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Affiliate Agreement Template (Free Download + AI Generator)
Greg Mitchell | Legal consultant at AI Lawyer
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An Affiliate Agreement is a contract between a company (the “merchant”) and independent promoters (the “affiliates”) that sets the terms for driving traffic or sales in exchange for commissions. It defines tracking methods, qualifying actions, commission rates, payment schedules, content rules, and compliance duties (like advertising disclosures and restricted claims).
Getting these right matters because the underlying market is huge: the U.S. digital advertising industry generated $259 billion in revenue in 2024, setting a new record and underscoring the performance-marketing opportunity affiliates tap into. According to the U.S. Census, e-commerce accounted for 15.5% of total U.S. retail sales in Q2 2025, showing the channel where many affiliate programs operate.
Download the free Affiliate Agreement Template or customize one with our AI Generator — then have a local attorney review before you sign.
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1. What Is an Affiliate Agreement?
An Affiliate Agreement sets the rules for a performance-based partnership where affiliates earn commissions for driving purchases, leads, or other desired actions. It explains how links are tracked, what counts as a “qualified” transaction, and how and when affiliates are paid. It also governs permitted content, brand use, coupon rules, prohibited traffic sources, data handling, and termination rights.
Unlike broad advertising contracts, this agreement zeros in on measurable outcomes — clicks, sign-ups, or sales — so disputes often center on attribution and compliance. A strong agreement reduces gray areas by defining the offer, the tracking stack, reporting windows, and processes for dealing with fraud, returns, and chargebacks.
2. Why Affiliate Agreements Matter in 2025?
Marketers face tighter disclosure and platform rules, and affiliates increasingly promote across short-form video, newsletters, and live shopping. Regulators and self-regulators are watching: in a 2024–2025 analysis, the UK’s Advertising Standards Authority found that about 57% of likely advertising content from a random sample of influencer posts was adequately disclosed, leaving material room for improvement in compliance. Clear rules in the affiliate contract help prevent non-compliant endorsements that risk takedowns, clawbacks, or penalties.
At the same time, e-commerce and subscription businesses need predictable, scalable customer acquisition. Affiliate terms that balance incentive (commission structure) and control (brand and disclosure standards) help both sides grow while minimizing chargebacks, returns, and reputational risk.
3. Key Clauses and Components
Parties & Program Overview: Identify the merchant and affiliate, program purpose, and relationship as independent contractors.
Enrollment & Approval: Explain application review, eligibility criteria, and right to reject or revoke participation.
Tracking & Attribution: Describe link formats, cookies or server-side events, attribution windows, last-click or multi-touch rules, and what happens with ad-blockers or cross-device scenarios.
Qualifying Actions: Define a valid sale or lead, exclude self-referrals and suspicious activity, and address returns, cancellations, or fraud filters.
Commission Structure: Set base rates, tiers, and any bonuses, plus rules for coupons, paid search bidding, and conflicting channels.
Payment Terms: State payout currency, thresholds, timing, reversals, and disputes; require accurate tax and payee information.
Brand & Content Standards: Provide creative guidelines, prohibited claims, restricted categories, and link placement rules (no cloaking, no hidden endorsements).
Compliance & Disclosures: Require clear advertising disclosures and adherence to applicable laws and platform policies; set audit rights.
Data & Privacy: Limit use of personal data, require security measures, and forbid sharing beyond the program’s scope.
Term, Suspension & Termination: Allow pause for suspected fraud, define cure periods for minor breaches, and state effects of termination on unpaid commissions.
4. Legal and Regulatory Considerations
United States (FTC Endorsement Guides): Affiliates must make clear, conspicuous disclosures of any material connection to the merchant when endorsing a product. The FTC updated its guidance in 2023 and maintains detailed Q&A on when and how to disclose in social and web content. Make your contract require compliant disclosures, placement near the claim, and platform-appropriate labels.
European Union: Influencer and affiliate promotions must comply with consumer protection laws. The European Commission’s Influencer Legal Hub summarizes disclosure principles across EU law, reinforcing that creators who sell or regularly promote products may be treated as traders with corresponding obligations.
United Kingdom: The ASA’s 2024–2025 review shows ongoing enforcement focus on ad disclosure quality; your agreement should require conspicuous labels and cooperation with takedown requests if posts breach the CAP Code.
Global Privacy & Platform Policies: Programs touching the EU/UK should align with GDPR/UK GDPR; many platforms ban hidden endorsements, link cloaking, or restricted claims. Include a clause that affiliates must follow all applicable platform and app-store rules.
5. How to Customize Your Affiliate Agreement?
Business Model Fit: Retail/e-commerce: emphasize SKU-level exclusions, coupon rules, and return windows.
SaaS/subscriptions: focus on free-trial conversions, churn clawbacks, and recurring commissions.
Attribution Model: Decide last-click vs. multi-touch and spell out the lookback (e.g., 7/30 days). For paid search collision, reserve brand-keyword space for your own campaigns.
Commission Design: Create tiers that reward incremental value: new-customer first-purchase bonuses, higher rates for premium categories, or CPA + rev-share hybrids.
Creative Controls: Provide a brand kit and mandatory disclosures; prohibit medical, legal, or financial claims without substantiation.
Enforcement Ladder: Use warnings, temporary suspensions, commission holds, and termination for repeat non-compliance; require removal of non-compliant content on notice.
Territory & Language: Localize terms for key markets, including disclosure wording and VAT/GST handling where relevant.
6. Step-by-Step Guide to Launching a Program
Step 1-Define goals: Choose primary KPIs (new customers, ROAS/CPA targets, AOV uplift) and set the budget guardrails.
Step 2-Select tracking: Implement trusted tracking (platform tags plus server-side events) and test cross-browser accuracy before onboarding partners.
Step 3-Draft terms: Start with this template and add your commission table, program-specific exclusions, and compliance obligations.
Step 4-Build a creative kit: Provide link formats, approved copy, and image/video assets; include sample disclosure language.
Step 5-Onboard affiliates: Vet applications, verify identity and traffic sources, and provide training on disclosures and brand rules.
Step 6-Set QA routines: Review top affiliates’ content regularly; use keyword/brand monitors and spot checks for hidden endorsements or restricted claims.
Step 7-Measure & optimize: Track conversion rates, incrementality, and assisted conversions; tune tiers and bonuses based on quality.
Step 8-Handle payments: Automate monthly statements, apply reversals for returns/fraud within the agreed window, and pay on time.
Step 9-Enforce fairly: Use your enforcement ladder consistently; document every warning, hold, and termination.
Step 10-Review annually: Update terms to reflect new platform rules, disclosure guidance, and tax/withholding changes.
7. Tips for Risk Reduction and Growth
Write disclosure once, use everywhere: Provide pre-approved labels and placement examples that work on short video, blogs, and emails.
Guard brand search: Prohibit bidding on exact brand names or require negative-match lists to prevent channel cannibalization.
Segment partners: Separate content publishers from coupon sites and cashback to preserve incrementality and avoid last-click bias.
Use commission holds wisely: Hold payouts for a return window (e.g., 30 days) and release automatically after fraud checks.
Prioritize first-party data: Use server-to-server events to stabilize tracking when cookies are blocked; keep privacy notices current.
Document outreach: Keep a trail of policy updates and affiliate acknowledgments to defend decisions and maintain fairness.
8. Checklist Before You Publish the Terms
Eligibility, enrollment, and approval criteria are written clearly.
Tracking, attribution windows, and conflict rules (search/coupons) are defined.
Qualifying actions, exclusions, and reversal logic are specified.
Commission table, tiers, payout thresholds, and timing are set.
Disclosure requirements, brand rules, and prohibited claims are included.
Audit, suspension, and termination procedures are documented.
Data-protection, security, and cross-border transfer terms are covered.
Governing law, dispute process, and notice methods are inserted.
Tax/withholding instructions and payee verification are addressed.
Download the Full Checklist Here
9. Common Mistakes to Avoid
Vague attribution rules: ambiguity about cookie duration, last-click vs. multi-touch, or coupon stacking causes disputes.
No disclosure standard: leaving compliance to affiliates invites regulator attention and platform takedowns.
Overpaying for non-incremental traffic: undifferentiated rates for coupon/brand bidding partners erode margins.
Weak enforcement: no documented process for warnings, holds, and termination undermines fairness.
Ignoring returns and fraud: failing to set reversal windows and investigation rights results in unrecoverable spend.
Silence on brand bidding and domain use: opens the door to trademark and confusion risks.
10. FAQs
Q: How should disclosures appear in affiliate content?
A: Disclosures must be clear and hard to miss. Short, plain-language cues like “Ad,” “Paid link,” or “I earn commissions” should appear close to the endorsement, not hidden in a profile or at the bottom of a long page. Video and audio content should include on-screen and verbal cues. This mirrors the FTC’s Endorsement Guides and Q&A, and similar principles in EU/UK guidance.
Q: What commission model works best for new programs?
A: Start simple: a base CPA for first purchases with a small bonus for new-customer conversions. Add tiers once you have data on partner quality. For subscriptions, consider a first-month bounty plus a limited-term rev-share (e.g., three cycles) with a clawback for early churn. Keep rules transparent and publish examples in your program guide so affiliates can forecast earnings accurately.
Q: How do we handle coupon and cashback partners without cannibalizing direct traffic?
A: Put them in a separate category with lower default rates and stricter attribution (e.g., require click within 10 minutes of checkout). For branded search, restrict exact-match bidding and allow only generic keywords. Track assisted conversions to see whether these partners add net new demand or simply harvest sales at the end of the funnel.
Q: What happens when an affiliate violates disclosure or brand guidelines?
A: Use a graduated response: written warning with a fix-by deadline, temporary suspension and commission hold for repeat issues, and termination for persistent or material violations. Reserve the right to reverse commissions from non-compliant placements. Keep records of notices and responses — the paper trail supports fairness and protects the program in disputes.
Q: How often should we update the Affiliate Agreement?
A: Review at least annually or when platform rules, privacy laws, or tracking practices change. For example, major changes to disclosure guidance or browser privacy features may require new language on link placement, data use, or attribution windows. Notify affiliates in advance and require acknowledgment to ensure everyone is working under the same rules.
Sources and References
Industry and compliance information in this article reference the Federal Trade Commission (FTC) Endorsement Guides (2023 update), FTC Advertising Disclosures Guidance, and Advertising Standards Authority (ASA) influencer transparency reports 2024–2025.
E-commerce and digital-marketing market data are drawn from the U.S. Census Bureau Quarterly Retail E-Commerce Report Q2 2025.
European consumer-protection principles and disclosure requirements follow the European Commission Influencer Legal Hub and CAP Code.
Privacy and data-handling references align with EU GDPR and UK GDPR.
Disclaimer
This article is for informational purposes only and does not constitute legal advice. Advertising, consumer protection, and privacy laws vary by jurisdiction and change over time. Always consult qualified counsel before launching or relying on an Affiliate Agreement.
Get Started Today!
A clear Affiliate Agreement helps you grow performance marketing while protecting your brand and partners. Define attribution, disclosures, and fair commission rules up front so everyone wins.
Download the free Affiliate Agreement Template or customize one with our AI Generator — then have a local attorney review before you sign.
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