Commission Agreement Form

A commission agreement form is a written agreement between two parties. The first party has goods or services they want to sell. The second party will market and sell the goods or services. The first party promises to pay the second party a certain amount of money, known as a commission, for each sale made. A commission agreement form should list the percentage of commission or the dollar amount as commission for each sale as well as when commissions will be paid out.

What is a commission agreement?

This is an agreement between two parties, one party being a seller or distributor and the other party being the provider of the good or an employer. This agreement details the relationship between the two parties.

This agreement will explain what kinds of commission payments will be made to the person selling products, or the employee.  Additional details may include product prices, when the payments will be made, what the payments are based on, payment method, commission percentages, and if there is a limit on the amount of commission that a seller can make.

Both parties will need to provide contact information for the agreement. The contract should be looked over carefully before it is signed to ensure accuracy and to determine if the terms are appropriate and acceptable to both parties. Once it is signed, it can become a legally binding contract.  It may be advisable to seek legal advice prior to signing.

A sales commission agreement is an important tool when you are hiring a new salesperson.  It is also important to the salesperson who will be paid on a commission basis. The agreement benefits both parties because it sets clear terms for the relationship and prevents misunderstandings.

Other Names

  • Commission Contract
  • Commission Sales Agreement
  • Sales Commission Agreement

Components of a Commission agreement

  • Contact Information - First name and last name of representative, name or company, address and phone details for both parties
  • Authorization - Authorizes the salesperson to sell goods or services on the employer’s behalf.
  • Commission Structure - Lays out the compensation details, commission rate.
  • Documentation - Instructs a salesperson to use company-approved documentation and forms for sales activities.
  • Non-Compete Clause - Requires a salesperson to promise not to represent competing brands and companies for a certain period of time.
  • Non-Disclosure Clause- Requires a representative to act in the best interest of the employer and keep business secrets and proprietary and confidential information protected at all times.
  • Acceptance - The parties accept the agreement by signing and dating it.

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