INSIGHT
NEGOTIATING AFFILIATE CONTRACTS : A LAWYER ’ S GUIDE
With the right knowledge and determination , affiliates can – and should try to – negotiate with third parties and ensure they contract on terms with which they are happy . Gemma Boore of Bates Wells Braithwaite provides practical advice to affiliates on the main terms they should seek to understand and , if necessary , negotiate with operators and networks .
A FEW YEARS AGO , the vast majority of iGaming operators and affiliate networks offered a standard cookie-cutter contract to affiliates . However , affiliate marketing has grown rapidly and that growth has spurred a change in the nature of affiliate contract negotiations , giving leaders more of an edge . As the market matures and an increasing number of new players make the game more competitive , affiliates are now getting around this one-size-fits-all approach as they seek – and win – contracts with more safeguards and protections .
This article provides practical advice for affiliates by setting out the main contractual terms that they should seek to understand and , if necessary , negotiate with their clients - operators and networks alike .
Read the contract It might go without saying , but you should always take the time to carefully look at all of the terms of a contract , not just percentage commission . The other side may seek to impose obligations on you that are unacceptable , or others that you don ’ t like but which you could live with if you had to . Have this in mind when you read the contract and , if there ’ s anything you don ’ t understand , have a qualified legal professional review the provision and explain its meaning .
Assess your bargaining power In theory , all terms of an affiliate contract are negotiable , but your negotiating power depends on your bargaining strength and whether the market is hot or cold . If you are dealing with a new operator or network which has yet to test ( or even formulate ) their standard terms , you can probably win many concessions but if you ’ re dealing with an established operator or network that offers attractive commission coupled with a good reputation for paying , you ’ ll have considerably less leverage . When necessary , trade off the less important issues to win concessions on the items that are more important . If you sense the client is thinking of turning away from the deal , ensure you emphasise which of the unresolved issues are most key , and focus on reaching an amicable agreement on those points .
Notwithstanding the above , many operators and networks will tell new affiliates , “ Our terms and conditions are on our website ”, but don ’ t just take this at face value . It ’ s not unheard of for online terms to be revised without notice , so even if the other party insists on sticking to their standard terms , it ’ s important to insist that those terms apply throughout the entire term of the contract to avoid having to abide by future changes that are unfavourable . If the other party resists this , get a separate signed agreement that they will obtain your consent in advance before amending the terms and conditions that apply to your contract ( or at least notify you of any changes in advance ).
Payment terms Payment terms can be perhaps the most unfavourable to the affiliate , and are the most frequently disputed . Not only do payment terms often state that payment will not be made for a significant number of weeks after referrals are made , but this is often caveated with a number of get-outs , such as a threshold needing to be reached before any money will be paid out , or payment being delayed until funds are actually received by the other party . Understandably , terms like this can cause significant cash-flow issues for smaller players .
46 iGB Affiliate Issue 57 JUN / JUL 2016