Before kicking off your affiliate marketing program kicks, you’ll want to put want strong terms and conditions in place. Otherwise, you risk damaging your program’s reputation and running into legal trouble.
Creating terms and conditions may seem daunting, but it’s actually not that difficult. In this article, we’ll first explore what they are and why it’s important to have them. Next, we’ll walk you through creating crystal clear terms and conditions that protect you and your affiliates. Finally, we’ll provide you with a template that you can use as a jumping-off point. Let’s get started.
What are Affiliate Program Terms and Conditions?
The Terms and Conditions is a legally binding agreement between you and your affiliates. In this agreement, you set out the rules of the affiliate relationship.
Why set affiliate program terms and conditions for your affiliate program?
Creating terms and conditions for your affiliate program is important for many reasons.
First, terms and conditions help you protect your business. For example, if an affiliate is engaging in fraud or violating your intellectual property rights, you can rely on your terms and conditions to take action.
Second, terms and conditions ensure your affiliates are clear about what they can and cannot do. This clarity helps to prevent misunderstandings and conflict down the road.
Third, terms and conditions help you set expectations for both you and your affiliates. For example, if you only want to work with affiliates who generate a certain amount of traffic, you can include this requirement in your terms and conditions.
Finally, setting terms and conditions helps build trust. Trust is the glue that holds relationships together, especially business relationships. Your affiliates need to trust that you’re going to live up to your end of the bargain. In turn, you need to be able to trust that your affiliates are promoting your products and services ethically.
How to create affiliate program terms and conditions?
Now that we’ve gone over the importance of setting terms and conditions for your affiliate program, let’s walk through creating them.
The first step is to decide what goes into your terms and conditions. Here are some common topics that you may want to address:
- Eligibility requirements: Include any minimum requirements that affiliates must meet, such as having a certain number of unique visitors per month.
- Prohibited activities: List any activities that affiliates should not engage in, such as using paid advertising to promote your products.
- Commission rates and payment terms: Be clear about how often you’ll pay commissions. Also, include what the commission rate is.
- Cookie duration: Specify how long cookies will remain active after someone clicks on an affiliate’s link.
- Branding guidelines: Outline how affiliates should represent your brand, including the use of logos and other branding assets.
Once you’ve decided what topics to include, start drafting your terms and conditions. Here are a few tips to keep in mind as you write:
Tips on writing affiliate program terms and conditions
- Be clear and concise: Use simple language that is easily understood.
- Be specific: Include all the relevant details so that there is no confusion about the expectations of both parties.
- Be realistic: Don’t set unrealistic expectations for either you or your affiliates.
- Get input from others: Ask someone else to read your terms and conditions to make sure they are clear and complete.
- Have a lawyer review your terms and conditions.
Sample Template
Here is a template that you can use as a starting point for your own terms and conditions:
1. Introduction
The introduction sets the tone for your terms and conditions. It should include a brief overview of what affiliates can expect.
Here is an example:
This agreement contains the complete terms and conditions that apply to your participation in our Affiliate Program. Please read this agreement carefully before registering as an Affiliate. By registering as an Affiliate, you indicate your acceptance of this agreement and its terms and conditions. If you do not accept this agreement, you are not eligible to register as an Affiliate or participate in the Affiliate Program.
2. Definitions
Spell out the meaning of key terms used in your agreement. This helps avoid confusion. You don’t have to explain each term. However, include enough information so that the meaning is clear. It’s better to over-explain than to under-explain.
Here are some common terms that you may want to define in your agreement:
- “Affiliate” – the individual or entity identified in an Affiliate’s application to participate in the Affiliate Program.
- “Affiliate Program” – the program operated by us pursuant to which participating Affiliates are compensated for referring potential customers to our website.
- “Customer” – a visitor to an Affiliate’s website who clicks on a link and completes a Qualifying Transaction.
- “Link” – a graphic or textual link located on an Affiliate’s website that, when clicked on by a Customer, directs the Customer to our website.
- “Qualifying Transaction” – a purchase of a product or service from our website by a Customer who has clicked on a link from the Affiliate’s website.
- X Company’s Products – the products and services we offer.
- Qualifying Purchase -purchases of our products and services that generate commissions for Affiliates.
- “Commission” – the amount of money that an affiliate earns from each sale.
3. Eligibility/Enrollment Requirements
In this section, outline the eligibility requirements for participation in your affiliate program. Here’s an example:
To be eligible to participate in the Affiliate Program, you must:
- Be at least 18 years old.
- Have a website.
- Agree to these Terms and Conditions.
If you meet the eligibility requirements, you can apply to become an Affiliate by filling out our online application. We will review your application and, if approved, will provide you with a unique affiliate link to use on your website.
4. Policies and Procedures
In this section, describe the policies and procedures that you expect affiliates to follow.
Here’s an example:
As an affiliate, you are required to adhere to the following policies and procedures:
- Promote our products and services in a legal and ethical manner.
- Comply with all applicable laws, regulations, and guidelines.
- Do not engage in spamming activities, including but not limited to mass emailing, unsolicited commercial offers, and “junk mail.”
- Do not promote our products and services on websites that contain offensive or illegal content.
- Only promote products that are allowed under your agreement.
Failure to comply with these policies and procedures may result in termination from the Affiliate Program.
5. Commissions and Payment
In this section, outline how you calculate and pay commissions. This might include things like paying a commission for each sale, paying a percentage of the sale price, and specifying when commissions get paid. For example, biweekly, monthly, quarterly, etc. You also want to mention if there’s a minimum threshold before commissions get paid.
Here’s an example:
As an affiliate, you will earn a commission on Qualifying Purchases made by Customers that are tracked back to your website. We will pay you the commission based on the following schedule:
For each Qualifying Purchase, you will earn a commission equal to 10% of the sale price.
Commissions get paid monthly, on or around the 1st of the month, for Qualifying Purchases made in the previous month.
Minimum Threshold: You must have earned at least $100 in commissions in order to receive a payment.
6. Affiliate Disclosure
In this section, outline the disclosure requirements for affiliates. This is not a nice to have but a legal requirement under the FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising. Be sure to check the rules that apply to the country where you sell your products or services.
Here’s an example:
As an affiliate, you must disclose that you are receiving commissions for promoting our products and services. Affiliates are required to use the following disclosure on their website:
“I am an affiliate of XYZ Company, and I receive commissions for purchases made through my affiliate link.”
7. Promotional Materials
In this section, provide affiliates with details about any promotional materials that they can use.
Here’s an example:
As an affiliate, you are authorized to use the following promotional materials on your website:
- Banner ads
- Text links
- Product images
If you have any questions about the promotional materials, please contact us.
8. Brand Guidelines
Brand guidelines help ensure that affiliates are representing your brand in a consistent and accurate manner.
Here’s an example:
As an affiliate, you are required to follow our brand guidelines. These guidelines include, but are not limited to, the following:
- Proper use of our logo, company name, and product names.
- Do not make any changes or alterations to our logo.
- Do not use our logo in a way that implies affiliation with or endorsement by another company.
If you have any questions about our brand guidelines, please contact us.
9. Intellectual Property and Trademark Policy
In this section, you will want to remind affiliates that all intellectual property rights remain with your company. A trademark policy is not required, but it’s a good idea to include one if you have a trademark that you want affiliates to use. This policy should outline how affiliates can and cannot use your trademark.
Here’s an example:
All intellectual property rights remain with XYZ Company. This includes, but is not limited to, copyrights, trademarks, and trade secrets.
Here’s an example of a trademark policy:
XYZ Company’s trademarks, service marks, trade names, and logos (the “Marks”) are the property of XYZ Company and may not be used without our prior written consent. As an affiliate, you are granted a limited, non-exclusive, revocable license to use the Marks solely for the purpose of promoting XYZ Company’s products and services in accordance with our Trademark Policy.
Other than the limited license set forth in this Trademark Policy, nothing contained herein shall be construed as conferring by implication, estoppel, or otherwise any license or right under any patent, trademark, copyright, or other intellectual property or proprietary rights of XYZ Company or any third party.
XYZ Company reserves the right to cancel, modify, or suspend this Trademark Policy at any time and for any reason in our sole discretion.
10. Prohibited Activities
In this section, you will want to list any activities that are not allowed under the affiliate program. This might include things like bidding on branded keywords, using pop-ups or pop-unders, and linking to sites that contain illegal or offensive content.
Here’s an example:
The following activities are not allowed under the Affiliate Program and will result in immediate termination of your account:
- Bidding on branded keywords (e.g., XYZ Company, www.xyzcompany.com, etc.)
- Using pop-ups or pop-unders
- Linking to sites that contain illegal or offensive content
- Spamming
- Any other activity that we determine, in our sole discretion, to be contrary to the spirit of the Affiliate Program
11. Program Term and Termination
In this section, you will want to outline the terms of the affiliate program and how it can be terminated. This is typically done by specifying a term (e.g., 1 year). It also notes how either party can end the partnership.
Here’s an example:
This Agreement will begin on the date of your acceptance and will remain in full force and effect for one year. Either party may terminate this Agreement at any time, with or without cause, by giving the other party written notice of termination. Upon termination, you will remove all links to our website from your site.
12. Limitation of Liability
In this section, you will want to limit your liability as much as possible. This typically includes a disclaimer of warranties and an exclusion of damages.
Here’s an example:
XYZ Company makes no warranties, express or implied, with respect to the Affiliate Program or any products or services sold through the Affiliate Program. XYZ Company expressly disclaims any and all warranties, including, but not limited to, the implied warranties of merchantability, fitness for a particular purpose, and non-infringement.
13. Miscellaneous
In this section, you will want to outline any other important details about the affiliate program. This might include things like the law that governs the agreement and dispute handling.
Here’s an example:
This Agreement shall be governed by and construed in accordance with the laws of the State of XYZ, without giving effect to any principles of conflicts of law. Any disputes arising under this Agreement shall be resolved exclusively by the state or federal courts located in the State of XYZ.
The failure of either party to enforce any right or provision of this Agreement is not deemed a waiver of such right or provision. If any provision of this Agreement is held to be invalid or unenforceable by a court, the remaining provisions of this Agreement will remain in effect. This Agreement constitutes the entire agreement between you and us regarding the subject matter hereof and supersedes all prior or contemporaneous communications and proposals (whether oral, written, or electronic) between you and us with respect to the subject matter hereof.
Affiliate program terms and conditions – conclusion
Once you draft the Terms and Conditions, have it reviewed by a lawyer. You want to make sure that it covers all of your bases and protects your interests. Also, review it regularly and update it as needed to make sure it stays current.
We also have a guide to help you pick the right affiliate attribution model for in-house affiliate programs.
If you need more help setting up your affiliate program, read our article: ultimate guide to starting an affiliate marketing program for SaaS.