Marketing agency contract checklist for small business

Marketing agency contract checklist: five checks help you spot costly terms before you sign. Read these five areas first: scope, reporting, ad account ownership, minimum term and exit. Then check the contract against the small business unfair terms law.

1. Scope: what you are buying

List the work in plain words. Say how many posts, ads, emails or reports you get each month. Say who does the work and who approves it.

Ask what is not included. Ad spend, photos, software and extra rounds of edits are often billed on top. If a price can go up, the contract should say when and by how much.

Check that every promise from the sales call is in writing. If it is not in the contract, you may not be able to enforce it.

2. Reporting: how you will see results

Pick the numbers that matter to your business, such as calls, leads or sales. Do not settle for clicks alone. Write down how often you get a report and in what format.

Ask for live access to the data, not just a monthly PDF. A report you cannot check is a report you must take on trust.

Set a review date. Three months in, compare the results with the goals in the contract.

3. Ownership of ad accounts and data

This is the term many owners miss. Your ad accounts, website, analytics and customer lists should belong to you, not the agency. Open the accounts in your own name and add the agency as a user.

Make sure you hold admin access. Google's help pages say that if a Google Ads account has only one administrator, you may lose access if that person becomes unavailable, and suggest adding at least one more administrator.

Also ask who owns the work the agency makes, such as logos, ad copy, photos and videos. The contract should say you own it, or can keep using it after the contract ends. Check that you will get logins, files and data when the agency leaves.

Sources: Google Ads Help, About access levels in your Google Ads account (support.google.com/google-ads/answer/9978556).

4. Minimum term, renewal and exit

Find the length of the contract. A 12 month lock can be a lot for a business that has not worked with the agency before. Ask for a shorter trial period if you can.

Look hard at automatic renewal. Some contracts roll over for another full term unless you cancel inside a narrow window. Put the cancel date in your calendar the day you sign.

Check the exit fees. Ask how much notice you must give and what you owe if you leave early. Ask whether the agency can end the contract on short notice while you cannot.

5. Unfair terms: what the law covers

Under Australian Consumer Law, a small business is protected from unfair terms in standard form contracts. A standard form contract is a pre-written contract where you can mostly accept it or reject it, with little room to change it. The ACCC says a contract is presumed to be standard form unless the business that wrote it proves it is not.

From 9 November 2023, the law covers a business with fewer than 100 employees or with annual turnover under $10 million. The contract's value does not matter. It covers standard form contracts that start or renew from that date, and any terms added or changed from then on.

A term can be unfair when it tips the balance of rights and duties heavily toward the agency, is not reasonably necessary to protect the agency's legitimate interests, and would cause you harm if used. A court looks at the whole contract.

The ACCC points to terms that let only one side change the contract, renew it, limit its own duties, end it, or charge a penalty for leaving. In a 2022 Federal Court case, 38 terms in contracts with small businesses were declared unfair and void. They covered automatic renewal, excessive exit fees and unilateral price changes.

Since that date, businesses that use unfair terms face penalties. The top penalty for a company is the greatest of $50 million, three times the benefit gained, or 30 percent of adjusted turnover during the breach.

If a term worries you, ask the agency to change it. If it will not, you can contact the ACCC or your state small business commissioner. This checklist is general information only. Before you sign a big agency deal, have a lawyer who knows commercial contracts read it.

Sources: ACCC, Contracts (accc.gov.au/business/selling-products-and-services/contracts); ACCC, 38 contract terms in 11 Fuji small business contracts declared unfair and void (12 August 2022); ACCC, ACCC welcomes new penalties and expansion of the unfair contract terms laws (1 November 2022); ACCC, Small business unfair contract terms in focus (13 November 2017).

A quick pre-signing list

• Scope, deliverables and extra costs are written down.
• You get reports on your own goals, with data access.
• You own the ad accounts, logins and finished work.
• The term, renewal and exit fees are clear and fair to both sides.
• No term lets only the agency change the price or the deal.