The calculation of sponsorship fees is another important point on which the parties should agree before entering into a written agreement. The clause outlines the conditions under which the sponsor may terminate its sponsorship. This clause should be read and negotiated appropriately, as it can exploit the rights of the organisers. Either party may wish to limit its liability under the agreement by excluding liability for indirect/consequential damages, by imposing a « cap » on liability or in some other way. In addition, the sponsored party is responsible for ensuring that all laws and regulations are complied with, that the event or program proceeds as agreed, and that there is appropriate advertising and marketing of the event or program. The Promoter will ensure that the Sponsored Party does not enter into agreements detrimental to the Promoter`s advertising and that it cannot act in such a way that the Promoter can be held liable for anything. That clause shall also lay down the period within which payment must be made, including the method of payment; If the amount is to be paid in instalments or lump sum, it must be fixed in the agreement. No contract between the partners in a sponsorship agreement, so well elaborated and carefully thought out, can completely exclude the possibility of a misunderstanding, or even a stormy dissolution. Finally, a sponsorship agreement is as strong as the un documented trust between the two parties.
But this trust is always reinforced when both partners pay thoughtful attention to the legal/contractual foundations that contribute to ensuring that neither party receives a gross surprise.