With certain apps potentially getting banned (you know the one 🫣), new apps on the rise, and market behavior changing, businesses are taking lots of things into consideration and are starting to consider new ways of marketing their business.
As we welcome 2025, one thing that I’m starting to see more of are affiliate partnerships! And as a business owner with an affiliate program myself, I loveeee to see this.
Partnering with affiliates means less marketing on your plate and *hopefully* more eyes on your offers and dollars in your bank.
The idea behind affiliate marketing is that people trust people – when one person sees someone they follow or look up to talking about and promoting something, they’re more inclined to buy it and try it.
In the past, affiliate partnerships felt like just an "influencer" thing, but I’m here to say that is NOT the case any longer! Businesses of all kinds are jumping on the affiliate bandwagon and while it can be a great model to add to your marketing arsenal, it also needs to be done correctly.
Without the proper legal safeguards in place, affiliate partnerships can quickly turn into headaches, leading to disputes, lost revenue, or even damage to your reputation. The key to a successful affiliate partnership is a strong contract that clearly outlines the terms and conditions of the relationship.
To help you launch your affiliate program with ease and start working with affiliates in a favorable way, in this blog post I’m sharing 5 common pitfalls of affiliate partnerships and how a robust agreement can help you avoid them!
5 Things To Avoid In Your Affiliate Partnerships (And How a Legally Sound Contract Can Help You Do It)
1. Giving an Inauthentic Opinion of the Product or Service
One of the biggest challenges in affiliate partnerships is ensuring that affiliates provide genuine and honest feedback about the product or service they promote. Misrepresentation can harm your credibility and lead to issues with your audience.
But even more than giving an honest opinion about a product or service, it’s also important that you ACTUALLY use the product or service that you’re promoting.
Even though this sounds insanely obvious, I can’t tell you how many times I’ve personally seen an affiliate promote something they don’t even use… and bestie, I’m just gonna go ahead and tell you – that’s ILLEGAL.
But let’s say you do actually use a product or service that you’ve been paid to promote and well, it’s not exactly your favorite. Maybe there’s some things you wish it did differently or you weren’t 100% happy with the results. It’s your obligation as an affiliate to convey that to your audience!
➡️ How a Contract Helps: A well-drafted affiliate contract includes clauses that require affiliates to give honest and accurate representations of your product, clear disclosure of any affiliate relationship, and prohibition of false or misleading statements.
By prioritizing transparency and honesty, you can build trust with your audience and ensure that affiliates promote your brand ethically.
2. Disputes Over Compensation
One of the main reasons that people want to become an affiliate for something is because they have the opportunity to earn money for promoting something that they love and use!
But if I know one thing about money, it’s that it can sometimesssss make people a little emotional (and not always in a good way 🥲).
Payment disputes can be a super common issue in affiliate partnerships, whether it’s due to unclear commission structures, missed payouts, or misunderstandings about how much money they will be making.
For example, an affiliate could expect to be paid for all leads they generate, but your intention could be to pay only for completed sales. Without a clear policy that outlines these details, this could result in a tricky situation.
➡️ How a Contract Helps: Your agreement should include detailed payment terms, such as commission rates, payment schedules, performance thresholds or criteria (e.g., valid leads vs. actual sales), and payment methods and timelines.
These clauses ensure both parties are on the same page regarding compensation, reducing the likelihood of disputes.
3. Failing to Use Affiliate Disclosures
One of the most overlooked but critical aspects of affiliate partnerships is the requirement for proper affiliate disclosures. Failing to disclose the affiliate relationship can lead to legal penalties and damage your business’s reputation.
Again, this is something that I see happening alllll the time on Instagram, TikTok, and even in blog posts. People will promote certain products or services with their affiliate links or discount codes and they will fail to provide a disclosure that they could earn compensation from anyone who purchases using their link or code.
Failing to disclose an affiliate partnership can cause both the affiliate AND the business or brand to get into hot water with the FTC, not to mention the way it can damage trust with your audience.
➡️ How a Contract Helps: An affiliate agreement includes clear disclosure requirements, such as, mandating that affiliates include proper disclaimers in their promotions, providing specific language or templates for disclosures to ensure compliance, and outlining consequences for failing to disclose the affiliate relationship.
These clauses not only protect your business legally but also foster trust with your audience by ensuring transparency.
If you aren’t sure what to say as a disclosure, it can be as simple as: “P.S. This post contains affiliate links, but I only ever recommend products or services that I love and use myself!”
4. Brand Misuse or Misrepresentation
The goal with affiliate marketing is so that you can be a little more hands off and trust that you have sales coming in from various sources, HOWEVER it’s important to remember that it’s still your brand that’s being put out there.
It’s for this reason that you need to be so crystal clear about your brand values, your mission, your vision and more so that your affiliates know how to uphold your reputation.
Your brand is one of your most valuable assets, and its misuse by an affiliate can have lasting consequences, especially if they accidentally (or sometimes even deliberately 🙃) use your logo, name, or content in ways that damage your brand’s reputation.
For example, an affiliate could create an ad using your logo alongside misleading claims about your product’s effectiveness. This not only would tarnish your credibility, but could also expose you to legal liabilities.
➡️ How a Contract Helps: Include a branding and intellectual property clause in your agreement that grants limited permission for the affiliate to use your branding assets, specifies approved uses and requires adherence to your brand guidelines, and prohibits unauthorized modifications or misrepresentations of your brand.
With these protections in place, you can ensure consistent and appropriate representation of your brand.
5. Unclear Termination Policies
And lastly, no matter how well a partnership begins, circumstances can change, and you may need to end the agreement – that’s just how business and life works!
But without a clear termination policy in place, ending the affiliate relationship can become complicated.
For example, let’s say an affiliate’s participation drops significantly, but there’s no clear clause in your agreement allowing you to terminate the partnership. This could leave you stuck in an unproductive relationship with no clear way out.
➡️ How a Contract Helps: A comprehensive affiliate agreement includes grounds for termination (e.g., breach of contract, poor performance, or unethical behavior), required notice periods for termination and post-termination obligations, such as removing promotional content or returning confidential materials.
By outlining these terms, you can end the partnership professionally and minimize disruptions to your business.
Your One Stop Legal Shop For Affiliate Agreements For Your Business
Overall, implementing affiliate partnerships in your business offers immense potential for growth, but they don’t come without risks.
Luckily though, a strong contract is your best tool for navigating potential challenges with affiliates, protecting your business, and fostering successful collaborations.
So, if adding an affiliate program is on your list for 2025, don’t forget to have legally sound contracts in place so that both you AND your affiliates get the best outcomes.
In The Boutique Lawyer Contract Template Shop, you can find everything you need to start your affiliate partnerships with ease, including:
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Affiliate Program Terms and Conditions – a proactive and essential legal agreement for businesses creating a structured and clear affiliate program that outlines clear terms and conditions between you and your affiliates
If you’re running an affiliate program, having solid Terms and Conditions is non-negotiable. Typically, these terms are presented to affiliates upon their registration to your program and while it may seem like a formality, it's a critical step towards establishing a mutually beneficial and legally sound affiliate program.
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Affiliate Agreement – a legally-binding agreement between you and an affiliate that stipulates expectations and boundaries while protecting you both
OR, if you want both, you can snag them in a bundle!
Here’s to making 2025 the year that you partner with others to grow your business even more. 🥂