Affiliate Agreement Template: How to Write It

An affiliate agreement is the contract that turns a casual promotional relationship into a predictable, scalable channel. It tells a partner exactly how they earn, what they're allowed to say, when they get paid, and what happens if either side wants out. Get it right and affiliate marketing becomes one of the lowest-risk ways to grow revenue, since you pay only for results. Get it wrong and you invite commission disputes, brand damage, and even regulatory trouble.

This guide explains what an affiliate agreement is, the clauses every one should contain, how to structure commissions and payment, and the mistakes that quietly cost merchants money.

What is an affiliate agreement?

An affiliate agreement (sometimes called an affiliate marketing contract or partner agreement) is a legally binding contract between a merchant, the business selling a product or service, and an affiliate, an independent partner who promotes that product in exchange for a commission on the sales or actions they generate.

The affiliate drives traffic using a unique tracking link, coupon code, or promo identifier. When a visitor they sent completes a qualifying action, the merchant's tracking system attributes it to that affiliate and credits a commission. The agreement is what defines every part of that arrangement: who qualifies, what counts as a sale, how much the commission is, when it's paid, and the rules the affiliate must follow.

Unlike a one-off services contract, an affiliate agreement governs an open-ended, performance-based relationship. Nobody is obligated to deliver a fixed amount of work. The affiliate promotes as much or as little as they choose, and the merchant pays strictly for measurable results.

Why a written affiliate agreement matters

It's tempting to run an affiliate program on a handshake or a few lines in a signup form. That works until it doesn't. A proper written agreement protects both sides:

• For the merchant: it caps your liability for what affiliates say, bans spam and trademark bidding, lets you claw back fraudulent commissions, and gives you a clean way to terminate bad actors.
• For the affiliate: it locks in the commission rate, defines the attribution window so sales aren't stolen by a last-click rule they didn't expect, and sets a firm payment schedule.

Affiliate marketing is also one of the more regulated forms of advertising. The FTC treats affiliates as endorsers, which means undisclosed paid promotion can create legal exposure, for the affiliate and the merchant whose product is being promoted. A written agreement is how you push compliance obligations onto the affiliate and document that you required honest disclosure.

Key clauses in an affiliate agreement

1. Definition of the parties and relationship

Name both parties by full legal name, and state plainly that the affiliate is an independent contractor, not an employee, partner, or agent of the merchant. This single clause prevents the affiliate from binding the company to obligations and clarifies that the affiliate handles their own taxes and business expenses.

2. Scope of the affiliate program

Describe what the affiliate is being enrolled to promote: specific products, a whole catalog, or a particular campaign. Specify the approved promotional channels (a blog, email list, social media, or paid search) and reserve the right to approve or reject channels. This is also where you grant a limited license to use your brand name, logos, and approved marketing assets, while making clear the affiliate gets no ownership of your intellectual property.

3. Commission structure

This is the heart of the agreement. Spell out:

• The commission rate: a percentage of sale value, a flat amount per sale, or per lead/signup.
• What counts as a commissionable event: a completed purchase, a qualified lead, a subscription, a first-time customer only, etc.
• The base for percentage commissions: gross sale, or net of refunds, shipping, and taxes.
• Tiers or bonuses, if any: higher rates above a sales threshold, or recurring commissions on subscription renewals.

Ambiguity here is the number-one source of affiliate disputes. "10% commission" means very different things depending on whether it's calculated on gross revenue or net-of-refund revenue.

4. Attribution and tracking

Define how sales are tracked (cookies, unique links, coupon codes) and the attribution window, the number of days after a click during which a resulting sale is still credited to the affiliate (30, 60, or 90 days is typical). State the tie-breaking rule when more than one affiliate touched a sale (usually last-click). Make clear the merchant's tracking records are the authoritative source for calculating commissions.

5. Payment terms

Cover the full payout mechanics:

• Payment schedule: monthly, net-30, or a minimum-balance threshold before payout.
• A locking/holding period: commissions held (often 30 to 60 days) until the refund window closes.
• Payment method: PayPal, bank transfer, store credit.
• Tax handling: collecting a W-9 from US affiliates and issuing a 1099 above the reporting threshold.

6. Prohibited conduct

Protect your brand by banning the practices that get programs in trouble: bidding on your trademarked terms in paid search, spam email, false or exaggerated claims, cookie stuffing, self-referrals, coupon-site abuse, and promotion on objectionable or infringing sites. Reserve the right to reverse commissions earned through any prohibited method.

7. FTC and advertising compliance

Require the affiliate to comply with all applicable advertising laws and to clearly disclose their material connection to the merchant in every promotion, consistent with FTC guidelines. Make a compliance breach grounds for immediate termination and commission forfeiture. This clause is what shifts the disclosure burden onto the affiliate and documents your good-faith effort to require compliance.

8. Term and termination

State that the agreement is ongoing and that either party may terminate at any time with written notice, with or without cause. Address what happens to pending commissions on termination. Typically, earned commissions for valid, non-refunded sales are still paid, while the affiliate must stop using your brand assets immediately.

9. Confidentiality and governing law

If affiliates receive non-public information such as unreleased products, internal conversion data, or special pricing, add a confidentiality obligation or a separate non-disclosure agreement. Finally, specify the governing law and where disputes are resolved, so a jurisdiction fight doesn't precede the actual dispute.

How to write an affiliate agreement: step-by-step

Step 1: Identify the parties. Use full legal names. For the merchant, include the business entity and state of formation; for the affiliate, capture the individual or business that will receive payment.

Step 2: Define the program and what's being promoted. List the products or campaigns, the approved channels, and the brand assets the affiliate may use.

Step 3: Set the commission. State the rate, what triggers a commission, the calculation base, and any tiers or recurring payouts. Leave no room for interpretation.

Step 4: Define attribution. Specify the tracking method, the attribution window in days, and the rule for resolving overlapping claims.

Step 5: Lay out payment terms. Schedule, minimum threshold, holding period, method, and tax documentation.

Step 6: Add the rules and compliance obligations. Prohibited conduct, FTC disclosure requirements, and the consequences for violating them.

Step 7: Cover term, termination, and the legal boilerplate. How the relationship ends, what happens to pending commissions, confidentiality where relevant, governing law, and signatures from both parties.

Affiliate agreement vs. commission agreement vs. referral agreement

These three contracts overlap, and people often use the names interchangeably, but they govern different relationships:

• An affiliate agreement covers an ongoing, performance-based marketing relationship where a partner promotes to a broad audience through tracked links and earns a percentage on resulting sales.
• A sales commission agreement typically governs a salesperson or rep, often someone closer to your business, earning commission on deals they personally close.
• A referral agreement is narrower still: a fixed reward for introducing a specific, named prospect, with no expectation of ongoing promotion.

If your relationship involves continuous promotion to many people through tracked links, you want an affiliate agreement. If it's an individual closing deals or sending occasional leads, one of the other two usually fits better.

Common mistakes that cost merchants money

Vague commission definitions. "You earn 20%" without stating the base, the commissionable event, and the refund treatment guarantees a dispute the first time a big refund hits.

No attribution window. Without a defined window and a last-click rule, affiliates argue over who "owns" a customer, and you end up paying twice for one sale.

Skipping the clawback clause. If you can't reverse commissions on refunds, chargebacks, and fraud, affiliates can game the system and you're stuck paying for revenue you never kept.

Ignoring FTC disclosure. Undisclosed affiliate promotion is a regulatory risk that can land on the merchant, not just the affiliate. Make compliant disclosure a contractual requirement.

No prohibited-conduct list. Without explicit bans, affiliates may bid on your brand name in search ads, spam your prospects, or make claims you'd never approve, all under your brand.

Treating it as a fixed-term services contract. Affiliate relationships are open-ended and performance-based. Borrowing language from a consulting agreement that assumes a fixed scope and deliverables creates obligations neither side intends.

When to use an affiliate agreement

• Launching an affiliate or partner program for an ecommerce store, SaaS product, or course.
• Onboarding influencers or content creators who will promote with tracked links. Pair it with a content creator agreement if they're also producing branded content.
• Bringing on a power affiliate who needs custom commission tiers or access to confidential conversion data.
• Formalizing an informal arrangement you've been running on a handshake, before it grows large enough to cause disputes.

For the underlying principles of what makes any of these contracts enforceable, offer, acceptance, consideration, and clear terms, see our primer on the elements of a contract. And because affiliate agreements are almost always signed remotely, electronic signatures are the practical way to get both parties on the record.

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