Affiliate Marketing Agreement Template

In plain language: Identifies the merchant and affiliate as legal entities, defines key terms used throughout the agreement, and describes the specific products, services, or program the affiliate is authorized to promote.

Common mistake: Using a brand name instead of the merchant's registered legal entity name. If the contracting entity doesn't match the entity that processes payments, commission disputes become harder to enforce.

In plain language: States the commission rate or flat fee, the action that triggers a commission (sale, lead, click, or subscription), and any tiered or performance-based adjustments.

Common mistake: Defining commission on gross rather than net sale price without specifying what deductions apply. Affiliates later dispute deductions for refunds, shipping, and taxes that were never disclosed upfront.

In plain language: Describes how affiliate-driven conversions are tracked, the cookie duration, the attribution model used (last-click, first-click, or multi-touch), and what happens when tracking fails.

Common mistake: Omitting the attribution model entirely. When two affiliates both touched a sale, with no written attribution rule the merchant faces competing commission claims with no contractual basis for a decision.

In plain language: Sets out when commissions are paid, the payment method, the minimum balance required before payment is issued, and the process for disputing a commission statement.

Common mistake: No minimum payment threshold and no rollover rule. Processing a $2 commission payment costs more in transaction fees than its value and creates administrative burden at scale.

In plain language: Enumerates the marketing channels and tactics the affiliate is permitted to use, and explicitly prohibits practices such as PPC bidding on brand keywords, cookie stuffing, spam, and misleading claims.

Common mistake: Listing only prohibited tactics without specifying approved channels. When a dispute arises over an unapproved channel, there is no positive permission to reference, making enforcement ambiguous.

In plain language: Grants the affiliate a limited, non-exclusive, revocable license to use the merchant's trademarks, logos, and approved creative assets solely for the purpose of promoting under the agreement.

Common mistake: No IP clause at all, or a clause that doesn't include a revocation mechanism. Without revocation language, terminating the agreement doesn't automatically stop the affiliate from continuing to use your brand assets.

In plain language: Requires the affiliate to comply with applicable advertising laws, including the FTC's endorsement guidelines, GDPR, CASL, and any other applicable data-privacy or consumer-protection regulations.

Common mistake: No compliance clause at all. Merchants have been held jointly liable for an affiliate's undisclosed promotional content — the FTC has issued warning letters to brands whose affiliates failed to disclose.

In plain language: Prevents the affiliate from disclosing the merchant's commission rates, conversion data, customer information, and other non-public program details to third parties.

Common mistake: No confidentiality clause in affiliate agreements. Commission rates and conversion data disclosed to competitors or competing affiliates can undermine the entire program's economics.

In plain language: States the initial term, renewal mechanism, each party's right to terminate with or without cause, and what happens to earned but unpaid commissions after termination.

Common mistake: Termination language that doesn't address post-termination commission obligations. Affiliates often continue to drive tracked conversions for days after notice is given — a payment cliff creates disputes and damages the relationship.

In plain language: Each party warrants they have authority to enter the agreement; the affiliate warrants their promotional content is accurate and compliant; and each party indemnifies the other against third-party claims arising from their own actions.

Common mistake: One-sided indemnification that only protects the merchant. Courts in several jurisdictions have rebalanced one-sided indemnity clauses or refused to enforce them entirely — mutual indemnification is both fairer and more durable.

An affiliate marketing agreement is a legally binding contract between a merchant and an affiliate that sets out the terms under which the affiliate promotes the merchant's products or services in exchange for a commission. It covers commission rates, tracking and attribution, payment terms, approved promotional methods, IP licensing, compliance obligations, and termination rights. Without a written agreement, both parties operate on implied terms that courts will fill in unpredictably if a dispute arises.

No law in the US, Canada, UK, or EU mandates a written affiliate agreement, but operating without one exposes both parties to significant risk. The merchant has no enforceable basis to prohibit brand-keyword bidding, require FTC disclosures, or clawback commissions on fraudulent sales. The affiliate has no documented proof of the agreed commission rate or payment schedule. A written agreement is the only reliable way to protect both sides.

Commission rates vary widely by industry. Physical product retailers typically offer 5–15% of net sale price. SaaS and software companies commonly pay 20–30% of first-year subscription value, or a flat referral fee of $50–$500 per qualified sign-up. High-margin digital products like online courses can range from 30–50%. The right rate depends on your gross margin, customer lifetime value, and the CAC you would otherwise pay through paid channels.

An affiliate agreement typically governs an ongoing promotional relationship where the affiliate actively markets the merchant's products to an audience through tracked links, content, or ads — and earns a percentage of each resulting sale. A referral agreement is usually simpler, covering a flat fee per qualified lead or introduction made by someone already in the merchant's network. Affiliates are generally external publishers; referrers are often existing customers, partners, or employees.

Technically, affiliates often begin promoting through program terms accepted via a click-wrap interface on an affiliate platform. These platform terms are generally binding but may be thin on specifics — particularly around prohibited tactics, IP use, and post-termination obligations. A signed bilateral agreement provides much stronger evidence of the specific terms negotiated between the parties and is advisable for any affiliate generating material revenue.

The FTC's Endorsement Guides (16 C.F.R. Part 255) require affiliates to clearly and conspicuously disclose any material connection to the merchant whenever they promote the merchant's products. Disclosure must appear close to the promotional claim — not buried in a footer or linked disclosure page. The FTC updated its guidance in 2023 to address social media and video content specifically. Merchants whose affiliates fail to disclose can face regulatory exposure alongside the affiliate.

Cookie duration should reflect the typical purchase decision cycle for your product. Impulse-purchase products with a 1–3 day consideration period can use shorter windows. High-consideration purchases like software, financial products, or travel typically warrant 30–90 days. Shorter cookie windows disadvantage affiliates and reduce program attractiveness; longer windows increase your commission liability on returning visitors. The agreement should state both the duration and the attribution model — last-click is most common — to prevent disputes.

The agreement should explicitly address three scenarios: commissions earned but not yet paid as of the termination date (typically paid on the next scheduled date), conversions tracked in the days immediately following termination while links remain active (a 30-day wind-down window is common), and any commissions subject to a chargeback or fraud review. Without written terms covering these scenarios, termination typically triggers a dispute over every open commission balance.

For standard programs with straightforward commission structures and domestic affiliates, a high-quality template is generally sufficient. Engage a lawyer when your program involves significant commission exposure, international affiliates in heavily regulated jurisdictions, complex IP licensing, or sub-affiliate (multi-tier) structures. A legal review of a completed template typically costs $300–$600 and is worthwhile before launching a program at scale.