While rarely a fun activity, writing up comprehensive Terms and Conditions for your affiliate program is important if you want to ensure that your affiliates are fully aware both of their rights and obligations.
We have been talking about the problems that might occur with certain affiliate practices, so we strongly advise you to not postpone creating an affiliate program agreement.
Please note that we are not lawyers or legal advisors. Therefore, these are only guidelines drawn from our own experience. Take them with a grain of salt!
For more information on how to properly phrase such an agreement, as well as the laws governing the affiliate services in your country of residence, get in touch with an authorised lawyer or legal advisor.
These being said, let’s quickly take a look over the main aspects we considered when we drafted our Affiliate Program Terms and Conditions:
The beginning of the agreement is quite general. We require the aspiring affiliate to read the whole document and confirm that they have full authority to enter the agreement.
We also mentioned an important notice regarding a specific situation that future affiliates should be aware of before joining our program. Due to current administrative and legal reasons, we require each affiliate to provide us with invoices for the commission rates they earn through our program. This is something that, unfortunately, might deter some people from joining, so we want to be transparent and have it clearly stated from the beginning.
Last but not least, we mentioned the legal entity behind the product. As far as we’ve seen, this is required by law pretty much everywhere. It is, after all, a matter of transparency and trust: your customers and potential business partners need to know who they’re dealing with and that you are doing serious business.
2. Affiliate registration requirements
In the second part of the agreement, we brought up the affiliate registration requirements. Here we included things like:
- review process (if there is any; ours is manual);
- means of communication (email in our case);
- their obligation to provide accurate information about who they are;
- reasons why the application might be rejected.
You can include anything else related to the registration process: important information you might need from them or steps they need to follow in order to join your program. For example, you can require them to already own and use your product, be active in a specific market niche or have a certain audience size.
As for reasons to reject an application, we gave examples of websites and businesses we do not accept and do not want to be associated with (included but not limited to anything illegal and/ or doubtful). If there are other specific aspects you are not willing to tolerate, include them here.
Despite compiling the list, we still retain our right to reject any application if we don’t consider it a good fit for us, whatever the reason.
3. Affiliate commission rates and how they will be paid
In this section, we touched the subject of commission rates and payments. We included things like:
- commission rate (can be a flat fee or a percentage, recurring or not recurring);
- cookie duration;
- refunds and money-back guarantees;
- minimum or maximum payouts;
- payment timeline (when we process the payments);
- payment method (PayPal, direct bank account transfer etc);
- payment currency;
- whether they can use their own affiliate link to purchase your products.
In our case, the affiliate has the full responsibility to comply with any tax laws in their country of residence for the money they earn from us. This is important to mention, because tax laws can differ from country to country. Working with people internationally, it can lead to confusion and misunderstandings.
4. Permitted and restricted promotional methods
We find this area of the agreement important to include as well, especially the promotional methods that are NOT permitted. We have also previously touched upon this subject when talking about the downsides of affiliate program marketing.
Here’s a summary of what we do not tolerate as promotional practices:
- brand misrepresentation;
- paid advertising for the affiliate link;
- using coupon websites.
Any affiliate engaging in such practices will have their account terminated and commissions withheld.
For more clarity, you can mention what is permitted as well (we did too!).
We also encourage our affiliates to contact us in advance when they’re not sure about a specific promotional practice.
5. Affiliate account termination
Basically, any violation of our Terms and Conditions will lead to terminating the affiliate’s account immediately.
Other situations that can lead to terminating an affiliate account: discontinuing or restructuring the affiliate program, inactive affiliates or affiliates that are no longer a good fit for your products (or business).
You can also choose to suspend the affiliate’s account until the problem that generated the situation is fixed. We didn’t include this option, but who knows, we might change it later on.
The affiliates also have the right to terminate the partnership at any time and for any reason.
The aspiring affiliate has to agree with our Terms and Conditions and comply with our requirements if they want to be a part of our affiliate program.
We also make it clear that, by joining our program, they do not become our employees, nor they receive any authority to act on our behalf.
Finally, we mention the date when the agreement was last updated. We reserve the right to bring any modification we might consider necessary to the agreement and we commit to notifying them once this happens.
Overall, we tried to keep the language of our Affiliate Program Agreement simple and concise. Therefore, we avoided complicated and confusing “legal” wording. This is because we want our affiliates to quickly and clearly understand what is required of them.
You have the freedom to choose a friendlier approach or go with a much more elaborate and serious wording, depending on your business profile and the type of affiliate relationships you are seeking.
Whichever the case, be transparent and straight-forward.
Again, we are not legal advisors, so take this article only as a starting point from where to elaborate your own affiliate agreement.