A sponsorship agreement or contract governs the legal relationship between a sponsor and the person entitled to enforce the sponsorship obligation. That person may, for example, be an individual who is being sponsored, a company that organises and event that is being sponsored, or the owner of a location that is being sponsored.
SEQ Legal supplies two different template sponsorship agreements, available here:
Many sponsorship arrangements are concluded upon an informal basis. Whilst this may be appropriate in some circumstances, in others a formal agreement may protect both the interests of the sponsor and the other party. For instance, it will be easier for a person being sponsored to be sure of the scope of the sponsor’s payment obligations if there is a written agreement. Just as important, the payment obligation should be easier to enforce where there is a written agreement.
From the sponsor’s perspective, it will be important to be able to exit the sponsorship contract where the actions of the other person could lead to damage to the reputation of the sponsor. If the sponsor is granting a licence to the other party to use the sponsor’s trade marks, then a formal written agreement will almost always be appropriate to protect those marks.
Typical issues to consider when drafting a sponsorship agreement are:
- the definition of the benefits accruing to the sponsor;
- variations in those benefits (particularly where there is a long-term arrangement);
- the payments due under the agreement;
- variations in those payments (again, this is particularly relevant where the arrangement is long-term);
- the circumstances in which the trade marks of the sponsor may be used; and
- the rights of the parties to terminate the agreement.