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A marketing partnership agreement is a contract where the parties agree to collaborate and market each other’s products or services. This can take the form of marketing activities and campaigns, sharing resources, and promoting each other to their respective clients.

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Usually, this is done between companies that do not directly compete with each other, but share the same potential customer base. For instance, a toothbrush manufacturer might reach out to a toothpaste company in order to grow their own client base. Alternatively, a reverse mortgage company might find a like-minded business partner in the form of a company that specialises in elderly care.

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When writing a marketing partnership agreement, it should clearly outline each party’s roles, obligations, duties and responsibilities, as well as their profit/loss sharing, intellectual property rights, confidentiality, dispute resolution methods, and duration or termination terms.

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1st Key Document for Compliance: the PDPO

For companies operating in Hong Kong, complying with the Personal Data (Privacy) Ordinance is a must. The PDPO sets out requirements for usage of clients’ personal data in direct marketing.

What is direct marketing?

In a business context, ‘direct marketing’ refers to advertising or donation-seeking activities, which are sent directly to specific persons (e.g.: via phone call or email). This type of marketing is fairly common in daily life, and you may be interested in adopting this for your business as well.

Breach of specific PDPO provisions on direct marketing can lead to fines of HK$1 million, and imprisonment for five years, depending on the type and duration of the breach.

But fear not! This article will teach you about how your business can be brought to comply with the PDPO, and as such, what elements can and cannot be included in your marketing partnership agreement.

What steps are required for direct marketing in Hong Kong?

For the sake of transparency, your marketing partnership agreement should include clear provisions for what type of personal information will be shared, and how it will be handled.

In Hong Kong, it is illegal to use consumers’ personal data for marketing, and doing so is punishable with a fine of HK$500,000 and imprisonment of 3 years. That is, unless the following steps are followed:

You must issue a privacy notice, informing the data subject (i.e.: the client) that you intend to use their personal data for marketing, and that you cannot do so unless you’ve received their consent. This should be expressed in a clear, unequivocal and easily understandable manner.

You must provide an overview of how the data will be used, and what kinds of data is collected for this purpose. You must also explain what the class of marketing subjects is.

You must give the client a pathway to communicate their consent, free of charge.

When using the client’s personal data for the first time, you must inform them once again that you are obliged to stop using their data if they request so. At any time, the client may request you to stop using their personal data.

What does this mean for my marketing partnership contract?

Firstly, if you decide to use direct marketing to your customer base, you will need to include the following elements:

Data collection and use: Specify that personal data will only be collected, used, and retained for purposes directly related to the provision of services under the Agreement.

Consent: Clearly outline the duties of the two companies. Require that one or both parties shall obtain all necessary consents from individuals whose personal data will be shared in this fashion.

Data Security: Obligate both parties to implement appropriate technical and organizational measures to protect personal data against unauthorized or accidental access, processing, erasure, loss, or use.

Data Access and Correction: Provide individuals with the right to access and correct their personal data held by either party, in accordance with applicable law.

Data Retention: Limit the retention of personal data to the period necessary for fulfilling marketing or tax requirements, or as required by law.

Subcontractors: Require that any subcontractors or third parties engaged by either party also comply with data privacy obligations.

Breach Notification: Include an obligation to promptly notify the other party in the event of any actual or suspected data breach affecting personal data processed under the Agreement. That party must immediately report the breach to the relevant authorities, and take reasonable steps to remedy the situation.

2nd Key Document for Compliance: the Trade Descriptions Ordinance

The Trade Descriptions Ordinance is another key piece of legislation that your marketing partnership will need to comply with. It protects customer rights by prohibiting false and misleading descriptions about goods and services.

Depending on the exact provisions that are breached, punishment for deceptive marketing can include fines of up to $500,000 and imprisonment of 5 years. Therefore, it is best to communicate closely with your business partner, and to make sure that they have the most updated information about your products and services.

What are the requirements in the Trade Descriptions Ordinance?

The Ordinance ensures truthful advertising, clear disclosure of material information, regular review of marketing content, staff training, and internal approval procedures.

Firstly, all descriptions about the goods and services must be true. This covers both factual statements (e.g.: “the product is organic”), as well as misleading half-truths. You should make sure that no key information is omitted in the advertisements, and that there is a mechanism for the parties to cross-check and approve the advertisement content.

Furthermore, you may include advance arrangements in the agreement to allocate liability if one party breaches the provisions of the Trade Descriptions Ordinance. Such provisions can help safeguard your rights and clarify each party’s responsibilities in the event of a violation.

One final requirement that you should be aware of is that in the digital age, even social media posts and influencer marketing can fall under the Ordinance’s purview. Hence, the methods of digital marketing that are used in the partnership agreement should be clearly agreed upon and documented in the contract.

How DocLegal.ai helps create compliant marketing partnership agreements

When drafting with DocLegal.ai, you start from a contract template that you choose, from a library of over X documents. This includes tailor-made business agreements, general employment contracts, sales contracts, non-disclosure agreements, and more!

DocLegal.ai automatically identifies key issues, including allocation of liability, data protection obligations, and procedures for legal compliance—which are critical for reducing risk in your partnership. It automatically incorporates those clauses into your contract, which you can then further refine. The service will automatically revise the contract according to your suggestions. It can revise clauses, ensure compliance with legislation, and protect your business interests.

Sign up now to enjoy 50% off your first subscription, and learn how you can simplify your day-to-day bureaucratic and legal tasks.

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