites, adult sites, or any other sites without prior approval from the Company.

d. Maintain the integrity of all Marketing Materials and not alter them without prior written consent from the Company.

e. Place banners or links only on the Affiliate’s website, social media, or other approved locations.

f. Notify the Company of any unauthorized use of Marketing Materials posted on the Affiliate’s website.

g. Maintain membership on the Company’s websites.

h. Sign the Non-Circumvention and Non-Disclosure Agreement, enforcing it with procured clients.

8. Representations and Warranties of the Company

The Company represents and warrants that:

a. It has the authority to enter into this Agreement.

b. It has obtained all necessary licenses for sales events or telemarketing and complies with applicable laws and regulations.

c. It is not required by law to be registered as a broker-dealer or investment adviser with the Securities and Exchange Commission or any other regulatory body.

d. It is not involved in any bankruptcy, receivership, or civil actions that could impact this Agreement.

e. It has not been the subject of any regulatory investigation by local, state, or federal authorities.

9. Representations and Warranties of the Affiliate

The Affiliate represents and warrants that:

a. It has the authority to enter into this Agreement.

b. If an individual, the Affiliate is at least 18 years of age and a resident of the United States.

c. It has obtained all necessary licenses for marketing activities and complies with applicable laws and regulations.

d. It acknowledges that the Company has no responsibility for any external websites accessed through the Company Website.

e. It owns its website content and does not infringe on third-party rights, including intellectual property, and does not engage in unlawful or defamatory activities.

f. It is not required to be registered as a broker-dealer or investment adviser with regulatory bodies.

g. It is not involved in any bankruptcy, receivership, or civil actions that could impact this Agreement.

h. It has not been the subject of any regulatory investigation by local, state, or federal authorities.

10. Indemnification

Each Party agrees to indemnify, defend, and hold harmless the other Party against any claims, demands, suits, or damages resulting from a breach of warranties or obligations set forth in this Agreement.

11. Confidentiality

Each Party agrees to keep confidential and not disclose or use confidential information related to the other Party’s technology or business except as required for the performance of this Agreement. Confidentiality exceptions include information that enters the public domain, was known by the receiving Party prior to disclosure, was disclosed by a third Party without restriction, or was independently developed. Confidential information must be marked as such, and disclosure is permitted only when legally required, with proper protective measures in place.

12. Customers

Each Party retains joint ownership over the customer data obtained through the Affiliate’s marketing efforts.

13. Miscellaneous

a. Assignment: The Affiliate cannot assign this Agreement without prior written permission from the Company.

b. Independent Contractors: The relationship between the Parties is that of independent contractors. This Agreement does not create any partnership, joint venture, or formal business entity.

c. Notices: Notices must be in writing and can be delivered by email or in-person.

d. Construction: This Agreement is a joint drafting effort and should not be construed against either Party in case of ambiguity.

e. Governing Law; Dispute Resolution: This Agreement is governed by the laws of Florida, with disputes resolved in a Florida court. Each Party bears its own attorney’s fees and court costs.

f. Entire Agreement: This Agreement represents the entire agreement between the Parties and supersedes all prior discussions or agreements.

g. Amendment and Waiver: Modifications to this Agreement require written consent from both Parties. The failure to enforce a right does not constitute a waiver.

h. Severability: If any provision is deemed unenforceable, the rest of the Agreement remains in effect.

i. Counterparts: This Agreement can be executed in counterparts and via electronic means.

j. Headings: Headings are for convenience only and do not affect the interpretation of this Agreement.

14. Further Assurances

Each Party agrees to execute and deliver all instruments or take action as reasonably required by the other Party to effectuate the intent of this Agreement.

To activate this Affiliate Agreement, please electronically sign this document. Upon submission, the agreement will be forwarded to a company representative for processing. Your Affiliate Agreement will become effective within 24 hours of submission, and a confirmation email will be sent to you.

IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date first written above. 

____________________, 20______.

THE COMPANY

Authorized Signature

Printed Name: ________________________

Title: ________________________

THE AFFILIATE

Authorized Signature

Printed Name: ________________________

Title: ________________________

How to make changes to the affiliate agreement? 

In an affiliate agreement, certain terms are typically more flexible and subject to negotiation or changes based on the specific needs and preferences of the parties involved. These terms may vary depending on factors such as industry practices, market conditions, and the bargaining power of the parties.

Making changes to an affiliate agreement involves reviewing and updating the terms and conditions outlined in the contract. This could be necessary due to various reasons such as changes in business practices, legal requirements, or market conditions. Typically, both the affiliate and the merchant need to agree on any proposed changes to the agreement.

Changing the commission rate of certain affiliates is the most common use case. When you want to change the commission structure (which happens surprisingly regularly) or wish to offer different commission structures for special affiliates, it might confuse you.

To address the problem above, you can: 

• Making changes in agreement: Merchants can change the affiliate’s commission rate by either adding a separate section to the existing agreement that covers commission changes or by creating an entirely new agreement. 
• Using the same agreement for every affiliate program: This affiliate partnership contract doesn’t rigidly fix commission rates, and merchants can seamlessly transition affiliates between programs.

Affiliate marketing agreement termination 

One of the most annoying contract flaws that have appeared unexpectedly many times is the vague clause regarding contract termination.

A vague termination term is one of the most common terms in contracts. Here is an example:

“The Company or the Affiliate may terminate this agreement at any time for any reason.”

This clause may give the right for a merchant to terminate the contract without warning, without providing any specific detail or grounds for termination, leaving it entirely open-ended. Plus, the clause doesn’t mention what happens to any commissions that have been earned but not yet paid by the time of termination, leaving the affiliate’s rights in doubt.

Solution: define the termination process, including notice periods and grounds for termination (e.g., breach of terms, unethical conduct). Explain what happens to outstanding commissions if the agreement is terminated.

What to do when an affiliate violates the contract?

In case an affiliate violates advertising or IP laws, merchants can immediately take action by suspending the affiliate’s promotional activities or removing the offending content from circulation to prevent further harm or legal liability.

The merchant should conduct a thorough investigation to assess the extent of the violation and determine the potential impact on the brand’s reputation, intellectual property rights, and legal compliance.

While their affiliate marketers violate the law while promoting another brand, there are still considerations and actions that merchants may need to take in response to such violations. While merchants may not have direct control over affiliate marketers’ actions when promoting other brands, they still have responsibilities to uphold legal and ethical standards within their affiliate program.   Related to legal risks and reputation management.

FAQs: Contract in affiliate marketing