What is a Commission Sales Agreement?

Sales compensation contract establishing commission structure, territory rights, sales targets, payment terms, and performance metrics for independent sales representatives and direct sales arrangements.

What should a Commission Sales Agreement include?

Whereas, Appointment, Term, Representative, Company, Commission And Payment.

When do I need a Commission Sales Agreement?

Engaging independent sales representatives for territory coverage and market expansion. Establishing commission-based compensation structure for sales team performance incentives. Creating sales representation agreement with clear territory and product scope. Setting up performance-based sales relationship with accountability and payment protection. Expanding sales reach through independent contractors while maintaining control over sales process.

Free Commission Sales Agreement Template | Download & Customize

COMMISSION SALES AGREEMENT

THIS AGREEMENT is made on [Date], BETWEEN:

[Company Name], a company organized and existing under the laws of [State/Country], with its principal place of business at [Company Address] ("Company"),

AND

[Sales Representative Name], residing at [Sales Representative Address] ("Representative").

WHEREAS

The Company is engaged in [describe business/products/services];
The Representative wishes to sell the Company’s products/services on a commission basis;
The Company desires to engage the Representative to sell its products/services under the terms set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the parties agree as follows:

1. APPOINTMENT

1.1 The Company hereby appoints the Representative as its [exclusive/non-exclusive] sales representative for the products/services described in [Exhibit A/Product List] ("Products") within the territory of [describe territory] ("Territory").

1.2 The Representative accepts such appointment and agrees to act in accordance with the terms of this Agreement.

2. TERM

2.1 This Agreement shall commence on [Effective Date] and shall continue until [End Date/“terminated as provided herein”].

3. REPRESENTATIVE’S DUTIES

3.1 The Representative shall:

Use best efforts to promote and sell the Products within the Territory.
Comply with all applicable laws and regulations.
Refrain from making any false or misleading representations regarding the Products or the Company.
Promptly communicate all inquiries and orders to the Company.

4. COMPANY’S DUTIES

4.1 The Company shall:

Provide the Representative with necessary product information, pricing, and promotional materials.
Timely fulfill all accepted orders resulting from the Representative’s efforts.
Pay commissions as set forth in this Agreement.

5. COMMISSION AND PAYMENT

5.1 The Company shall pay the Representative a commission of [Commission Percentage]% of the Net Sales Price (as defined below) of all Products sold by the Representative and accepted by the Company.

5.2 "Net Sales Price" means the actual amount received by the Company from the sale of Products, excluding taxes, shipping, handling, discounts, and returns.

5.3 Commissions shall be paid [monthly/quarterly] within [Number] days after the end of each [month/quarter].

5.4 No commission shall be paid on sales that are cancelled, returned, or not collected.

6. EXPENSES

6.1 Unless otherwise agreed in writing, the Representative shall bear all expenses incurred in connection with the performance of this Agreement.

7. CONFIDENTIALITY

7.1 The Representative agrees not to disclose or use any confidential or proprietary information of the Company except as necessary to fulfill obligations under this Agreement.

8. INDEPENDENT CONTRACTOR

8.1 The Representative is an independent contractor and not an employee, agent, or partner of the Company. Nothing in this Agreement shall be construed to create any employment, partnership, or joint venture relationship.

9. TERM & TERMINATION

9.1 Either party may terminate this Agreement at any time by giving [Notice Period Days] days’ written notice to the other party.

9.2 The Company may terminate this Agreement immediately for cause, including but not limited to breach of this Agreement, fraud, or misconduct.

9.3 Upon termination, the Representative shall be entitled to commissions on sales completed prior to the termination date.

10. NON-COMPETE AND NON-SOLICITATION [Optional]

10.1 During the term of this Agreement and for [Number] months after termination, the Representative shall not:

Sell competing products/services within the Territory; or
Solicit the Company’s customers for competing products/services.

11. GOVERNING LAW

11.1 This Agreement shall be governed by and construed in accordance with the laws of [Governing Law State/Country].

12. MISCELLANEOUS

12.1 Entire Agreement: This Agreement constitutes the entire agreement between the parties and supersedes all prior agreements or understandings.

12.2 Amendments: Any amendments must be in writing and signed by both parties.

12.3 Notices: All notices shall be in writing and delivered to the addresses set forth above or such other address as either party may designate.

12.4 Severability: If any provision is found invalid, the remainder shall remain in full force and effect.

12.5 Assignment: The Representative may not assign this Agreement without the Company’s written consent.

13. DISCLAIMER

This document is a template and may not be suitable for all situations. The parties should consult with legal counsel before signing this agreement.

SIGNATURES

IN WITNESS WHEREOF, the parties have executed this Commission Sales Agreement as of the date first written above.

COMPANY:
By: ___________________________
Name: [Name]
Title: [Title]
Date: [Date]

REPRESENTATIVE:
By: ___________________________
Name: [Sales Representative Name]
Date: [Date]

Commission Sales Agreement