Sales Commission Agreement
This Sales Commission Agreement (the "Agreement") is made as of [Start date] (the "Effective Date") between [Company], with an address at [Company address] ("Company"), and [Sales representative (person or agency)], with an address at [Sales representative address] ("Representative"). Company wishes to appoint Representative to solicit orders for its products on commission, and Representative accepts the appointment, on the terms below. Company and Representative are each a "Party" and together the "Parties".
1. Appointment, Products and Territory
Company appoints Representative to solicit orders for the following products and services (the "Products"): [Products or services the representative may sell], from customers located in the following territory (the "Territory"): [Territory]. The appointment is: [Appointment]. If exclusive, Company shall not appoint another representative for the Products in the Territory during the term, but Company may itself sell in the Territory and may sell through its website and through national or house accounts. If non-exclusive, Company may appoint other representatives and sell through any channel. Company may add or withdraw Products or adjust the Territory on sixty (60) days’ written notice; a withdrawal does not affect commissions on orders accepted before it takes effect.
The following customers are house accounts on which no commission is payable, regardless of Representative’s contact with them (the "House Accounts"): [House accounts (no commission; or “None”)]. Company may designate an additional House Account only by written notice, and commissions remain payable on orders from that customer accepted within ninety (90) days after the notice if Representative had registered an active opportunity with it before the notice.
2. Duties of Representative
Representative shall use diligent efforts to solicit orders for the Products in the Territory, shall present the Products accurately using Company’s current price lists and materials, shall promptly forward all orders, inquiries and complaints to Company, shall keep Company informed of market conditions and competitive activity, and shall comply with all applicable laws and with Company’s written policies provided to Representative. Representative shall not: quote prices or terms other than those Company authorizes in writing; make any representation, warranty or commitment on Company’s behalf beyond Company’s published materials; accept payment from customers except as Company directs; sell products that compete with the Products; or use Company’s name or trademarks except as authorized. All orders are subject to acceptance by Company at its offices, and Company may reject any order or any customer for credit or any other reason, without liability to Representative. Minimum annual sales, if any: [Minimum annual sales (or “None”)]; failure to meet a stated minimum in any year is ground for Company to terminate this Agreement or convert an exclusive appointment to non-exclusive on thirty (30) days’ notice.
3. Commissions
Company shall pay Representative a commission of [Commission rate (% of net sales)] percent of Net Sales on each order for Products from a customer in the Territory that is solicited by Representative, or that is from a customer credited to Representative under Section 5, and that is accepted by Company (the "Commission"). "Net Sales" means the invoice price of the Products actually charged to the customer, less freight, taxes, duties, installation and other separately stated charges, discounts, allowances, returns and credits. No Commission is payable on House Accounts, on sales of products other than the Products, on samples or demonstration units, or on any order Company rejects or the customer cancels before shipment.
A Commission is earned when: [Commission is earned when]. Until earned, a Commission is contingent and not payable. Company may change the Commission rate prospectively on sixty (60) days’ written notice; the change applies to orders accepted after the notice period ends and does not reduce any Commission already earned or any Commission on an order accepted before the change.
4. Payment, Statements and Chargebacks
Company shall pay all Commissions earned in a calendar month on or before the [Commissions paid by this day of the following month] day of the following month, by direct deposit or check, together with a statement listing each order, customer, invoice amount, Net Sales and Commission. If a monthly draw of [Monthly draw against commissions (or $0)] is stated, Company shall pay the draw on the same schedule as an advance against Commissions, and Commissions earned are applied first to repay the draw for that month and any accumulated unrecovered draw; if this Agreement ends with an unrecovered draw, Representative is not required to repay it except to the extent of Commissions earned after termination, unless the draw is stated to be recoverable in a separate signed writing. If the draw amount is zero, there is no draw.
If, within [Chargeback window after payment (days)] days after Company pays a Commission, the customer returns the Products, receives a credit, or fails to pay the invoice and Company writes it off, Company may deduct the Commission previously paid on the affected amount from Commissions subsequently earned (a "Chargeback"), and shall show each Chargeback on the statement. Chargebacks shall not reduce any payment below zero, and no Chargeback shall be made for a customer’s non-payment caused by Company’s failure to perform. Representative shall notify Company in writing of any dispute about a statement within sixty (60) days after receipt; statements not disputed within that period are final except for arithmetic errors.
5. Split Commissions and Attribution
If an order results from the efforts of Representative and another representative of Company, or the customer is located in the Territory but the order is placed or shipped outside it, or the reverse, Company shall determine a fair division of the Commission in good faith considering where the order was solicited, where the customer is located and where the Products are delivered, and shall notify the representatives concerned in writing. Representative may register a prospect with Company in writing to establish attribution; a registration remains active for one hundred eighty (180) days and may be renewed on evidence of continuing activity. Company’s good-faith determination of attribution is final.
6. Status, Expenses and Taxes
Representative’s status is: [Representative’s status]. If Representative is an independent contractor, Representative controls the manner, means and hours of soliciting orders, bears all expenses of doing so including travel, communications, entertainment and any personnel Representative engages, is responsible for all taxes on Commissions, shall provide a Form W-9, will receive a Form 1099, is not entitled to any employee benefit, and shall maintain any insurance and licences the law requires for Representative’s business; Representative may represent other manufacturers of non-competing products. If Representative is an employee, this Agreement is the commission plan under Representative’s employment agreement, Commissions are wages subject to withholding, expenses are reimbursed under Company’s expense policy, and any conflict between this Agreement and the employment agreement is resolved in favour of the employment agreement except as to the calculation and timing of Commissions, which this Agreement governs. In either case Representative has no authority to bind Company and shall not represent otherwise.
7. Confidentiality; Customers
Representative shall keep confidential and not use, except to perform this Agreement, Company’s non-public information, including pricing, costs, customer lists and data, product plans, and the terms of this Agreement, during the term and for three (3) years after it ends, and for trade secrets for as long as they remain trade secrets. All customer lists, orders, records and materials relating to the Products, and all customers and customer relationships developed under this Agreement, belong to Company. During the term, Representative shall not solicit customers of Company for competing products or induce any customer to reduce its business with Company. On termination, Representative shall return all Company materials and customer information. Notice under 18 U.S.C. §1833(b): an individual shall not be held liable under any trade secret law for disclosing a trade secret in confidence to a government official or an attorney solely to report or investigate a suspected violation of law, or in a document filed under seal in a legal proceeding.
8. Term and Termination
This Agreement begins on the Effective Date and continues until terminated. Either Party may terminate it for any reason on [Termination notice (days)] days’ written notice to the other. Either Party may terminate it immediately on written notice if the other materially breaches this Agreement and fails to cure the breach within ten (10) days after written notice, or if the other becomes insolvent or ceases business. Company may also terminate immediately if Representative engages in dishonesty, misrepresentation to customers, or conduct that damages Company’s reputation. On termination Representative shall cease representing Company and using its name and materials.
9. Post-Termination Commissions
Termination does not affect Commissions on orders accepted by Company before the termination date, which Company shall pay as they are earned, on the schedule in Section 4, without reduction. In addition, Company shall pay Commissions on orders from prospects that Representative registered under Section 5 before the termination date and that Company accepts within [Post-termination commission tail on registered prospects (days)] days after the termination date. No Commission is payable on orders accepted after that period, on renewals or reorders after it, or on orders from customers not registered before termination. All Commissions earned before termination that have not yet been paid shall be paid on the next regular payment date, or earlier if required by the law of the state where Representative resides, and Company shall provide a final statement. Chargebacks under Section 4 continue to apply to post-termination payments for their stated period. Sections 4, 6, 7, 9 and 10 survive termination.
10. General
This Agreement is governed by the laws of the State of [Governing law (state)], without regard to its conflict of laws rules, except that any state sales representative statute applicable to Representative that cannot be waived applies as well. Any action arising out of this Agreement shall be brought in the state or federal courts located in that state, and the prevailing Party is entitled to reasonable attorney fees and costs. Neither Party is liable to the other for indirect, consequential or punitive damages, except that this limitation does not apply to Commissions owed or to statutory penalties for their non-payment. This Agreement is the entire agreement between the Parties about its subject and supersedes all prior commission plans and understandings. It may be amended only in a writing signed by both Parties, except as Sections 1 and 3 permit Company to change Products, Territory and rates on notice. Representative may not assign this Agreement; Company may assign it to a successor to its business. If any provision is held unenforceable, the remainder continues in effect. Notices shall be in writing and delivered to the addresses above or the email addresses in the execution record. This Agreement may be signed electronically and in counterparts, each of which is an original and all of which together are one instrument, and the electronic execution record, timestamps and document fingerprints kept by the signing platform are conclusive evidence of its execution. Representative acknowledges receipt of a signed copy of this Agreement.
Signatures
Company · Sales representative