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Sponsorship Agreement

This Agreement is entered by and between Jonas Adam, individually or collectively as the "Signee" and Jane Smith, as the "Signer", together referred to as the "Parties".
The Contract is dated [the date both parties sign].

1. Agreement terms

The Parties agree that the following agreement is dependent on the terms presented as follow:

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Sponsorship Agreement

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Sponsorship is most often associated with corporate sponsorship of an event or athletic activity, such as companies advertising at a football game. Sometimes they place their logos on the stadium itself, sometimes on the jerseys. Sponsorship is only limited by the creativity of the parties involved.

Sponsorship has also expanded into a really wide range of industries recently. For example, many companies are sponsoring Instagram users to promote their health and wellness, cosmetic, or outdoor products. This type of sponsorship is similar to when brands like Nike sponsor individual athletes to market their athletic apparel.

At the simplest level, sponsorship is a type of advertising. Companies use sponsorship deals to promote their products, services, or (in the case of non-profits) causes. It is the foundation of the marketing plan for many businesses. It can serve to increase their revenue or perhaps improve or alter the public perception of an organization.

Advertising is obviously a worthwhile venture! (Source

Sponsorship Explained

A sponsor is defined as “a person or an organization that pays for or plans and carries out a project or activity.”

The goal of sponsorship is to create an association between a particular person, place, or thing with a product or company. For example, if you hear the same product advertised during your favorite radio program for many months in a row, you may come to associate the two in your mind. To the sponsor, this is good news as it may give you a positive perception of the product even if you have not used it.

Sponsorship can be a great way to grow your business if you can identify a relevant audience, such as is found at sporting events. (Source)

Sponsorship is a useful tool because it can be mutually beneficial for both parties. The sponsor achieves their goal of increased advertising or publicity, and the entity being sponsored is given the funds or benefits they need in turn.

Association with beloved figures or teams can also create emotional connections to the sponsored product as well, which is tremendously beneficial to the sponsor.  This is what sets sponsorship apart from other forms of advertising. It is grounded in a relationship with the other entity, and that relationship can have a huge impact on the success of the deal.

Sponsorship Agreements

As with any business arrangement, it is imperative that sponsorship be conducted through a comprehensive legal agreement.

Sponsorship deals can be very tricky, and having the details outlined and documented will be incredibly helpful in the event of a dispute or misunderstanding. Anyone thinking of entering into such a relationship should be sure that both parties agree to a formal document. It is advisable to consult with a qualified and experienced lawyer, but you can also find sponsorship agreement templates online and modify them to suit your needs.

Sponsorship agreements are designed to protect both the sponsor and the sponsee. If one party is coming in at a distinct disadvantage, the standard agreement may be modified to provide them with more favorable terms. But usually, the agreement is in place to ensure that all interests are properly balanced.

Sponsorship agreements are legally binding documents and should be undertaken with serious thought and consideration of the potential ramifications.

What to include in a Sponsorship Agreement

Every individual sponsorship arrangement will be different. Is the sponsee an individual? A company? An event? Is the sponsor providing goods? Services? Funding? Is the sponsee expected to promote a product a certain number of times? For how long? Will there be a non-disclosure or non-disparagement clause included?

Because sponsorship is centered around the relationship between two parties, all potentialities cannot be predicted. It is therefore critical to be as thorough as possible in your agreement so that both parties know how to proceed in the event of a problem or dilemma.

While every agreement will vary significantly, there are a few elements that are absolutely necessary to complete a sponsorship agreement:

  1. The term of the contract. The agreement should indicate the start and end dates of the sponsorship, as well as the date the agreement was signed by both parties.
  2. The parties involved. The agreement needs to clearly indicate the sponsor and the sponsee, using full legal names or business names and descriptions of any applicable details (such as tax-exempt status). Contact information for all parties is also helpful.
  3. The purpose of the sponsorship. The agreement should outline in at least basic terms what the purpose of the sponsorship is for both parties. What does the sponsor hope to gain? What does the sponsee hope to gain? How will success be determined?
  4. Costs and compensation. In this section, describe what transaction will be occurring as part of this arrangement. Is the sponsor paying in money? Are they providing products to the sponsee at no cost? Are they providing knowledge and expertise? For whatever the currency may be, indicate the payment schedule and any contingencies.
  5. Rights, duties, and responsibilities of both parties. Describe in as much detail as possible what each party is permitted and expected to do as part of the agreement. Is the sponsee expected to promote a certain number of products within a certain period of time? How may the sponsee use the money given by the sponsor? For non-profits, there are strict rules governing the use of certain donations, and these need to be factored into the sponsorship agreement.
  6. Exclusivity of sponsorship. Is the sponsee permitted to advertise for other companies at the same time? Can she only enter into sponsorship agreements with companies that are in different industries? This is a clause that can cause a great deal of trouble if not clearly detailed and followed by both parties.
  7. Protection of intellectual property (IP). IP can be assumed to include taglines, logos, and brand names. Does each party have the right to use the other party’s IP during the period of this agreement? How will IP that is created as a result of the relationship be owned?
  8. Signatures. Official representatives of both parties need to sign and date the agreement alongside a licensed notary public.

Those are some of the most important and standard terms to include in a sponsorship agreement. However, there may be many other provisions important to a particular arrangement. Some of those include:

  • A non-compete clause
  • A non-disparagement clause
  • A non disclosure agreement (NDA)
  • A statement indicating which state shall govern the agreement (useful if the two parties reside or conduct business in different states)
  • A statement indicating the employment status of the sponsee (independent contractor or employee?)
  • A statement indicating that verbal agreements outside of this document are invalid
  • A trademark license (which could also be included in the clause on IP)
  • A jurisdiction clause (where disputes will be settled)
  • A dispute resolution and arbitration clause (what procedures will be used to settle disputes?)
  • A termination clause (what are the terms under which the agreement can be terminated by either party?)

What are Warranty and Indemnity Provisions?

There should be a warranty section of the sponsorship agreement that is granted by the sponsee, indicating that she will not behave in any way during the term of the agreement that causes harm to the sponsor. There should be a similar provision from the sponsor as well, protecting the sponsee from any acts undertaken by the sponsor.

As discussed, sponsorship agreements can take on many different forms due to the nature of the industry. The clauses and provisions described above do not constitute a complete list but should rather serve as a guide to help you get started. If you are comfortable outlining the content of these clauses, you may be ready to enter into an official sponsorship agreement. If you are able to form a sponsorship relationship that benefits you and your company or your clients, it can be incredibly lucrative.

Affiliate Agreements 

The modern world can be extremely difficult to sell products/services due to technology. The world has a global business where individuals and companies can work with people that are thousands of miles away. Affiliates are people or companies that are enlisted to help sell products. The creation of an affiliate agreement is imperative with the right affiliate is essential to help drive sales.

Affiliates do not have to purchase or store inventory as they receive a commission from each sale of a product. Many affiliates have websites, social media accounts, and popular blogs that drive organic traffic. Below are the specifics that will need to be present in an affiliate agreement:

  • Parties that are involved in the agreement must be included.
  • The location of all parties needs to be listed as states differ with the laws pertaining to affiliates. 
  • The responsibilities of the affiliate are important to list along with a non-compete clause from selling a nearly identical product from a competitor. 
  • The grounds for termination of the agreement have to be present as no sales or harassing sales tactics can reflect poorly on a brand. 
  • Compensation should be outlined explicitly to avoid conflict long-term.

The agreement needs to be created for the protection and best interests of all parties involved. Driving sales with an affiliate creates revenue and allow an online seller to earn a healthy income as well. 

Agency Agreements 

There are plenty of people that have entered into an agency agreement without even realizing it. Anyone that has bought a house has likely hired a lawyer or real estate agent if they do not have legal expertise. These arrangements are also called agent agreements as it gives a person the ability to act on behalf of their client. Below are the details that an agency agreement needs to contain to be considered legitimate: 

  • The names of all involved along with contact information and addresses need to be noted.
  • The description of the representation that is required is important as well so boundaries are set. 
  • Compensation should be set as well as to reduce conflict in the future.

Agency agreements are common, it is important to make sure all parties involved are protected and represented appropriately. 

Joint Venture Agreements 

Entering into a joint venture agreement can be an exciting and stressful time. These agreements are between two or more companies entering into a binding business agreement for a set period of time. Below are the important details to be included in a joint venture agreement to make it valid and legally binding:

  • The parties involved all need to be named with signatures included. The company name, as well as addresses, should also be in the agreement.
  • The length of the agreement is important as many joint ventures leave this timeline open. 
  • Description of expectations and how the venture is to work in terms of obligations. 
  • NDAs are commonly signed due to contracting work from one company to another. 

The truth is that working with another company can expand a business is a huge way. Agreements need to be signed in order to reduce any type of conflict or legal action in the future. 

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