An advertising agency services agreement usually arrives in one of two ways. You are the agency that has outgrown email quotes, and you are sending a client your own terms for the first time. Or you are a business that has just appointed an agency, and its standard agreement is sitting in your inbox waiting for a signature. Either way, what you sign decides who owns the campaign work, who pays the media bill when something goes wrong, and what happens if the campaign misses its targets.
The agreement does one job. It sets out the services the agency will deliver, the fees and media spend the client will pay, and what each side can do if the other does not perform. It works alongside the media plan and insertion orders that record each specific buy, and it cannot override the platform terms that govern the ad accounts themselves. Where the agreement is silent, the general law fills the gap, and that is rarely what either party wants.
The clauses that carry the deal
The clauses below are the ones that matter commercially. They are worth reading as a set, because each one quietly depends on the others: the scope of work sets what the agency owes, the fee clause sets what the client pays, and the IP clause decides who keeps what when the work is done.
Scope of work and how "done" is judged
The scope of work is the clause that gets skimmed and the one that decides most disputes. It needs to describe the services in enough detail that a third party could look at the finished work and say whether it matches. That means covering the creative work (campaign concepts, copy, design, video), the channels the agency will manage (Google, Meta, LinkedIn, programmatic), media planning and buying, and reporting. Three details decide whether the clause does its job:
- Deliverables: how many of each type, over what period. "Campaign concept" is not a deliverable; "two campaign concepts, each with a headline, three ad variants and a 30-second video script, delivered by 30 June" is.
- Revisions: how many rounds of changes the client gets before additional fees apply, and what counts as a revision.
- Acceptance: how the client tells the agency the work is approved, and what happens if the client simply stays silent and lets the deadline pass.
The trap is agreeing to a set number of hours instead of outcomes. Hours invite arguments about how the time was spent. Deliverables and deadlines give both sides something concrete to measure.
There is also a structural reason the scope clause carries so much weight in Australia. A business client has no statutory backstop to fall back on. Under s 3 of the Australian Consumer Law (Schedule 2 of the Competition and Consumer Act 2010 (Cth)), services are supplied to a "consumer" only where the price is $100,000 or less, or the services are of a kind ordinarily acquired for personal, domestic or household use. Advertising services bought for a business are neither, so the guarantee of due care and skill in s 60 of the Australian Consumer Law does not attach. The words of the scope clause are the entire definition of "done".
Who owns the creative work
Under Australian copyright law, the default owner is the creator. Section 35(2) of the Copyright Act 1968 (Cth) gives the author of a literary, dramatic, musical or artistic work ownership of the copyright. The old commissioned-work rule, where the person who paid for a work owned it, now survives only in a narrow corner: s 35(5) covers photographs taken for a private or domestic purpose, portraits and engravings. A campaign video, a tagline, a set of ad designs and a website are none of those, so unless the agreement says otherwise, the agency owns the copyright in everything it creates and the client ends up with a bare right to use the finished work for that one campaign.
The drafting choices in the IP clause are:
- Assignment to the client: the agency assigns copyright in the campaign work to the client, usually on full payment of fees, so the client can reuse and adapt the work.
- Licence back to the agency: the agency keeps a licence to show the work in its portfolio and pitch materials, which most agencies will ask for.
- Third-party material: stock footage, music, fonts and images are usually licensed, not owned, and the agreement should say who pays for those licences and whether they transfer with the work.
Clients reviewing an agency agreement should treat an IP clause that is silent on assignment as a red flag. Agencies drafting one should remember that a grudging IP clause is one of the fastest ways to lose a renewal.
Fees, media spend and who pays the platforms
Agency money comes in two streams, and the agreement needs to separate them cleanly. Agency fees are what the agency charges for its time and thinking. Media spend is the client's money moving through the agency into placements. The options are:
- Fixed fees or retainers: the agency charges a set amount for the creative and account management work.
- Commission or markup: a percentage of media spend, which aligns the agency's income with the size of the buy.
- Pass-through of media costs: the agency acts as the client's agent in buying placements, and the invoices are paid either by the client directly or by the agency and on-charged.
The direct invoicing question matters more than most agencies expect. Depending on how the ad accounts are set up, the platform may invoice the client directly. Google and Meta both offer monthly invoicing, and the billing entity on an account can be either the agency or the advertiser. If the platform invoices the client directly and the client does not pay, the platform can pause the campaigns, and the client may well blame the agency for the outage. The agreement should state who is responsible for paying which invoices, and should make clear that a client's failure to pay third-party invoices is the client's breach, not a failure by the agency.
The fee clause should also address rebates. Agencies sometimes earn volume rebates from media owners, and the agreement should say whether those are passed back to the client or retained as part of the agency's margin. Leaving it unsaid invites a painful conversation when the client audits the spend.
Who can approve media spend
Media buying moves fast. Auction-based placements, short booking deadlines and last-minute rate negotiations mean the agency needs a client contact who can say yes without waiting for a board meeting. The agreement should name that person, record their role, and set out how approvals are given (usually by email, with a confirmation chain kept for every buy).
There is a statutory reason to get this right when the client is a company. Under s 129(3) of the Corporations Act 2001 (Cth), a person dealing with a company can assume that anyone the company holds out as an officer or agent has the authority that kind of officer or agent usually has, and s 128 prevents the company from later asserting that the assumption was wrong. But s 128(4) withdraws that protection if you knew or suspected the person had no authority. Naming the authorised contact in the agreement, and getting the client to confirm that person's authority in writing, converts "I thought she could approve it" from a losing argument into a documented fact.
Exclusivity and conflicts of interest
An agency that works with two competitors in the same category needs to say so. The exclusivity clause is where that is managed, and the variants are worth understanding from either side of the table:
- No exclusivity: the agency works with any client, including competitors of the client, and the client accepts that.
- Category exclusivity: the agency will not take on a direct competitor of the client, usually for the life of the agreement or for a defined period after it.
- Conflict disclosure: either party must tell the other about an actual or potential conflict, and the agency will put a confidentiality wall in place so the two clients' strategies do not cross.
The drafting choice that matters is what happens when a conflict appears mid-campaign. Does the agency have to resign one client, or is disclosure plus a confidentiality wall enough? Most agencies will resist an obligation to resign, because it gives the client a veto over new business. Clients, in turn, should decide whether they genuinely need category exclusivity or whether disclosure and a wall protect what they actually care about, which is their strategy staying private.
Termination and what happens to booked media
Media is the reason an agency agreement needs a careful termination clause. By the time either party wants out, the agency may have booked placements that cannot be cancelled: billboards, television, out-of-home and programmatic commitments all have non-cancellable windows. A termination clause that ignores that reality leaves whoever terminates holding a bill. The clause needs to address three things:
- Termination for convenience: either party can end the agreement on notice (30 or 60 days is common), with the client paying for work done and media committed to that point.
- Termination for breach: the innocent party can terminate if the other side breaches and fails to cure within a set period.
- Consequences on termination: the client's access to its ad accounts, its data and its creative; whether the IP assignment or licence survives; and a final invoice within a set number of days.
A client should also check that termination returns what is theirs: account access, campaign data and the contact lists that were built during the campaign. An agreement that is silent on those handover steps makes termination a hostage situation.
Dispute resolution
Most agency disputes are small and about money: an unpaid invoice, a deliverable that missed the mark, a media bill that was never approved. The dispute resolution clause is what keeps those arguments cheap. A typical escalation ladder runs:
- written notice describing the dispute;
- a meeting between senior representatives of each side within a set number of days;
- mediation if the meeting does not resolve it; and
- only then, court proceedings.
Two details make the clause work. First, the client should give notice in writing, so the dispute is dated and described before it hardens. Second, the clause should state that undisputed amounts keep being paid while the dispute runs. An agency that withholds all work because one invoice is disputed turns a small argument into a termination, and a client that withholds payment for everything because one deliverable missed the mark does the same in reverse.
Optional clauses worth adding
Not every agency agreement needs every one of these, but each earns its place in the right circumstances:
- Results or KPI commitments: only include if the agency will genuinely stand behind measurable targets, and draft the targets so they can be verified. A promise of "guaranteed 10,000 clicks" that the campaign cannot deliver is the kind of statement that can amount to misleading or deceptive conduct under s 18 of the Australian Consumer Law, so the numbers need to be real.
- Confidentiality and non-solicitation: worth including whenever the agency will see the client's customer data, pricing or strategy, or when the client's staff will work closely with the agency.
- Liability cap and insurance: cap the agency's liability to the fees paid (or a multiple of them), and require the agency to hold professional indemnity insurance. The trigger is the size of the media budget the agency is handling.
- Data handling: if the campaign involves personal information, whether for targeting, customer lists or CRM work, the agreement should say who owns the audience data and who is responsible for privacy compliance.
- Auto-renewal: if the agreement rolls over automatically, require written notice to exit before the renewal date, or the client is locked in for another term without a decision.
How an Artificer Legal lawyer would approach your agency agreement
When we review or draft an agency services agreement, the first question is whether it is a standard form contract. If the agency works from one template and the client is a small business, the unfair contract terms regime in the Australian Consumer Law applies. Under s 23 of the Australian Consumer Law, a small business contract is one where a party employs fewer than 100 people or has turnover under $10 million, and an unfair term in a standard form contract is void. Since the regime was strengthened, proposing or relying on an unfair term can also attract penalties. Terms that commonly fall foul include unilateral variation clauses, broad indemnities and one-sided termination rights, so we would push back on those in any agency template.
We would then work through the commercial clauses in a set order. Scope of work and fees come first, because they set the price of everything else. IP ownership comes next, because it decides what the client actually owns at the end. Then liability caps and insurance, then termination, and dispute resolution last. We would also check that the authorised contact clause names a real person with documented authority, that the media spend clause says who pays the platforms, and that the acceptance criteria are specific enough that a court could apply them without guessing.
The scope of work is the definition of the deal
The scope of work is the clause that most often decides who wins when an agency relationship sours, and it is usually misdrafted. A business client has no consumer guarantee to fall back on. Advertising services are not bought as a consumer under s 3 of the Australian Consumer Law, and the guarantee of due care and skill in s 60 never attaches to the relationship. "The work was not up to scratch" is only ever measured against what the agreement said would be delivered, and if the scope says "campaign concept", the client has received a campaign concept, whether they like it or not. Write the scope clause as if every word of it will be quoted back at you in a dispute, because it will be.
The rest of the agreement manages the money and the exit: who owns the creative, who pays the media platforms, who can approve a buy, how termination unwinds booked media and how disputes are escalated. Each of those clauses is negotiable, and each deserves attention. But the scope of work is the one you cannot afford to leave vague, because it is the definition of the deal itself.