This clause says how much money each party must spend on advertising and promoting the product. For example, the supplier might agree to pay for national TV ads, while you pay for local store displays. This matters legally because it's a binding obligation—if you don't spend the agreed amount, the supplier can claim you breached the contract and may terminate it. Courts will enforce these spending commitments if they're specific enough (for example, "£10,000 per year" is enforceable, but "reasonable efforts" is vague and harder to enforce).
Only agree to marketing spending you can actually afford and plan to do—this is a real financial obligation, not a suggestion. Get specific numbers in writing (not vague phrases like "adequate marketing"), and make sure the clause says what counts as marketing spend (social media? in-store displays? trade shows?). Build in a review clause so you can adjust spending if sales don't meet targets, and ask for the supplier's marketing spend to be equally specific. ---
Frequently Asked Questions
What does this clause mean in simple terms?
This clause says how much money each party must spend on advertising and promoting the product.
Why should I care about this clause?
For example, the supplier might agree to pay for national TV ads, while you pay for local store displays.
What are my options?
This matters legally because it's a binding obligation—if you don't spend the agreed amount, the supplier can claim you breached the contract and may terminate it.
How does this affect small businesses?
Courts will enforce these spending commitments if they're specific enough (for example, "£10,000 per year" is enforceable, but "reasonable efforts" is vague and harder to enforce).