You're At Risk! Legal Unknowns Can Hurt You!
How Advertising,
Affiliate and Cobranding Agreements
Protect Your Assets and Your Money1
Imagine being greeted by a process server at your office.
Your business partners leave your meeting and your employees look nervous. . . You've been served!
You read the papers and discover that you must appear in court to answer for a law suit against you because a company who hired you to run advertising accuses you of negligence for an incorrect phone number in an ad. This must be a mistake you think . . . these guys created their own copy . . . you just ran it!
No Mistake -- You Have to Hire a Lawyer and Appear in Court To handle this, you have to retain a litigation firm. The retainer is between $10,000 and $25,000 and estimated at even more to fight law suit. Then there are other claims in the law suit to fight.
Actually, it's no mistake. Now it's a battle of proof to show who's mistake it really was.
If you'd had an agreement stating it was the client's responsibility to check for any and all errors . . . Coollawyer could have helped . . .
Imagine if you had spent just $20 to buy the Coollawyer Advertising Agreement.
There'd be no battle of proof! It takes so little to save so much.
More questions, keep reading below . . .
Using agreements in promotional arrangements help clarify
each party's goals and limit the liability of the parties.
As there are a variety of promotional arrangements,
ranging from advertising to cobranding or affiliate
programs, the agreements for these arrangements may
vary as well. Advertising, Affiliate and Cobranding
Agreement legal forms by the author are available for
purchase here.
Advertising Agreements
Traditional advertising agreements, where one party
hires another to create and place promotional content,
usually for a certain period of time, can range from
one page to twenty or thirty pages in length depending
on the number and complexity of the agency tasks involved.
The advertising agreement should state the responsibilities,
in terms of creation, ownership, approval and payment,
of the agency and the advertiser.
Advertising Agreement Terms
Content Creation
The agreement should set forth who is responsible for
ideas, content and actual creation of the advertising.
Importantly, the agreement should also state who
owns the advertising created and this should be set
forth with the correct language as required by copyright
law.
Content Placement
The agreement should set forth where and in what mediums
the agency shall place the advertising and whether booking
fees or prior agency relationships are involved.
Deadlines
Any deadlines and timelines for creations, submissions
and approvals should be set forth in the agreement so
that both parties agree on these dates and are aware
of them.
Liability Limits
The agreement should state which party will be liable
for errors in the text of the ads and/or in the running
of the ads in terms of times and placement. The agency
will want to ensure that the advertiser is entirely
responsible for approving the text and proofreading
and that the agency has no liability for such tasks.
The agency will also want to ensure that the agreement
limits its liability to amounts it has received under
the contract so that its risks remain proportionate
to its revenue. The Liability Limit provision should
also waives parties' responsibility for indirect and
other damages which are not "direct" legal
damages.
To explain further, "direct damages" are
damages which are directly related to the event causing
liability. For example, if I hit you with my car, the
medical costs from your physical injuries are direct
damages. Your inability to attend your business meeting
in Omaha which resulted in your loss of an account and
in the lost income from the account are "indirect
damages". Parties limit liability for indirect
damages because as the scope is so hard to predict,
the parties cannot accurately access the risk upon signing
the agreement.
Warranties and Indemnification
Any party contributing text or graphics should warrant
that its content does not infringe the rights of
a third party, meaning that its creations are original.
If your business does not have "errors and omissions"
insurance, this coverage is available and will insure
the business in the case of copyright or trademark infringement
matters.
The agency will want to be sure that the agreement
waives all warranties which may be implied by the Uniform
Commercial Code in its state. Although in most situations,
implied legal warranties apply only to products rather
than services, the conservative approach is to always
include the language required by law to waive these
warranties.
Usually, the agreement will also include a provision
which states that any party contributing content will
indemnify the other if its creations infringe the rights
of other parties. Indemnification means that in the
event that the non-creating party gets sued by another
party for copyright infringement, or other infringement
of a third party's rights, the creating party must reimburse
the non-creating party for all costs and expenses resulting
from this event.
A short form Advertising Agreement legal form by the
author is available for purchase here.
Cobranding and Affiliate Agreements
Cobranding refers to a relationship between parties
where one or both parties "brand" or in some
way promote the other party on its website. It most
often refers to situations where one party's website,
the cobranded party, is visible from within the website
of another party, the cobrander. Users of the cobrander
website see the top or side frame of the cobrander site
and a page from the cobranded website within it. The
cobranded site can reside on the server of either party,
but usually it remains on the cobranded party's server.
Cobranding is different than an affiliate program which
typically involve only banners or links to another party's
sites. Otherwise, both agreement may have similar provisions.
Typically, affiliate agreements are without negotiations
or signature and therefore are often more onerous in
requirements and terms.
Content Creation
The agreement should set forth that each party will
create and host its own website. Usually, the cobranded
party will submit a page of code to the cobrander to
display on the cobrander site and which, upon click-through,
will take the users of the cobrander site to cobranded
site. Any deadlines or technical requirements for the
cobranded content should be stated in the agreement.
Finally, the agreement should state the Uniform Resource
Locators involved and a description of the content involved.
Content Placement
and Hosting
The agreement should set forth where the cobranded
page is to be displayed on the cobrander site and where
the page is to be hosted.
Website Standards
Due to the close association between the parties, the
agreement may include a provision which states that
each party ensures certain minimum levels in maintenance
and creation of its website including the following:
a. the technical operation of its site
b. the accuracy and appropriateness of posted materials
c. that materials posted on its site do not infringe
d. that materials posted on its site are not otherwise
illegal
e. that its site has a privacy policy compliant with
law
Tracking
The cobranded site should have a technical tracking
systems to track users who get to the site from the
cobrander site if there is a revenue sharing arrangement.
The cobranded party may also want to include other requirement
regarding tracking such as the following restrictions
on the cobrander:
- trying to lure users to the cobranded site through
offering of special promotions
- incorporating new devices such as Palm Pilots, phones
or other items into the system, since most of these
will not yet work well with online purchase and tracking
systems
- trying to interfere with the cobranded site's business
- doing anything that could cause users to be confused
about the sources of any products or services
Trademarks
The agreement should include a license or other statement
giving permission for each party to display the other's
trademarks for the purposes of the agreement and that
such permission shall terminate upon termination of
the agreement. Depending on extent of the trademark
uses, this section may also include a trademark usage
policy from the trademark owner.
Payment
The agreement should set forth when and how the revenue
sharing payments will be issued and that a report detailing
the sales and revenue achieved will accompany such payments.
It is important to define under what circumstances payment
is made (what if the cart is abandoned and then rediscovered,
etc.) and what items will be deducted prior to calculation
of the revenue payment percentage (such as tax, shipping,
etc.) The cobrander may also wish to include an provision
which permits auditing of the sales and accounting records
of the cobranded party so that it has a way to periodically
confirm the accuracy in reporting and payment.
Liability Limits
The agreement may state liability limits for the relationship.
Such a provision could serve to limit liability if customers
of the cobranded party sue the cobrander or if either
party infringes third party rights with its content.
The provision should also waives parties' responsibility
for damages which are not "direct" legal damages.
Warranties and Indemnification
The agreement may contain a provision for indemnification
in the case of infringement by any content created by
either party. Indemnification means that in the event
that the non-creating party gets sued by another party
for infringement of a third party's rights, the creating
party must reimburse the non-creating party for all
costs and expenses resulting from this litigation.
Conclusion
Promotional agreements help clarify relationships and
ensure intended results and proper payments. Advertising,
Affiliate and Cobranding Agreement legal forms by the
author are available for purchase here.
1 Readers are cautioned not
to rely on this article as legal advice as it is
no substitution for a consultation with an attorney
in your state. Based
on jurisdiction and time, the law varies and changes.
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