Drafting an affiliate agreement: what belongs in it

Drafting an affiliate agreement involves clearly defining the core of the collaboration: the commission model, how referrals are measured (tracking), when and how payment is made, the term and termination, liability, and GDPR agreements regarding data processing. Formulating these elements concretely and measurably prevents most conflicts between advertiser and affiliate. Below, we will walk you through every component that belongs in a good affiliate agreement.

The short answer

1. Parties and roles: who is the advertiser, who is the affiliate.
2. Commission: model (per sale, lead, or click), percentage or amount, basis.
3. Tracking: measurement method, cookie duration and attribution rule.
4. Payment: installment, threshold, return correction and VAT.
5. Duration: fixed-term or indefinite, notice period.
6. Liability and GDPR: rules of conduct, indemnification, and processor agreements.

Parties and the nature of the cooperation

Start with a clear description of both parties and their roles. The advertiser offers a product or service; the affiliate promotes it through their own channels. Specify through which channels the affiliate may operate (website, newsletter, social media) and which methods are prohibited, such as unsolicited email or bidding on brand names in advertisements. This establishes from the outset what is and is not permitted.

Establishing the commission model

This is the part that causes the most disagreement in practice. Formulate it as concretely as possible:

• Model: pay-per-sale, pay-per-lead or pay-per-click.
• Amount: a percentage of revenue or a fixed amount per conversion.
• Basis: calculated on gross or net turnover, including or excluding VAT and shipping costs.
• Corrections: how returns, cancellations, and unpaid orders are processed.
• Tiered tiers: potentially a higher commission with higher turnover.

The more precise the basis, the less room for discussion during the settlement.

Manage tracking and attribution

Tracking determines to whom a sale is attributed. Without clear agreements on this, even the best commission model will not work. Document:

• Measurement method: cookies, tracking links, an affiliate network, or server-side tracking.
• Cookie duration: the attribution window, for example 30 days after the click.
• Attribution rule: last-click or first-click if a customer comes in via multiple partners.
• Reporting: which dashboard or overview the affiliate views and how often.

Due to browser restrictions on cookies, server-side tracking is becoming increasingly important; therefore, explicitly state how measurements are taken.

Payment and invoicing

Rule on when and how settlement takes place. Payment is customary monthly, only after a sale is finalized and the return period has expired. Include:

• Payment term: for example, within 30 days after the end of the month.
• Payout threshold: a minimum amount before a payout is made.
• Invoicing: does the affiliate invoice themselves or do you work with self-billing?
• VAT: whether VAT is charged on the commission.

Term, cancellation and termination

Choose between a fixed-term agreement or an indefinite-term agreement with a notice period (often one month). Also arrange:

• Interim termination: on which grounds and with what notice period.
• Immediate termination: in the event of non-performance, bankruptcy, or violation of the rules of conduct.
• Run-off: how are sales handled that still fall within the attribution window after termination.
• Removal obligation: the affiliate removes links and banners after the end.

Liability and GDPR

Include a clause obligating the affiliate to comply with laws and regulations — no misleading advertising, no spam, no trademark infringement — with an indemnity in the event of a violation. Additionally, limit their own liability, for example, to the commission paid over the last period.

For the GDPR: determine who is the controller and who is the processor, and whether a data processing agreement is required. Because tracking almost always involves personal data, cookie rules are also applicable: informing visitors and requesting consent for non-essential cookies. A brief practical example: a SaaS company working with dozens of affiliates included a single standard appendix containing GDPR and tracking agreements, ensuring that every new partner accepts exactly the same terms.

Honest recommendation

For a simple collaboration via an established affiliate network, you rarely need your own agreement; the network's terms usually cover the commission model, tracking, and payment. Drafting an agreement yourself or having one drafted is particularly useful for direct collaboration with partners, high commissions, exclusivity, or sensitive customer data. In that case, start with the six core components listed above and pay particular attention to properly wording the tracking, liability, and GDPR provisions, as these are where the greatest risks lie.

In-depth: view the affiliate agreement, first read what an affiliate agreement is , or discover when to have an affiliate agreement drawn up.

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