What belongs in an affiliate agreement, a clause-by-clause guide

The affiliate agreement arrives as a Word document attached to an email, a template you downloaded, or the terms a new partner asks you to sign before they start promoting your products. Affiliate marketing itself is straightforward: a promoter earns a commission when their referral produces a sale. The agreement is what keeps that simple idea from turning into a run of arguments about what counts as a sale, who owns the content, and who answers for the claims an affiliate makes about your product.

This is a commercial contract between your business and the affiliate, not a consumer-facing document. It fixes the commission deal, sets the rules for how the affiliate may promote your brand, and says what happens when either side steps out of line. It supplements your website terms, which speak to customers, and it sits on top of whatever terms your affiliate platform imposes. If the platform's terms change, your agreement should still hold your program together.

What a working affiliate agreement covers

The clauses below are the ones that do the work in almost every Australian affiliate program. Not all of them will matter to every business, but each answers a question that will eventually come up.

Who is promoting what, and what counts as a sale

Arguments about money start with definitions, so this is where a careful draft spends its time. The agreement should name the actual legal entities involved, not trading names, and state which products or services are eligible, in which territories, and on which platforms. Then it should define the terms the commission calculation depends on:

Qualified Sale: the minimum conditions a transaction must meet to earn commission, for example an order that is paid in full and survives the refund period.
Commissionable Event: the action that earns commission, which can be a sale, a sign-up, a free trial, or a lead, depending on your model.
Cookie Window: how long after a customer clicks the affiliate's link a purchase still earns commission. Thirty days is common; seven is aggressive.
Refund Period: how long a customer can return the product, because a refunded sale usually means no commission.
Net Revenue: the figure commission is calculated on, typically the sale price minus discounts, refunds, chargebacks and taxes.

The most common drafting failure here is leaving "referral" undefined. If a customer reads the affiliate's post, then buys a week later without using the link, or buys through your own checkout, you need a rule for who gets the credit. Most agreements say commission is only earned when the sale is attributed to the affiliate's tracking link within the cookie window.

How commission is calculated and when it is paid

The commission clause is the commercial heart of the agreement, and it should be precise enough that a bookkeeper can apply it without asking you. It typically covers:

The rate: a percentage or a fixed dollar amount, and whether it is calculated on the GST-inclusive or GST-exclusive price. On a 10 per cent commission the difference is material.
When commission is earned: often only after the refund period ends, which avoids paying commission on sales that come back.
Payment timing and minimums: how often you pay, and the minimum balance before a payout is made.
What reduces commission: refunds, chargebacks, price drops, and sales made with a discount code.
Recurring commission: whether subscription renewals keep earning commission, and for how long.
The record of truth: which reports decide disputes, usually the affiliate platform's, and what happens if tracking fails or the affiliate's link stops working.

Two traps show up constantly. First, commission calculated on a "sale price" without saying whether GST is included, which produces a quiet argument at payout time. Second, silence about refunds, which leaves you chasing commission after the sale has been reversed.

What the affiliate can say about your product

This is the clause that keeps an over-eager affiliate from creating legal trouble for you. Misleading or deceptive conduct in trade or commerce is banned by s 18 of the Australian Consumer Law (the ACL, Sch 2 to the Competition and Consumer Act 2010 (Cth)), and s 29 of the ACL bans false or misleading representations about goods or services, including fabricated testimonials. The ACL treats a purported testimonial as misleading unless the person making it proves otherwise, and a company that contravenes s 29 can face a pecuniary penalty of up to $100 million, three times the benefit gained, or 30 per cent of adjusted turnover, whichever is greatest. Those penalties can also reach a person who is knowingly concerned in the contravention, so "the affiliate did it" is not a complete answer.

The marketing rules in the agreement should include:

No unsubstantiated claims: no promises of results, income or outcomes, and no "guaranteed" language you have not approved.
No fake reviews: no fabricated testimonials, ratings or social proof.
No impersonation: the affiliate must not present themselves as your business, your staff or your support team.
No implied endorsement: no "official", "approved" or "partner" language unless you have authorised it in writing.
Price discipline: rules for price claims, discount codes and limited-time offers, so the market sees one story.
A correction duty: an obligation to remove or correct non-compliant content promptly when you ask.

Many programs attach an approved-claims list as an annexure, so affiliates can copy and paste safe wording instead of inventing their own. The clause is only as strong as your willingness to enforce it, so it should connect to the suspension and termination rights below.

The brand assets they may use, and who owns what they create

Affiliates need your trade marks, logos, product images and marketing copy to do their job. The agreement should grant a licence to use those assets, and only those assets, for approved purposes, in approved channels, and for the life of the agreement. It should also say whether the affiliate may create their own assets using your brand, and it should prohibit registering domain names or social media handles that include your brand, which affiliates occasionally do to corner search traffic.

Copyright in content the affiliate creates belongs to the creator by default. If you want to reuse an affiliate's video on your own channels, the agreement needs an assignment or a broad licence of that content. Otherwise your best-performing ad can end up locked away with a former partner.

Email, SMS and paid advertising

If your program involves email or SMS marketing, the Spam Act 2003 (Cth) applies to messages with an Australian link. Section 16 of the Spam Act prohibits sending unsolicited commercial electronic messages without consent, and s 18 requires every message to carry a functional unsubscribe facility. The agreement should require the affiliate to hold records of consent and to honour unsubscribes within the Act's timeframes, because a spam complaint can get your domain flagged and reduce deliverability for everyone.

The major ad platforms also have their own policies on affiliate marketing, disclosure and restricted content. You cannot change those, but you can require the affiliate to comply with them in the agreement, and to show you the ads they are running if you ask.

Tracking, cookies and customer data

Referral programs run on cookies, pixels and unique links, and those mechanisms can collect personal information. The Privacy Act 1988 (Cth) generally applies to businesses with annual turnover above $3 million, so many small affiliate programs fall outside it, but the small business exemption has exceptions and is narrowing. Even if the Act does not apply to you, the agreement should deal with tracking: what methods you use, whether the affiliate may add their own, whether customer data can be shared with the affiliate or third parties, and what security standards apply if an affiliate ever sees customer information.

Your customer-facing privacy policy should explain, in plain English, how tracking and referral links work and how customers can manage their preferences. If the policy says one thing and the agreement allows another, the mismatch is a reputation problem waiting to happen.

Ending the relationship, quickly when it counts

Affiliate relationships can turn bad fast, when an affiliate posts something inflammatory, runs non-compliant ads, or starts spamming communities. The agreement should give you the right to suspend the affiliate immediately while you investigate, and to terminate for cause on breach, reputational harm or suspected fraud. It is also worth having termination for convenience on notice, so you are not locked into a partner who has stopped performing. When the relationship does end, the clause should also cover what happens to the brand licence, the final payment, the surviving obligations and the confidential information:

What ends: the licence to use your brand assets, which must cease immediately.
What is paid: a final commission calculation, usually to the date of termination, with commission forfeited for fraud or serious breach.
What survives: confidentiality, indemnities and dispute resolution clauses that keep working after the relationship ends.
What comes back: confidential information must be returned or deleted, and any content or data the affiliate holds must be accounted for.

Who answers for what

The final group of clauses allocates risk. A liability clause caps what each party can claim from the other and excludes losses that are hard to insure, such as lost profits. An indemnity from the affiliate usually covers losses you suffer because of their breach, their misleading conduct, or their use of your brand. Dispute resolution clauses commonly provide for good faith negotiation, then mediation, then the courts, and the agreement should state which Australian state or territory's law governs it.

Two traps appear here. An indemnity with no cap can dwarf the commissions the affiliate ever earned, which affiliates will resist, so a cap tied to commissions paid is a common compromise. And if the affiliate is overseas, a governing law clause is only as good as your ability to enforce a judgment, which is worth thinking about before you recruit internationally.

Optional clauses that earn their place

Depending on your program, a few more clauses are worth adding:

Exclusivity: worth including when you want one affiliate per category or channel, or when a major partner will only promote if they are the only one.
Audit rights: worth including when commissions are large enough that miscounted sales or fake traffic would hurt.
Non-solicitation: worth including when affiliates could poach your customers or your staff after the relationship ends.
Insurance: worth including in higher-risk niches, or where the affiliate runs events or handles physical goods.
Overseas provisions: worth including when affiliates sit outside Australia, covering governing law, enforcement and cross-border data handling.

How an Artificer Legal review would help

An Artificer Legal practitioner would start an affiliate agreement review at the definitions, because that is where commission disputes are won and lost, then work through the commission mechanics, the marketing conduct rules, the termination rights and the liability allocation in that order. We would push back on unlimited indemnities, one-way termination clauses that leave you no exit, and marketing rules with no enforcement pathway. We would insist on a defined Qualified Sale, suspension rights for reputational harm, an indemnity cap that reflects the size of the program, and survival clauses so your protections outlast the relationship. We would also check the agreement against your website terms and privacy policy, so the three documents tell the same story to customers, affiliates and regulators.

Start with the definition of a qualified sale

If there is one drafting choice that decides whether this document works, it is how precisely you define the transaction that earns commission. Every dispute in an affiliate program eventually becomes a question about what counts: whether the sale was attributed to the right link, whether it happened inside the cookie window, whether the refund wipes the commission, whether the renewal still pays. An agreement that answers those questions in writing, before money is due, rarely needs a lawyer to interpret it. An agreement that leaves them open hands the argument to whoever is loudest at payout time.

The essentials, in short: a written agreement with each affiliate that defines the commissionable event and payment mechanics, sets clear marketing conduct rules backed by the ACL, licences your brand assets on your terms, requires compliance with the Spam Act and platform policies, deals with tracking and customer data, and gives you fast suspension and termination rights. A lawyer's review is worthwhile when the program grows, when affiliates start running paid ads, or when a dispute or complaint first appears.