Online Alliances – Protecting Yourself

They say we live in a rat race these days given the number of things that have to be done every day and the speed they need to be accomplished in. Well, if the brick and mortar world is the rat race, the online world is the rat race on a 24 hour energy drink! We join into contractual relationships with other sites at the drop of the hat. This is fine, but it is vital to protect yourself when doing so.

Teaming up with other sites on projects is common place on the web. In fact, it is so common that it has become an industry unto itself and is better known as affiliate marketing. Large affiliate sites like Commission Junction and the like set their terms for affiliates in a take it or leave it manner. But what if you decide to pursue a custom proposal with another party? You need to protect yourself.

Let’s assume I own a site on which I sell my leather writing journals. I am approached one day by a large travel site. They want to sell my product on their site. In fact, they will list it on the general template that shows up on every page and build a custom page just for it. I’m popping the champagne in an expectation of big profits!

Well, they are true to their word. My journals are being advertised all over their site and the page they’ve built is great. Then something funny happens. They start using my journals in traditional media. This is a problem because I have another deal with a third party that grants them the exclusive right to such advertising. I tell the travel site to stop and they refuse because they’ve already spent $50,000 on advertising. Now I have a huge problem because I am violating one contract or the other.

Forming strategic alliances on the web is not only a smart move, but a necessary one if you want to pull in big revenues. Just make sure you are protected by entering into a written agreement that defines exactly how the alliance will work.

By: SD Lawyer

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Richard A. Chapo is with SanDiegoBusinessLawFirm.com and provides strategic alliance agreement creation and review services to California businesses.