What Is a Marketing Agreement?
Generally, Marketing agreements are considered as contracts that are made among the professionals of marketing, companies engaged in marketing activities and individual marketing companies, etc. Marketing agreements are made with the intention of the promotion of goods and services. Also, to avoid any legal conflict in the future in terms of advertising and promotion of goods and services. Some of the basics and essential elements of the agreement are discussed below;
When Is a Marketing Agreement Required?
As discussed earlier, the primary purpose of this agreement is to maintain clarification between the parties entering into the contract to avoid any miscommunication about the marketing of goods and services. This agreement is one of the essential tool required for the below-mentioned scenarios;
- When a professional marketing team is necessary for the promotion of goods and services
- When a marketing professional is needed to be appointed for the promotion of the goods and services
- When the businesses and makers of the products ensure that the brands they are presenting are equivalents according to the vision and mission of the company
What Should Be Included in a Marketing Agreement?
The following are the details that should be mentioned in this agreement:
- Names of the Parties entering into the agreement
- Relationship between the parties, for example, partners, principal or agent, etc.
- Details of the Compensation
- Duties and Obligations of both the parties entering into the contract
- Duration of the Agreement
- Expenses Incurred during the formation of the agreement
- Date of Expiry of the Agreement and Renewal Date if any
- Terms and Conditions of the Agreement
- Methods of Termination of the Agreement
- Modification in the Agreement as required
- Attorney Fees
- Governing Authority
- The validity of the agreement
How to Draft a Marketing Agreement?
The following are the steps for the drafting of an agreement:
- Names of the Parties who are entering into the contract who may be individuals, partnership firm, Agency or Company
- The relationship between the Parties which may be equal owners, manufacturer, and retailer, partners, principal or agent if any
- Details of the duties and obligation that must be performed and exercised by both the parties during the tenure of the marketing agreement
- The details of the compensation that will be paid by the one party to another
- The details of the expenses that will be borne by the parties
- Details of the terms and conditions and duration of the agreement and renewal date if required
- The name of the governing law which will govern the agreement
- Details of the modification or changes as needed from time to time by the parties involved in the transaction
- The details of the independent counsel by both the parties
Advantages and Disadvantages of the Marketing Agreement
There are many advantages of the agreement which are as follows;
- For small and medium businesses, this agreement helps to save resources as well as time, which includes maintenance of operation cost, bookkeeping cost, etc.
- This provides the employees with better exposure to working on their priorities for the development of the product and also their productive position in the company
- This helps to earn expertise in the particular field including specialized knowledge and optimization of energy
The following are some of the disadvantages of the agreement;
- It may damage the reputation of the business as in the case of the marketing agreement, and there are low chances of transparency as the business has to disclose every detail of the business to the contracting party, which may not be correct in the long run.
- Another important aspect is that there may be a conflict of interest between the parties as the contracting party may be the client of the competitor, and the confidential information of the business may be leaked to the competitions.
- Surrendering the advertising and promotion of the goods and services of the business to another business, which may not lead to severe losses in the future and also the company may lose control over its own decisions related to the marketing and advertisement of goods and services.
[Also Read: Advertising Marketing Agreement]
What Happens in Case of Violation?
Generally, violation in an agreement or contract in law is known as breach of contract or agreement. In case of breach of agreement, the innocent party may file a lawsuit in court against the breaching party for the violation of the agreement. In case the innocent party has suffered any losses and damages due to the conduct of the breaching party, it can also claim for the damages and losses from the breaching party.
However, there may be different scenarios for the violation of an agreement. The court will consider the facts and then will decide accordingly regarding the breach of the terms and conditions of the agreement by both parties.
Base on the analysis, the bottom line is marketing agreements are these days essential elements involved in the promotion of goods and services. This helps in securing the interests of both the parties involved in the promotion of the goods and services. Agreements can be enforced only against the parties who have the intention to enter into an agreement. Nevertheless, marketing agreements are considered as an essential element while hiring a third party for the promotion of goods and services of a business or company.
Sample Marketing Agreement
You can download the sample agreement below.