The Elements of an Affiliate Agreement

The affiliate agreement is a legally binding contract between you and your affiliate partners. It is the reference of last resort for disputes between a merchant and an affiliate. So it is the responsibility of your affiliates to read and understand your agreement before they sign up, and your responsibility to make the agreement clear and understandable. That means cut out the legal jargon to a reasonable extent (after all, it is a legal document to be drafted by a lawyer). Write your agreement in easy-to-understand language. Most of your affiliates will neither have a legal background nor have access to legal counsel. If your agreement is easy to understand and organized in a logical manner, more affiliates will join your program.

Your agreement may make or break the number of Web sites that sign on to your program. If your agreement is steeped in legalese and is difficult to understand, they might pass on your affiliate program and go on to the next. In fact, many affiliate consultants who run Web site directories are counseling Web sites to do just that.

So just what are the elements of a good affiliate agreement? They break down into basically two types—legal issues and monetary issues.

The legal issues are

• Enrollment and Acceptance Criteria

• Exclusivity Clauses/Affiliate Conduct

• Banners and/or Text-Linking Criteria

• Vendor Responsibilities

• Affiliate Responsibilities

• Trademarks and Copyrighted Criteria

• Customer Data Considerations

• Confidential and Proprietary Information

• Affiliate Web Site Content

• Term of the Agreement

• Boiler Plate Elements such as Indemnification, Independent Investigation, Limitation of Liability, and the Relationship of the Parties Involved

The monetary issues cover

• Compensation Rates—Commissions and Referral Fees

• Escalating Commissions (if any)

• Reporting and Tracking

• Payment Schedule

• Residual Income (if any)

Cover these elements in your affiliate agreement using easy-to-understand language and you will lay the foundation for a long-term and mutually beneficial relationship between you and your affiliate partners.