Introduction, Objectives & Drafting.
An advertising is a written agreement between a person who wants to place an ad
and a company that offers its advertising space. It can be an agreement between
two bloggers, an organization and a billboard company, etc.
Making an offer is the first step of forming a contract. While offers can come
in many forms, an advertisement is usually not considered an offer to enter into
a contract. Announcements, brochures, and catalogs also do not reach the level
of an offer.
In most scenarios, an advertisement is not considered an offer. They are
considered an invitation to begin negotiations. The reason for this is because
if a contract was formed, no one could ever advertise without fear of being
sued. Imagine placing an advertisement for delectable tomatoes.
In simpler terms, the parties involved are:
While drafting the Advertising Agreement, following important points must be
taken care of:
- The Advertiser who would be engaged in the manufacture, sale, marketing and
distribution of goods and services in different categories such as xxx.
- The Ad Agency who would be engaged in the business of providing advisory
services, brand communication and solutions, buying and planning of media spots
for advertising and other ancillary activities.
- The Broadcaster who would be engaged in the business of broadcasting, phishing
operations through its network of TV/ media channels.
Basic Advertising Agreement
- Under the scope of work - Why agencies always need a contract.
- Names and addresses of agency and client.
- Outline the contract's duration.
- Payment schedule.
- Conditions to avoid scope slink.
- When the contract is terminated.
- Outline what happens with a breach of contract.
- Include a confidentiality and indemnity clause.
An advertising agency agreement is used by an advertiser when retaining the
services of an advertising agency. It includes provisions on the scope of
advertising and marketing services and ownership of creative work product and
intellectual property. Although drafted in favor of the advertiser, this
agreement contains integrated drafting notes and negotiating tips that also
address the interests of the advertising agency and the broadcaster.
Advertising Agency Agreement is a legal document that defines the relationship
between an advertiser, its advertising agency and broadcaster. An advertising
agency is a person or company that places advertisements in order to target
An Advertising Agreement is a document that is signed and executed
between an Individual/ Corporation/Company who wants to promote their products
on the one side and the Advertiser, the Company/Corporation/Individual who would
advertise their product and help them in reaching the masses on the other side.
WHEREAS the company is manufacturer of various plastic and fiber products like
Office Stationeries, Furniture, kitchen utensils, electronic gadget cabinets
etc. hereinafter referred to as "the said products" and desirous to engage the
services of an advertising agency for the purpose of advertisement of their
products in India and abroad.
NOW IT IS HEREBY AGREED BETWEEN THE PARTIES AS FOLLOWS:
- The company appoints the Agency to advertise the said products in the
newspapers, magazines, journals, cinema slides, video magazines, radio,
television or public hoardings as may be determined by the parties.
- The Agency shall submit the estimate of cost and method and period of
the advertisement to the company and after the said estimate and methods of
advertisements is approved by the company in writing, the advertisements
will be released to the concerned newspapers, magazines, television centre,
- The Agency shall be responsible for preparing all the material for
advertising, publicity including art work, photography, cinematography,
documentary films, drawing, engraving, advertising writing, preparation of
video films for T.V. advertisements and video magazines and if the said works are got
done by the Agency at its own office with the help of its employees, the company
shall pay for the same at the market rates and settled between the parties. If
the said works are got done through outside agencies, the company shall pay all
expenses incurred by the Agency for getting the work done through outside
- The company shall pay to the Agency . .................per cent
above the cost and other expenses incurred by the Agency in this behalf as
- The Agency will be responsible for advertising the said products in
India and other countries of the world, wherever the said products are
exported or the company proposes to export its products.
- Whenever the company manufactures any new product and launches the same
in the market for sale, the Agency shall undertake special advertisement
campaign for the said new product in consultation with the company.
- The Agency will not act as Advertisement Agent of any company/person,
who is manufacturing similar products and who are competitors of the
- The Agency shall observe the laws applicable and the rules or code of
conduct of advertisers associations, association of newspapers or rules
prescribed by television and radio.
- The Agency shall submit a weekly report to the company showing in detail
the advertisements given regarding each of the said products separately and
showing the dates, the timing or appearance of the advertisements, the names
of newspapers/channel of TV given during the previous week. The report shall
also accompany the cutting of newspapers/journals/magazines/clippings of T.V.
Programme published/broadcast of the products.
- The Agency will not infringe any copyright of any person/company while
displaying or publishing any advertisement of the company.
- The Agency shall indemnify and keep indemnified the company against any
loss, claims, demands, actions, proceedings, damages, costs, charges and
expenses which may be made or brought or commenced against the company for
any act contrary to the provisions of this Agreement or due to or resulting
from the breach of any agreement between the Agency and any newspaper/T.V. or any other
person relating to the advertisement of the products of the company.
- The company shall indemnify and keep indemnified the Agency against any
loss, claims, demands, actions, proceedings, losses, damages, costs, charges
and expenses which may be made or brought or commenced against the Agency
for the publication of any advertisement of the company, which has been
prepared on the basis of the material furnished by the company.
- The company's budget for advertisement is Rs . .................crores per
year, and the company agrees and undertakes that it shall get the advertising of
its products done through the Agency.
- This agreement shall be for a period of one year from the date of these
presents. However, any party may terminate this agreement before the period
of one year by giving two months notice in advance to the other party. In
case the Agency commits a breach of any covenant herein contained, the
company is entitled to terminate the agreement by giving one week's notice.
- On the termination of the agreement, all the advertisement material in
the possession of the Agency will be returned to the company forthwith and
will not be used by the Agency for any other purpose or persons.
- The Agency shall submit bill to the company every month for the expenses
incurred by it in advertising and the company shall pay the bill within a
period of 10 days of the submission of the bill there for. The commission
payable to the Agency shall be payable on the gross value of the work done
or undertaken on behalf of the company and shall be paid along with the
payment of bill of cost and expenses submitted by the Agency.
- The Agency shall also charge service tax on their bills at the rates
applicable from time to time.
- The Agency shall advise the company of the most up to date, decent and
profitable mode of advertisements at moderate.
- The company shall Endeavour to keep the agency with sufficient funds to
pay the expected charges for advertisement.
- All disputes between the parties hereto arising out of this Agreement or
in relation thereto or regarding the interpretation of this Agreement, shall
be referred to an arbitrator appointed by the Indian Council of Arbitration,
New Delhi and the provisions of the Indian Arbitration and Conciliation Act,
1996 or any statutory modification thereof shall be applicable to such
IN WITNESS WHEREOF the parties hereto have signed this Agreement on the day and
year first above written.
1 The Company
For ..................... Ltd.
2. The Agency
Booking and scheduling
Under this clause, the adviser agrees to authorize Broadcaster in connection
with the advertisement of the products and/or services of Advertiser for a term
("Term") as hereinafter provided. Your scope of work is the one place that can
land you in all sorts of trouble if you're not careful.
Consideration and payment terms.
Nobody likes hammering a payer for a late payment or an overdue invoice. It's
frustrating and can affect the parties' relationship.
The best way to avoid this is to have a clear payment schedule outlined from the
moment advertiser starts working with the agency and broadcaster. This part of
your contract must outline the total amount you will be paid, how they will make
payment, and if the payment is refundable:
Changes in agency.
Set out a clear process if the Advertiser requests a scope of work amendment or
to change the agency. Any amendments shall be clearly communicated to other
party of this contract and must specify the effects of changes on the rights and
entitlements of each party to the contract.
Warranties, obligations and undertakings.
The Parties warrant and undertake that throughout the Term each of them has and
will continue to have full authority to enter into this Agreement and to
undertake each and all of the particular obligations on their respective parts
Intellectual property and trademarks.
For the term of this Agreement, the ADVERTISER grants to the BROADCASTER a
royalty-free, non-transferable license (with no right to sub-license) to those
of its patents and design rights (and the patents and design rights of its
Affiliates) with claims that cover the Products or any of them, solely for the
limited purpose of permitting the BROADCASTER to market and advertise the
products or services.
Subject to the following provisions, this Agreement shall commence on the
Commencement Date and shall continue thereafter unless terminated by either
party giving the other at any time not less than one month's prior written
notice to expire on or at any time after the end of a one (1) year period
following the Commencement Date.
if the other party commits a breach of any term or conditions of this Agreement.
VII. Consequence of termination.
If for any reason this Agreement shall be terminated or expire.The termination
or expiry of this Agreement shall not of itself give rise to any liability on
the part of the ADVERTISER to pay any compensation to the BROADCASTER for loss
of profits or goodwill.
The BROADCASTER shall indemnify the ADVERTISER against all losses or damages
(whether direct or indirect, consequential or otherwise, including loss of
profit), together with all costs, expenses and liabilities (including without
limitation, legal and other professional costs) incurred, suffered or awarded
against the ADVERTISER as a consequence of any breach by the Distributor of the
Distributor's obligations under this agreement or that arise as a result of the
action of the Distributor, including, but not limited to BROADCASTER's
management and distribution of the Products.
The ad agency and advertiser should agree to a non-compete clause in the
contract to protect both parties from revealing trademarked or proprietary
information to competitors.
Advertisement is one of the most important factors in the success of a product
and involves a lot of money to advertise a product. Therefore, to safeguard the
interest of all the stakeholders, the company must always try to enter into a
written agreement with the advertiser wherein all the rights and responsibility,
terms and conditions of the advertising agreement would be set out.
so, the parties must keep in mind the terms used in the agreement because, at
the time of conflict/dispute/disagreement between the parties, the adjudicating
agency or court of law would refer to the written agreement.