If you market your products or services through affiliate marketing (paying a commission to other people to send customers to your website), you should have an affiliate agreement. An affiliate agreement is a statement of terms and conditions that affiliates must agree to abide by. Some of the issues that you might want to cover in your agreement include:

1. affiliate commission amounts
2. when the affiliate will be paid
3. website restrictions
4. linking and tracking
5. ppc and coupon guidelines
6. affiliate termination procedures and reasons
7. return policies
8. maximum or minimum payout amounts
9. limits to your liability

How affiliate marketing works (source: Wikipedia)

Your affiliate agreement can be as formal or informal as you like. I’ve got some examples of both types below.

Examples of short affiliate agreements

Unconventional Guides affiliate agreement

Johnny B. Truant affiliate agreement

Example of formal affiliate agreement

AFFILIATE AGREEMENT

This agreement describes the terms and conditions for participation in the (Insert Your Affiliate Program Name Here) Affiliate Program. The terms “Affiliate,” “you,” and “your” are referring to you, the applicant. “We” and “our” refer to (Insert Your Affiliate Program Name Here).
We are independent parties and this agreement will not form any partnership.

AGREEMENT DURATION

This agreement will begin upon our acceptance of your affiliate application and will end when terminated by either party.

Termination may happen at any time, with or without cause, by giving the other party written notice of termination.

MODIFICATION

By posting a Change Notice or a new agreement on this site, we may modify any of the terms and conditions within this Agreement at any time and at our sole discretion. These modifications may include, but not limited to changes in the scope of available referral fees, fee schedules, payment…

Continue reading this sample affiliate agreement (please note that this link to the sample affiliate agreement does not imply an endorsement of the Afftraq affiliate tracking system. I don’t know anything about the Afftraq service – I just like their sample agreement.)