What goes in an affiliate agreement?

An affiliate agreement, also called affiliate terms and conditions or affiliate program terms, is the contract between a store and an affiliate, a person or business that promotes the store for a commission. It should say what the affiliate earns, when you pay, how they may promote your store, and how either side can end the deal. A clear agreement prevents most arguments before they start. This article explains the usual clauses and gives a template to adapt; it is not legal advice.

What you will learn

• How an affiliate agreement and an affiliate terms and conditions page differ
• The clauses most affiliate agreements include, and why each one matters
• Which promotion rules to decide before you invite anyone
• How to start from a terms and conditions template

Affiliate agreement or terms and conditions?

Most stores use one document for both. Affiliate terms and conditions usually means a page on your website that each affiliate accepts when they join, for example with a checkbox on the signup form. An affiliate agreement can mean that same page, or a contract that you sign with one large partner, often with a special commission rate.

The clauses are the same in both. If you give one partner special terms, keep your standard terms and write a short addition that names only what is different, such as the rate or the payment dates.

The clauses to include

The relationship

Say that the affiliate is an independent contractor, not an employee or a partner, and that they cannot sign anything on your behalf. This matters for tax and for liability.

Commission and attribution

State the commission rate and what it applies to, such as the order total before shipping and tax. Attribution is the rule that decides which affiliate gets credit for a sale, so say which orders count: for example, orders placed through the affiliate's referral link, a web address that identifies them, or with their discount code, a code that the customer enters at checkout. Also say which orders earn nothing, such as an affiliate's own orders, if your program does not allow those.

Payment terms

Say how and when you pay, and whether there is a payout threshold, a minimum amount an affiliate must earn before you pay them. Say who pays any fees, and in which currency you pay. To choose these terms, read How do affiliate payouts work?

Refunds and reversals

Say what happens to a commission when a customer cancels or returns an order, and what happens if you already paid it. Many arguments start here, so give an example in plain words.

Promotion rules

Decide these before you invite anyone, because they are hard to add later:

• Paid search: may affiliates bid on your brand name in search ads?
• Coupon sites: may affiliates post your discount codes on coupon and deal sites?
• Email and messages: may they send promotions, and must they follow anti-spam laws?
• Claims: which claims about your products are allowed, and which are not?

Disclosure

Require affiliates to tell their audience that they earn money from their links. In the United States, the Federal Trade Commission says that a disclosure should be close to the recommendation and easy to notice, and gives "I get commissions for purchases made through links in this post" as an example. Other countries have similar rules. Read the FTC's Endorsement Guides FAQ.

Your brand and their content

Give affiliates a limited right to use your name, logo, and product images while the agreement lasts. If you want to reuse their content in your own marketing, ask for that right here.

Taxes

Say that each affiliate is responsible for their own taxes, and that you may ask for tax details before you pay. To learn how this works, read How are affiliate commissions taxed?

Changes and ending the agreement

Say how you tell affiliates about a change to the terms, how much notice either side must give to end the deal, and what happens to unpaid commissions at the end. Keep the right to end the deal at once for fraud or a serious breach of the rules.

Limits and governing law

This part sets the limits on what each side can claim from the other, and which country's or state's law applies. It is the part where a lawyer helps most, because the correct wording depends on where you and your affiliates are.

Affiliate terms and conditions template

This sample agreement is a starting point, not legal advice. Replace each part in square brackets, remove what does not fit your program, and ask a lawyer to review it before you use it.

1. Parties. This agreement is between [Store legal name] ("we") and the person or business that joins our affiliate program ("you"). You accept it when you join the program.

2. Relationship. You are an independent contractor. Nothing in this agreement makes you our employee, agent, or partner, and you cannot make commitments on our behalf.

3. Commission. We pay [rate]% of [the order subtotal before shipping and tax] on each order placed through your referral link or with your discount code. You earn no commission on [your own orders, orders with another discount code]. We decide which orders qualify based on our tracking records.

4. Payment. We pay by [method] [monthly] when your balance reaches [amount]. A smaller balance carries over to the next payment date. We pay in [currency].

5. Refunds. If an order is canceled or refunded, we cancel or reduce its commission. If we already paid that commission, we deduct it from your later earnings.

6. Promotion rules. You must not: bid on our brand name in paid search; post our discount codes on coupon or deal sites; send spam; make false or misleading claims about our products; or use your own link or code to buy for yourself. [Change this list to match your rules.]

7. Disclosure. You must clearly tell your audience that you earn a commission, close to each recommendation, and follow the advertising laws that apply to you.

8. Brand use. While this agreement lasts, you may use our name, logo, and product images only to promote our products, and only as we allow.

9. Taxes. You are responsible for your own taxes. We may ask for tax information before we pay you, and we may report payments to tax authorities when the law requires it.

10. Changes and ending. We may change these terms by giving you [number] days' notice. Either side may end this agreement with [number] days' notice. We may end it at once if you break the promotion rules or commit fraud. We pay valid commissions earned before the end date, unless you committed fraud.

11. Limits. [Limit of liability, in the wording your lawyer advises.]

12. Governing law. The laws of [state or country] govern this agreement.

Common mistakes in affiliate terms

• Copying another company's terms. Their rules fit their products, prices, and payment methods. Start from the template and change each part to match your program.
• A vague refund rule. "Commission may be reversed" causes arguments. Say when you reverse a commission, and give an example with numbers.
• Promising payment dates you cannot keep. Write only the dates and the payout threshold that your payment method can meet.
• Rules that you do not enforce. If you allow coupon sites in practice, but your terms forbid them, affiliates stop trusting the rest of the terms.

Putting your agreement to work

An agreement only helps if affiliates can read it. Publish it as a terms and conditions page, link it from your signup page, ask new affiliates to accept it when they join, and tell them about changes in plain words.

Simple Affiliate records referral activity and calculates commissions, while the program terms stay yours: you define the commission terms and explain them to your affiliates. The Simple Affiliate signup form can show an affiliate agreement checkbox with a link to your terms page, and a person must check it to sign up. To see each field of the signup form, read Which affiliate signup fields are available? in the help center.