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The Law of Advertising
Copyright 2017, Matthew Bender & Company, Inc., a member of the LexisNexis Group.

1-3 The Law of Advertising 3.syn


The Relationship between the Media and Advertising Agencies


James B. Astrachan.; Original Authors: George Eric Rosden;; and Peter E. Rosden

Chapter Summary


This chapter of The Law of Advertising (Matthew Bender) covers issues related to the relationship between the media and advertising agencies.

The chapter discusses the requirements to shield a medium from liability where an agency acts for a principal under a facilities contract. It explains why an advertiser is not required to notify a medium that the advertiser has an advertising agency as its agent. It also examines the terms and conditions of contracts between advertising agencies and Internet-based media companies that the American Association of Advertising Agencies and the Interactive Advertising Bureau proposed. Further, the chapter addresses the FCC's requirement that broadcasters have a non-discrimination clause in their advertising contracts.

In addition, the chapter discusses the sole liability clause, according to which the medium undertakes to hold the advertising agency solely liable for the time or space bought with the facilities contract in question. It also examines the sequential liability clause, which makes advertisers liable for advertising charges unless the advertiser has paid the agency for those charges. Then, the chapter covers the dual liability clause, under which the advertiser and agency are jointly and severally liable for payments owed to the media.

The chapter also addresses the media's practice of paying commissions to advertising agencies, examines the duties that media owe to advertising agencies, and discusses advertising agencies' contractual and tort liabilities to the media.

The Law of Advertising (Matthew Bender) covers the rules governing each party to the advertising contract: media, consumers, advertisers, and advertising agencies. It examines the relationship between the originators of advertising; constitutional problems in advertising, with coverage of commercial advertising and the First Amendment; the Federal Trade Commission's control of advertising; the law regarding specific statements, such as representations as to quantity, quality, effect, and price; procedure before the Federal Trade Commission; liabilities of the parties of advertising; and international advertising. The Law of Advertising also covers competitors' remedies, including thorough discussion of unfair competition, as well as consumers' remedies. In addition, it provides guidance on advertising problems related to specific advertisers, such as attorneys and medical professionals, along with specific methods of advertising, such as internet advertising, telemarketing, and direct marketing.


media,advertising agencies,agency,facilities contract,American Association of Advertising Agencies,Interactive Advertising Bureau,FCC,non-discrimination clause,sole liability clause,sequential liability clause,dual liability clause,commissions,contractual liabilities,tort liabilities


For treatment of the fundamental issues related to the relationship between advertisers and advertising agencies, see Chapter 1.

For coverage of the use of facilities contracts, which are agreements between media and advertisers for time, space, spots, or programs, see Chapter 2.

For examination of the liabilities of advertisers, see Chapter 43.

For treatment of the liabilities of advertising agencies, see Chapter 44.

For discussion of the liabilities of media, see Chapter 45.


For exhaustive and authoritative analysis of all the rules of contract law, including all exceptions and variations, see Corbin on Contracts (Matthew Bender).

For expert guidance on negotiating and drafting contracts in the major areas of the entertainment industry, including entertainment software, state-of-the-art forms with contract clauses, instructions on filling out the clauses, and advice on negotiating the proper terms, see Entertainment Industry Contracts (Matthew Bender).

For extensive coverage of a variety of business torts, such as breach of fiduciary duty, unjust dismissal, commercial defamation, deceptive advertising, interference with contract relations, antitrust violations, private RICO actions, intellectual property violations, products liability, liability for environmental impairment, and premises liability, see Business Torts (Matthew Bender).

For in-depth legal and policy analyses of compensatory and punitive damages in personal injury, wrongful death, and property damage cases, plus case annotations to all jurisdictions and examples of illustrative awards and settlements, see Damages in Tort Actions (Matthew Bender).

For expert analysis of specific remedies; examination of litigation costs, economic factors, and other relevant practical considerations for both plaintiffs' and defendants' attorneys; and coverage of specific situations in which the business entity has been damaged, including remedies for breach of contract for the sale or lease of goods, see Commercial Damages: A Guide to Remedies in Business (Matthew Bender).
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