At the time of making a sponsorship sale, you should always get into an agreement with defined responsibilities and roles. Make sure that parties in the agreement mutually agree on the terms and conditions before signing it.

This sponsorship agreement works as a marketing tool as it enables products and brands to expand their network and strengthen their relationships with the audience.

While events enable brands to raise brand awareness, sponsorships allow them to provide their credibility and accountability. So, do you know how this agreement works and what does it do exactly? If no, then this piece of content is going to explain everything in detail.

What Is a Sponsorship Agreement?

A sponsorship agreement is designed to govern legal association between one or more sponsors and the parties entitled for the enforcement of its obligations. It comprises many terms and conditions where the sponsor agrees to pay a fee against the services.

Sponsorship opportunities allow businesses to be involved in a variety of activities at different levels of participation so that there will be product loyalty, brand awareness and strong connection with the target market.

Normally, sponsorship agreements involve the following two parties:

  • Sponsor: who will be funding/providing services or products.
  • Right Holders: who are entitled to provide sponsorship benefits.

In order to ascertain that the agreement is made as per the requirements of both parties, all details with agreed clauses and conditions will be mentioned in it.

What Are the Benefits of Having a Sponsorship Agreement?

Below are some of the worthy benefits of using sponsorship agreements for your deal:

  • The first and foremost thing is the legal validity of the proposals and arrangements that keeps both parties satisfied about what and how the other party carries out the respective obligations.
  • A legal agreement between the parties when they have to organize events frequently. The only thing is that both have to understand their responsibilities and be comfortable with the terms set by the other party.
  • It is clear about the level of participation of the sponsor. Some might deliver products/services to the event, while some only intend to give their brand name so that the event can become profitable.
  • The agreement is responsible to take care of the interest and needs of both parties.
  • It will help to reduce confusion and lead to a reliable personal and contractual relationship between both parties.
  • The agreement is the key to promoting brand names and their trademarks.
  • Both parties know their duties as well as liabilities in the agreement.

What Are the Features in Sponsorship Agreement?

After the benefits, here are some of the worth considering features that are sure to facilitate you in the way you want:

Time Duration

There are two conditions regarding the length of the sponsorship agreement. Either party can decide to extend the time period, including the prescribed notice period.

Exclusivity Clauses

Since business involves a lot of competition and rivalry, it’s necessary to add exclusivity clauses in the agreement so that both parties can focus on their tasks properly. The best part of this feature is that it restricts the other party to bring in more sponsors.

Timing and Method of Payments

The sponsorship agreement is clear about the payment layout being processed between the parties. It explains whether the right holders want a lump sum amount in the beginning or in installments.

With this feature, both parties can save their time as well as money to get this matter resolved by legal proceedings. Also, payments can be made according to the events happening in the events.

Benefits and Obligations

Needless to say, the agreement should dictate the obligations and responsibilities for both parties. This way, they will be able to enjoy agreement’s benefits to the fullest.

The relevant benefits as well as expectations should be mentioned, even the expected return for financial support so that parties can take steps accordingly. Some common obligations are:

  • Must act professionally not matter what.
  • Don’t talk negatively or bad about the sponsor.
  • Appreciate the sponsor every time you discuss them.

Intellectual Property Clauses

There are intellectual property clauses in the simple sponsorship agreement template for the assistance of both parties. Also, there must be relevant terms about when to use the intellectual property and how.


A good sponsorship agreement usually has the directions to make arrangements when something goes wrong. These arrangements include: repayment of money or end of the agreement.

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Wrapping Up

Sponsorship agreements are the door to enter a new world of revenue and benefits, which you can enjoy by partnering with other businesses.

If you are looking for one for your business, CocoSign can help you to draft a free copy that will have each and everything as per your requirements.


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