What is a Sponsorship Agreement?
At its core, a sponsorship agreement is a legally binding contract between parties where one party generally agrees to support a project, activity, or individual that will further their mutual interests. Sponsorship agreements have become widely used in the media and entertainment industries, as well as in the non-profit field, among many others . Depending on the industry and the scenario in which the sponsorship takes place, the terms of such agreements can vary widely. Regardless of the circumstances, however, the basic framework and intention of the sponsorship agreement between the two parties involved remains in tact: to define the parameters and expectations of the relationship between the sponsor and the beneficiary.
Essential Components of a Sponsorship Agreement
To be valid, each sponsorship agreement must include a variety of elements. Sponsorship agreements, like most contracts, are meant to help ensure that no part of the deal between all involved parties is accidentally overlooked or ignored. To ensure the agreement is legally binding, each agreement should include:
Terms of the Sponsorship: Terms vary from one sponsorship agreement to another, but nearly every agreement will detail the specific terms that both parties agree to. This often includes how many events the sponsor will attend, how long the agreement lasts for, and what is required of each party.
Duration: The duration of a sponsorship agreement can range from a few weeks to a couple years. The reasoning behind including the term is to ensure that each party knows exactly how long they must be involved with the sponsorship. Most sponsorship agreements can be canceled by either party with written notice.
Obligations to Each Party: Obligations are perhaps the most important components of a sponsorship agreement, as they lay out what both parties need to adhere to in order for the sponsorship to be successful. For example, if the sponsor must host a grand opening event for the sponsored company, this should be clearly laid out in the obligations segment of the sponsorship agreement.
Cancellation Clause: Cancellation clauses are meant to protect both parties in the event that the sponsorship agreement is no longer desired by either party. Cancelling a sponsorship agreement can happen at any time, though written notice is typically required.
Benefits of the Sponsorship to the Sponsor: When creating a sponsorship agreement, each party often attempts to ensure that their side of the deal has benefits for their organization. For the sponsor, it may mean that they receive financial benefits from the sponsored group.
Advantages of a Free Sponsorship Agreement Template
The Benefits of Using a Free Template are endless. Even if you are not an attorney, there are a myriad of reasons a free sponsorship agreement template makes sense. First off, this template can save you a lot of time. Drafting any type of contract from scratch can take hours upon hours, depending on your comfort level with drafting, your experience and your ability to navigate the internet for similar agreements.
Second, with a free template, you will not have to worry whether you have provided the proper sections to make the agreement legal or whether the sections are in the proper order. Most templates are created by attorneys and are signed off on so you can be assured that the proper parts are in place. If you use one of our templates, you can be confident that the template you’re using reflects the law.
Third, it’s free. Hopefully there are not a ton of strings attached to free stuff, but these documents can really add up, particularly if you have to hire someone to draft the necessary legal document.
Finally, they are easy to use. You download the template and fill in the blanks. You do not have to be a master typist or get bogged down in the legalese that so many agreements contain.
There are many reasons to use a free sponsorship template and to use it to form this important legal agreement.
Where to Locate Trusted Free Sponsorship Agreement Templates
The Internet is a veritable treasure trove for free sponsorship agreement templates, but not all resources are created equally. When selecting a site to download templates from, prefer sources that have been well-reviewed and are widely used. Finally, if your sponsorship agreement is going to be particularly complex, you may want to consider purchasing a template. Even if you get a good deal, however , you will save more money by making the contract on your own or at least using a template to get started than by hiring a lawyer to write one for you from scratch.
Here are some of the best places on the web to find user-friendly and comprehensive agreements:
Biztree.com
MyCorporateForms.com
RocketLawyer.com
LawDepot.com
eForms.com
In researching templates, check reviews for not only how well-structured the agreements are but also how comprehensively they inform the user and how accessible they are.
How to Adapt Your Template to Fit Certain Circumstances
The versatility of free sponsorship agreement templates makes them an appealing option for a variety of industries. From sporting events to symphonies, golf tournaments to art exhibits, there’s a template for just about every sector and scenario. What most of them require, though, is simplification and adaptation to create an agreement that accurately reflects your industry’s standards and risks. When you use a free sponsorship agreement template, it’s not a perfect fit for you and your partnership right from the get-go. Before you send it off for review to your attorney, plan on making adjustments to specific sections, depending on the partnership or industry in question.
Consider the Industry Sporting events, museums, and art galleries all have a unique set of terms for patrons or donors. Their lingo and structure informs the sponsorship agreement they use, regardless of the industry standard. For an art gallery, for example, they need to make certain it’s clear whether or not they can choose which pieces will be displayed and for how long. For a golf tournament, the terms might discuss the placement of sponsor’s promotional materials or the selling of seats to guests.
Consider the Partnership Sponsorship agreements are typically built around the sponsor and the sponsee together. If you have multiple sponsors in mind, such as a major city and its convention and visitor’s bureau, you might need to make edits to the template to ensure that all of the terms, stipulations, and details are covered.
Consider the Party Both sponsors and sponors want the most from a sponsorship agreement. As the sponser, you should maturely approach the subject of what you expect from them in terms of time and contributions to their cause. One party might ask for a higher sponsorship fee or more community engagement, while another seeks specific sponsorship activities and turnout. It’s your job to carefully list these items in the sponsorship agreement so that it’s clear what to expect when the agreement is implemented.
Legal Risks and Mistakes to Watch Out For
It goes without saying that no one wants to find themselves in a legal dispute with their sponsor or your sponsored event, but this can take place if you are not careful about the wording in the agreement. Although the templates may be free to download and use, failure to understand the legal responsibilities and risks involved could cost you far more in the long run.
As a starting point, there is the risk of being too vague on certain details. It’s important that the relevant areas such as purpose, duration, and compensation are correctly detailed in the agreement, as any confusion may lead to conflict down the line.
The biggest problem is the lack of exclusivity. Some sponsorship agreements have an exclusivity clause which can help both parties navigate possible future disputes. For the sponsor, it delineates what is covered. Alternatively, for the event, it gives assurances of non-competition. Therefore, you should ensure the wording meets your expectations for what you want from the deal.
Inadequate contract termination terms are another common problem. A sponsor may feel that they had no choice because the event was not profitable. Conversely, a sponsor may receive a better offer or decide to withdraw financial support during a tough economic climate . An adequate agreement can give your business the break clauses needed should there be a change in the economic situation of either party.
This is particularly important when your company serves retail merchandise in additional to sponsoring the event. The problem is most pronounced when sponsorship products are sold via retailers outside your control. Breaking clauses allow parties to end a relationship amicably and avoid a protracted legal battle that would be costly and in poor taste even if won.
The last of the commonly overlooked aspects involves liability. You don’t just want the agreement to cover any legal disputes that arise, but what happens when something goes wrong? E.g., event sponsors might be restricted from holding a concert when it enters into an exclusivity deal with another company that is unrelated to music, as it keeps rival companies from sponsoring the same event in the same space.
Common problems relate to forcing a choice between contradictory clauses, how conflicts are to be resolved (e.g., mediation, arbitration, litigation), and who (i.e., the individual or the organization) will be responsible for the liability.
You want an agreement that encourages investment by minimizing risk, and this is achieved by having the relevant clauses that allow neither party to avoid their obligations.