Your Guide to Marketing Affiliate Agreements in Singapore

Last updated on June 2, 2024

Woman signing a contract

What is a Marketing Affiliate Agreement?

Need a Marketing Affiliate Agreement template? You can get one here.

A marketing affiliate agreement is a legally binding contract between a brand (that wants its products and/or services to be promoted and marketed) and an affiliate (who helps direct customers to the brand’s business in exchange for a fee).

Affiliate arrangements are usually online arrangements where the affiliate directs visitors of its website or social media channels to the brand’s website or online shop via affiliate links. These affiliate links are unique to each affiliate and will track how many visitors access the brand’s website via their unique link. The marketing affiliate agreement should cover key issues such as:

  1. The scope of the affiliate’s obligations; and
  2. How the parties will track the affiliate’s directing of traffic to the brand’s site (e.g. via the usage of links or unique promo codes usage);
  3. The fee structure (i.e. how much the fees are, payment methods, whether the fees are payable when visitors enter the brand’s website).

The agreement should also include clauses on technical legal issues such as confidentiality, intellectual property rights and indemnity.

Essential Terms and Clauses in a Marketing Affiliate Agreement

Names of parties

The parties to the contract need to be clearly identified using unique identification numbers (such as NRIC number for individuals, and UEN for companies).

Early due diligence checks will also allow the brand to verify if the affiliate has the legal capacity to enter into the contract (i.e. they are of the correct age).

Affiliate’s obligations and content

The contract should clearly set out the brand’s expectations of the affiliate and any required rules and restrictions on the affiliate’s marketing content for the brand.

It is in the brand’s interest to ensure that the affiliate only posts content in connection with the affiliate’s links and the brand:

  • That are aligned with the brand’s position;
  • That are not illegal; and
  • That does not infringe on the rights of third parties (e.g. defamatory, infringe the intellectual property rights of other parties).

The contract can expressly provide that the affiliate must comply with these requirements, and that a breach of these obligations will lead to immediate termination of the agreement and disabling of the affiliate’s link(s). It can also give the brand the right to require the affiliate to remove content posted in connection to the links.

The brand may also contractually require the affiliate to comply with its own marketing and branding guidelines.

The brand can also extract written representations from the affiliate to reduce the brand’s exposure to legal risks. Such representations would include that:

  • The affiliate has legal capacity to enter into the contract;
  • The affiliate’s social media channels or sites are controlled solely by the affiliate; and
  • The affiliate’s social media channels or sites do not contravene any laws or regulations.

Affiliate links

The contract should highlight how traffic directed by the affiliate to the brand’s site will be accurately tracked. Unique affiliate links are the most common form of tracking. Brands may also employ unique promotion codes for the affiliate to share with users, and users may utilise these promotion codes when completing their transactions.

The contract should also address that it is the affiliate’s responsibility to share the links correctly, and that the affiliate will not modify the links in any way.

Relationship between affiliate and brand

The contract should expressly set out the nature of the legal relationship between the affiliate and the brand. It should highlight that the affiliate is an independent contractor, and not an employee, representative or agent of the brand. An independent contractor means that the affiliate is entering into a contract for service with the brand, and the affiliate would have more individual control over their work (in contrast to a typical employer-employee relationship, where an employer has more control over the employee and the work).

This has several implications. For one, the affiliate cannot enter into contracts or make representations on behalf of the brand, and the brand cannot be held liable for any of the affiliate’s actions. For example, if the affiliate makes a misrepresentation on its social media channel that the product has certain features or functions (when, in fact, it does not) and gets into a dispute with any individual who relied on these misrepresentations, the brand will not be liable for such statements and is not required to assist the affiliate in the dispute.

Another important implication is that the brand will not be responsible for the affiliate as an employer would be for an employee. Accordingly, certain laws – such as the Employment Act – will not apply and the brand is not obligated to provide the affiliate sick leave days or make CPF contributions.

The brand may also wish to extract an indemnity from the affiliate for any actions that may cause loss or harm to the brand. For example, if the affiliate shares a defamatory post about a competitor’s brand while promoting its affiliate link for the brand, the competitor may pursue legal action against the brand. In such an event, the affiliate may be contractually required to pay the brand for any legal losses incurred as a result of the lawsuit.

This issue is usually dealt with in several different clauses such as a clause setting out the affiliate’s obligations and covenants, an indemnity clause and a standard clause setting out the relationship between parties.

Fees

The contract should set out the details of the fee payment structure for payments due to the affiliate from the brand. This should include how payments become due, how much the fees are, and when they should be paid out.

Each marketing affiliate agreement may differ in the exact payment structure. For example, some affiliate programmes will pay the affiliate for each unique click-through of the affiliate’s links. Conversely, other affiliate programmes will only pay the affiliate for completed transactions made by customers who entered the brand’s site via the affiliate’s unique link or by utilising the affiliate’s promotion codes. In the latter circumstance, parties may wish to set out whether payment for the transaction must be fully paid and any applicable refund periods must have expired before payment to the affiliate becomes due.

The payment terms will also set out whether the affiliate will receive a fixed fee for each completed transaction or a percentage of a completed transaction. In the case of the latter, the agreement should also set out whether the percentage is before or after discounts, promos, and taxes.

Another important term of the agreement will be when the brand is required to pay the fees to the affiliate. The agreement may provide that the fees are payable on a monthly basis, or that the brand will only pay the fees to the affiliate when a minimum amount has been accumulated.

Intellectual property

This clause states that the brand will allow the affiliate a limited licence to use its intellectual property (e.g. trademark, any copyrighted material) in its content for the purposes of promoting the brand and the links.

The clause may also set out whether the affiliate may use the brand’s intellectual property rights for any other purpose. For example, some affiliate programmes would allow their affiliates to practice “trademark bidding” where the affiliates target paid search advertisements when users conduct web searches on the brand’s name or trademarks.  It may also address the ownership of any new intellectual property rights created by the affiliate (e.g. any content created by the affiliate for the promotion of the brand).

If the parties do not come to an express agreement on this issue, the default position is that marketing posts made by the affiliate are owned by the affiliate and not the brand. While the brand may re-post such content, it may require further written consent by the affiliate before it utilises the affiliate’s content for any other purposes.

Exemption of liability

This clause protects the brand from certain liability.

It sets out that certain situations will not constitute a breach and that the brand will not be liable for any losses or to pay any compensation to the affiliate in those situations, including:

  • Periods where the brand’s site is under maintenance;
  • Any issues with the links or the brand’s sites;
  • Situations where the links have to be suspended or terminated; or
  • Deducting any part of the affiliate’s fees to pay any applicable taxes on the fees.

Confidentiality

This clause requires parties to keep information confidential. This may be limited to commercially valuable confidential information, so any information that is publicly available would not fall within this clause.

Term and termination

This clause states the duration of the contract, how a party may terminate the contract, the applicable notice period for terminating the contract and the effects of the termination.

The contract usually sets out that parties may terminate by:

  • Giving written notice for any reason whatsoever and the agreement will terminate after the notice period has expired; or
  • Giving written notice to terminate immediately if certain default events occur (i.e. a breach of the marketing affiliate agreement).

Generally, the termination for no cause clause (i.e. where a party may terminate for any reason or without specifying reasons, by simply giving the other party the required notice period) in marketing affiliate agreements will require only a short notice period. Affiliate arrangements that do not impose a minimum number of posts on the affiliate will allow either party to terminate the agreement with written notice on short notice since there is little to no implication for either party.

However, parties may want a longer termination notice period for certain arrangements. For example, an affiliate that is required to make a minimum number of posts and as well as create their own unique content would want a longer notice period so that the affiliate can enjoy more users accessing the link.

The termination clause also sets out that the brand may terminate the contract immediately for any breaches, and may disable the affiliate’s links with immediate effect.

When the contract is terminated, the clause also sets out how the remaining fees will become payable, and which obligations will continue in effect after termination (e.g. confidentiality).

General Clauses

These clauses are more boilerplate in nature and standard clauses in most contracts. They deal with specific issues in contract law such as interpretation and variations of the contract, third party rights, and notices. For the purposes of this guide, we have identified some of the more pertinent clauses for you.

Governing law

The governing law clause identifies which country’s laws are used to interpret and govern the contract. Different legal systems will interpret a contract differently, and how the contract is enforced may differ depending on the governing law. A lack of clarity on the governing law of the contract may lead to disputes between parties.

In the absence of an express governing law clause, it is usually presumed that the governing law will be the law of the country where the parties and the subject of the contract (i.e. the service) are located. Where parties are both based or registered in Singapore, it is most likely that the implied governing law would be Singapore law.

However, the implied governing law may be more ambiguous if one of the parties is based in or registered outside of Singapore. It may be even more complex to determine the applicable governing law of the contract when the services are related to the work done remotely/over the internet, which may not be restricted to a certain jurisdiction.

To avoid any confusion or ambiguity, parties may also contractually agree on the applicable governing law to their contract, and this would displace any implied governing law. Without this clause, there may be confusion as to what law should apply, especially if the affiliate and brand come from different countries.

For the purposes of this guide, we have set out the legal issues as interpreted under Singapore law. Accordingly, if you are relying on this guide and our template affiliate marketing agreement, we suggest that Singapore law should be the governing law of your contract.

Jurisdiction

The jurisdiction clause sets out the agreed-upon formal process for contract-related dispute resolution. Parties may decide which court or arbitration body would have the right to adjudicate their disputes. Once parties have agreed to submit to the jurisdiction of a country’s courts or arbitration, they will not be able to seek the assistance of other forums. For example, if parties have submitted to the exclusive jurisdiction of Singapore courts, they will not be able to bring a claim in a different country’s courts or seek arbitration.

In the absence of a jurisdiction clause, the parties can still bring their disputes to their country’s court. If the parties are based in Singapore and the choice of law is Singapore law, they would bring their dispute to the Singapore courts with no issues. However, parties may dispute which country’s courts can adjudicate the dispute if they are from different countries, or where the project is not limited to one jurisdiction. To avoid disagreement, parties may contractually agree to submit to the exclusive jurisdiction of a particular country’s court. Our template sets out that parties agree to submit the exclusive jurisdiction of the Singapore courts to interpret and adjudicate any contractual disputes.

Notices

The contract usually has several instances where parties may exercise their rights by giving the other party written notice. This would include the right to terminate, the right to demand payment or the right to require the affiliate to remove a post. The written notice clause will usually set out:

  • How notice can be given;
  • Where notice can be given;
  • Situations where notice is deemed given if the party has not definitively verified that the other party has received the notice; and
  • How parties may officially vary where notice should be given.

Marketing Affiliate Agreement Template

Need a Marketing Affiliate Agreement template? You can get one here.

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