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Advertising contracts: Part 2

Reading time: 2 minutes

On this occasion, we want to talk about advertising contracts, the obligations they set for the parties and the types that exist. The definition of advertising contract appears in Article 13 of the General Law on Advertising and reads as follows

An advertising contract is one in which an advertiser commissions an advertising agency, for a fee, to execute advertising and to create, prepare or schedule it.

The content of this contract is constituted by the rights and obligations that it originates for each of the intervening parties, being the duty of the agency in front of the advertiser the advertising communication, and the advertiser's duty to pay and provide the agency with certain data necessary to carry out the advertising work.

Types of contract:

  1. Dissemination contract: as established in Article 17 of the General Law on Advertising, this type of contract establishes the function of taking the message to the public. Among the rules that regulate it, the obligations of both parties are decreed:
    • Obligations of the medium: to disseminate the advertising message among the audience in the form and time previously agreed upon. The basic aspects of this obligation are the reproduction of the advertisement, the placement in the medium, the time of publication and dissemination.
    • Obligations of the advertiser or agency: to pay and provide the media with the necessary material for the dissemination of the message.
  2. Advertising creation contract: defined in Article 20 of the General Advertising Law, it is the one that obliges, in favour of the advertiser or agency, to devise and elaborate an advertising campaign, a part or another advertising element. It is therefore referred to as a complete work or element of a campaign, and its purpose is the execution of an advertising creation or the use of an existing one.
  3. Advertising sponsorship contract: it is explained in article 22 of the General Advertising Law. It stipulates that the sponsored party, in exchange for economic support for the performance of its activity, undertakes to collaborate in the sponsor's advertising. The activities where the sponsorship can be carried out are: sport, charity events, culture, science or other. It also determines the obligations of both parties, in this case we determine those of a sports sponsorship:
    • Obligations of the sponsored party: to manage exclusivity, to define the type of collaboration (active or passive), to keep the material in good condition, without being able to alter it or transfer it to third parties, and to maintain good conduct.
    • Obligations of the sponsor: to fix the scope of territorial exclusivity and to determine whether it is carried out in all or part of the competitions. In addition, it must provide the sponsored party with compensation, either financial or material.

It is essential, in any advertising relationship, as in any other commercial relationship, to leave everything well defined in a previous contract, to avoid possible later inconveniences.