Agency contract terms a CMO should read twice
Fourteen terms in a marketing agency contract that decide what you pay, what you own and how hard it is to leave. For each one: what to look for in the draft and the question to ask before you sign. It is a reading list for the CMO, to be used alongside your own legal review, not in place of it.
How to use it
Read the draft with this list open and mark each term as fine, unclear or missing. Send the unclear and missing ones back as questions in one round.
Pay most attention to media billing, ownership of accounts and work, and the exit terms. Those are the hardest to fix after signing.
The checklist
- 1. Scope and deliverables
- Look for: a list of deliverables or outcomes, not a description of services. Ask: what happens when we ask for something outside this list, and how is it priced?
- 2. Fees and rate card
- Look for: the fee model (retainer, project, hourly), the rate card by role, and when rates can rise. Ask: which roles and hours does the retainer buy each month, and what happens to unused hours?
- 3. Media billing, rebates and markups
- Look for: who pays media owners, whether the agency earns commissions, rebates or markups on media or third-party costs, and how they are disclosed. Ask: will you pass every rebate and discount to us, and show it on the invoice?
- 4. Audit rights
- Look for: your right to audit billing and media records, how often and on what notice. Ask: can our auditor see the media invoices you receive?
- 5. Ownership of the work
- Look for: who owns the work product once paid for, what the agency keeps (its tools and methods), and licenses for stock images, fonts, music and talent. Ask: when a license expires, who tells us and who pays to renew?
- 6. Accounts, data and access
- Look for: ad accounts, analytics and other platform accounts held in your company's name, with the agency as a user. Ask: if we part ways tomorrow, do we keep every account and its history?
- 7. Key people
- Look for: named key people, your right to approve replacements and the notice the agency must give. Ask: what happens if the people we met in the pitch leave the account?
- 8. Performance reviews
- Look for: a review schedule and the measures each review uses. Ask: what happens when a review finds the work below the agreed level?
- 9. Term and termination
- Look for: the initial term, renewal, termination for convenience and the notice period. Ask: what do we owe if we end the contract early, and for how long?
- 10. Transition on exit
- Look for: the agency's duty to hand over files, accounts, data and work in progress, and to cooperate with the next agency. Ask: what does the handover include, and is it charged?
- 11. Confidentiality and conflicts
- Look for: what the agency may not do for your competitors, for how long, and how it handles your data. Ask: who else in our category do you work for today?
- 12. Subcontractors and AI tools
- Look for: disclosure and approval of subcontractors and the AI or other third-party tools that will process your material. Ask: which tools will touch our data, and where is it stored?
- 13. Liability, indemnity and insurance
- Look for: caps on liability, who indemnifies whom for infringement or data breaches, and the insurance the agency carries. Ask: does the cap cover a claim that our ads infringed someone's rights?
- 14. Non-solicitation
- Look for: limits on hiring each other's staff, their length and any fee. Ask: does the clause stop us hiring someone who applies to us on their own?
Written by the CMO Tribune Desk. A template holds no figures of ours: every bracket is for your own number. See how we work, or report an error on the corrections page.