What does an advertising contract need and contain?

Before delving into the details of an advertising contract, we first need to understand the concept of commercial advertising. Commercial advertising refers to the activity of promoting goods or services by a business or the business itself. This is the foundation for creating the terms in an advertising contract.

An advertising contract, also known as an advertising service contract, is a document that records the agreements between the parties involved. The party hiring the advertising service must fulfill their rights and obligations towards the advertising service provider, and vice versa. Specifically, the client must make payments on time as specified in the contract, while the advertising service provider must meet the reasonable requirements set out in the agreement.

The First Page in a Sample Advertising Contract for Businesses

An advertising contract also includes penalties for violations of terms by either party. During the course of the work, there may be cases where one party deliberately deceives or violates terms for personal gain. In such cases, penalties serve as a deterrent, ensuring fairness and protecting the interests of the other party.

The advertising contract must be based on the law and in compliance with the regulations of each country. The contract is only valid if its content does not violate the law and if both parties agree to its terms.

An advertising contract plays a crucial role for both parties involved in the agreement. It ensures the legal rights and obligations of both sides are upheld.

An advertising contract helps the client ensure the quality of the advertisement. Hiring an advertising agency comes with certain disadvantages. One of these is that the agency might not put in their full effort into the campaign if the contract is not clear. This can lead to disputes between the parties.
However, with a clear contract, the hired agency must adhere to the terms and execute the client’s requirements as agreed. The contract will clearly outline the work and obligations of the agency. Therefore, the agency will not be able to violate or circumvent the terms of the contract. This ensures the client gets the product they want and the advertising quality is of the highest standard.

For the agency, the advertising contract protects their legal rights and obligations, especially regarding compensation. In some cases, the client may try to cut costs or reduce the payment to the advertising agency. In such situations, the advertising contract serves as the basis to claim the rightful payment and other benefits for the agency.
Furthermore, the agency can ensure the work requirements are reasonable. Businesses often tend to increase the scope of work and demands from the agency. If the work exceeds the agreed-upon terms or negatively affects the overall progress of the project, the agency has the right to refuse further work without violating the contract.

When drafting an advertising contract, the writer must refer to the relevant legal provisions. The primary laws in Vietnam that should be consulted when creating an advertising contract are the Civil Code of 2015, the Commercial Law of 2005, and the Advertising Law of 2012.

Indeed, drafting an advertising contract requires compliance with legal regulations to ensure its legitimacy and protect the interests of both parties. To create a valid and enforceable contract, the writer must carefully study the relevant laws. Specifically, in addition to laws such as the Civil Code 2015, the Commercial Law 2005, and the Advertising Law 2012, there are also regulations from state authorities regarding advertising, consumer protection, and intellectual property rights.

The basic terms of an advertising contract are essential and must be included in every contract. These terms are built on the laws of the country, ensuring the contract is valid and enforceable. In addition to the mandatory terms, the contract may include specific clauses agreed upon by both parties. Below are the essential terms that should always be present in an advertising contract:

According to Article 108 of the Commercial Law 2005, “A trader has the right to register intellectual property protection for their commercial advertising products in accordance with the law.”

This is an important right that helps businesses protect the copyright of their products.

Intellectual property protection helps safeguard the research achievements and intellectual property ownership of advertising products. In order to run an advertisement, the service provider must obtain permission from the client to study the product. The intellectual property protection clause will prevent the advertising agency from stealing ideas and unlawfully commercializing the product.

This clause clearly lists the costs that the client needs to pay. This ensures the rights regarding the advertising agency’s remuneration and minimizes the occurrence of unforeseen costs during the project. Basic costs include advertising service fees and production costs for advertising materials.
The contract should also specify the payment terms (whether one-time or in installments), payment methods (bank transfer or cash), as well as any penalties and taxes that need to be paid.

The client has the following rights:

• To choose the method of distribution, the distributor, content, and advertising medium. In addition, the client can define the scope and duration of the advertising campaign.
• To monitor and check the progress of the work and the quality of the advertising products from the service provider.

Moreover, the client has the following obligations:

• To provide the necessary and accurate information for the advertising agency to create the advertising content and materials. If this information is inaccurate, the client will be considered in breach of the contract.
• To pay a fair and timely fee as stipulated in the contract. Additionally, any reasonable additional costs incurred during the execution of the work should also be paid.
• To fulfill any other agreements outlined in the advertising contract.

Advertising contracts need to ensure reasonable rights and obligations between both parties

The advertising agency has the following rights:

• To request the client to provide accurate and truthful information about the products, services, or individuals to be advertised. This information must be reasonable and comply with the terms of the contract.
• To receive advertising service fees and any reasonable costs that have been clearly declared.

The advertising service provider is obligated to fulfill the following three duties:

• To comply with the client’s requests and expectations. The advertising products must meet the required form, content, medium, scope, and duration of the campaign.
• To declare the costs of goods, materials, and any other expenses related to the advertising process accurately and truthfully.
• To fulfill any other agreements specified in the advertising contract.

These are referred to as the discretionary clauses in the advertising contract. When negotiating an advertising contract, both parties have the right to add certain provisions to make the content clearer. This helps to resolve unforeseen issues that may arise during the execution of the campaign. The following are three common clauses added to advertising contracts:

• Clauses regarding the confidentiality of personal, organizational, business, or product information, etc.
• Clauses about the transfer or assignment of the contract to a third party.
• Clauses regarding the communication methods between the parties.

Optional terms must be agreed upon by both parties for the advertising contract to be valid

The following is a list of products that are prohibited from being advertised in any form:

• Goods or services that are banned by law at the time the advertising request is made. If requested to advertise such products, the advertising agency is obligated to notify the relevant authorities for timely resolution.
• Tobacco and certain prohibited stimulants.
• Alcoholic beverages with an alcohol content of 15% or more.
• Infant formula or breast milk substitutes for children under 24 months of age; nutritional supplements for children under 6 months; feeding bottles and pacifiers.
• Pharmaceutical products that are restricted by the Ministry of Health.
• Products with erotic or violent content.

The list of prohibited goods cannot receive advertising on mass media.

The advertising client has the freedom to choose the distribution media and the advertiser in accordance with the regulations of the state authorities. Below are the requirements for distributing commercial advertisements:

• Comply with legal regulations regarding the press, publishing, information, and cultural and artistic activities.
• Comply with regulations at the advertising location, ensuring that it does not affect the landscape, environment, traffic, or social order.
• Comply with the designated time, period, and scope for each type of advertisement distribution.

Through this article, we have provided you with basic information about advertising contracts. This type of contract involves several important considerations to ensure the rights and interests of each party involved in the agreement.