Affiliate Agreement Red Flags: Six Clauses to Check Before You Join
This page is general information, not legal advice.
An affiliate program agreement sets out how you get paid for sending customers to a merchant. That covers what counts as a sale, how it gets tracked, when you're paid, and what happens if either side walks away. The merchant or network writes it, and most programs are click-to-accept, so it's easy to sign up without reading it. This page covers six clauses that often move risk onto the affiliate. For each one you get an illustrative example, why it matters, and wording you can propose. Large networks may not negotiate, but direct deals and higher-volume partners often can. The rules on unfair terms, disclosures and online marketing vary by jurisdiction.
The example clauses below are illustrative. They are not taken from any real company's agreement.
1. Commission rates the merchant can change at any time
A typical clause might read: "Company may modify the commission rates, program terms or this Agreement at any time. Affiliate's continued participation in the Program constitutes acceptance of the modified terms."
Why it works against you
You might spend months building content, rankings and an audience around a rate that gets cut overnight. If the agreement doesn't say whether changes apply to traffic you've already sent, a cut could even hit sales that are still pending. And when notice is just an update to a web page, you might not find out until your next payout is smaller than expected.
What to ask for instead
Sample wording to propose: "Company will give Affiliate at least 30 days' written notice by email of any change to commission rates or material terms. Changes apply only to sales referred after the effective date. Affiliate may terminate without penalty before the change takes effect."
2. Open-ended commission reversals and clawbacks
A typical clause might read: "Company may reverse or recover any commission for orders that are returned, cancelled, charged back or deemed fraudulent by Company, at any time and in its sole discretion."
Why it works against you
Taking back commission on a genuine refund is common. The trouble is a reversal right with no time limit and a "deemed fraudulent" test that the merchant decides by itself. That could let it pull back money you were paid long ago, or take it out of future earnings, without showing you any evidence. See clawback clauses explained.
What to ask for instead
Sample wording to propose: "Commissions may be reversed only for orders refunded or charged back within the stated return period. After that period, commissions are final. Company will give Affiliate written reasons and supporting records for any fraud-related reversal, and Affiliate may dispute it."
3. Tracking where the merchant's records are final
A typical clause might read: "Company's tracking system shall be the sole and conclusive determination of all referrals, sales and commissions. Company is not responsible for tracking failures, cookie deletion or technical errors."
Why it works against you
Your income depends on tracking you can't see or check. If links break, the attribution rules change or the cookie window gets shorter, you lose the commission and you can't prove it. A "sole and conclusive" clause can make it hard to challenge errors, even ones the merchant caused.
What to ask for instead
Sample wording to propose: "Company will state the attribution model and cookie duration in writing and give advance notice of any change. Affiliate may request reasonable reporting data to verify commissions. Company will pay commissions it can reasonably confirm were lost due to its own tracking errors."
4. Payout thresholds and forfeiture on termination
A typical clause might read: "Commissions are payable only once Affiliate's balance exceeds the minimum payout threshold. Upon termination for any reason, all unpaid commissions are forfeited."
Why it works against you
A high payout threshold means the merchant holds your money until you reach it. A forfeiture clause on top of that means a smaller affiliate who gets dropped, or who decides to leave, could lose everything they earned and were never paid. Look for long payment delays too, and for open-ended rights to hold back payments "pending review."
What to ask for instead
Sample wording to propose: "On termination by either party, Company will pay all earned commissions, less valid reversals, within 30 days, regardless of any minimum threshold. Commissions may be forfeited only for a material breach of this Agreement that Company identifies in writing."
5. Termination at any time, without notice
A typical clause might read: "Company may suspend or terminate Affiliate's participation in the Program at any time, for any reason or no reason, with or without notice."
Why it works against you
Your links can stop earning overnight while they're still sending traffic to the merchant. With no notice period, you have no time to swap links or find another program, and the merchant may keep the benefit of customers you've already sent. This matters even more if termination also wipes out your unpaid balance. See termination for convenience clauses explained.
What to ask for instead
Sample wording to propose: "Either party may terminate this Agreement for convenience on 30 days' written notice. Company may terminate immediately only for a material breach that Affiliate fails to cure within 10 days of written notice. Referrals made before termination remain commissionable."
6. One-way indemnity and broad content restrictions
A typical clause might read: "Affiliate shall indemnify and hold harmless Company from any and all claims arising from Affiliate's website, content or promotional activities. Affiliate shall not promote any competing products during the term."
Why it works against you
You may be on the hook for claims about the merchant's own product descriptions, images or offers that you simply passed on. The merchant usually promises nothing in return. Exclusivity or "no competing products" language can also stop you from reviewing or comparing alternatives, which is often the core of affiliate content. Whether those restrictions can be enforced depends on where you are. See indemnification clauses explained and non-compete clauses explained.
What to ask for instead
Sample wording to propose: "Each party will indemnify the other for claims arising from its own breach or its own content. Affiliate is not responsible for claims based on materials, product information or offers supplied by Company. This Agreement does not restrict Affiliate from promoting other products."
Also worth a look
Look for clauses that send disputes to private arbitration (see mandatory arbitration clauses explained) or choose a far-away court, and for one-sided liability caps. Also check rules on paid search and brand-name bidding, disclosure duties, coupon-site bans, and any license the merchant takes over your content (see perpetual content license explained). If the deal includes sponsored posts as well as links, see influencer brand deal contract red flags.
Scan your own agreement free
Every affiliate program is different, and one line about tracking or forfeiture can change what you actually take home. Upload your affiliate agreement or program terms to the ScanMyTerms terms of service checker as a PDF, DOCX, TXT or MD file, or photograph it. In about a minute it flags clauses that work against you, with the risk level, the exact wording, why it hurts and how to change it. The free preview needs no sign-up and shows the risk count and the first two findings. The full report is $5. ScanMyTerms does not use your documents to train AI models, and reports are deleted after 7 days.
This page is general information, not legal advice. Contract and marketing rules vary by jurisdiction, so for decisions about a specific agreement, talk to a qualified lawyer where you live.
Sources
- All clause examples on this page are illustrative and written for this guide. They are not quoted from any real company's agreement.
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