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Sales Commission Agreement template
Sales Commission Agreement sample


What is Sales Commission Agreement?

Sales Commission Agreement A Sales Commission Agreement outlines terms for commission-based sales, specifying commission rates, sales targets, payment schedules, and commission calculations.



Sample template:



SALES COMMISSION AGREEMENT


1. AGREEMENT PARTIES

This Sales Commission Agreement (the "Agreement") is made and entered into as of [Effective Date], by and between [Company Name] (the "Company"), with its principal place of business located at [Company Address], and Kevin Foster (the "Sales Representative"), residing at [Representative Address]. The Company and the Sales Representative shall collectively be referred to as the "Parties.



2. APPOINTMENT OF SALES REPRESENTATIVE

2.1. Appointment


The Company hereby appoints the Sales Representative as an independent contractor to solicit orders for the Company's products and services within the assigned sales territory, subject to the terms and conditions set forth in this Agreement.


2.2. Independent Contractor


The Sales Representative's relationship with the Company shall at all times be that of an independent contractor, and nothing in this Agreement shall be construed as creating an employer-employee relationship or a partnership, agency, or joint venture between the Parties.



3. SALES TARGETS

The Sales Representative shall be responsible for achieving the sales targets as set forth in Schedule A, which is attached hereto and incorporated by reference. The Company may revise the sales targets unilaterally upon 30 days' written notice to the Sales Representative.



4. COMMISSION

4.1. Calculation of Commission


The Company shall pay the Sales Representative a commission (the "Commission") based on the net sales revenue, which is calculated by deducting any refunds, returns, chargebacks, discounts, sales taxes, and any other applicable deductions from the sales price, as set forth in Schedule B, which is attached hereto and incorporated by reference.


4.2. Commission Rates


The Commission shall be calculated as a percentage of the net sales revenue or on a per-item basis, as provided in Schedule B. The Sales Representative's entitlement to Commission shall arise only upon the Company's receipt of the full-payment from customers.


4.3. Changes to Commission Rates


The Company reserves the right to modify the Commission rates upon 30 days' prior written notice to the Sales Representative. Any modifications to the Commission rates shall not apply retroactively, and the Sales Representative's Commission shall be calculated based on the rate in effect at the time of the sale.



5. PAYMENT OF COMMISSION

5.1. Payment Schedule


The Company shall pay Commission to the Sales Representative within 30 days following the end of each calendar month during which the Commission becomes payable. The Company shall provide the Sales Representative with a statement detailing the calculation of the Commission payable for that month.


5.2. Taxes and Deductions


The Sales Representative shall be responsible for any federal, state, and local taxes, social security, and other contributions or amounts due with respect to the Commission. The Company shall not withhold or make deductions for any taxes, benefits, or other amounts, except as required by law.



6. RECORDS AND REPORTS

The Sales Representative shall maintain accurate and up-to-date records of all sales activities and customer information, and shall provide the Company with such information and reports as may be reasonably required. Upon termination of this Agreement, the Sales Representative shall promptly provide the Company with all records, reports, and other information in the Sales Representative's possession or control.



7. TERM AND TERMINATION

7.1. Term


This Agreement shall commence on the Effective Date and shall continue in full force and effect until terminated by either Party in accordance with the provisions of this Section 7.


7.2. Termination for Convenience


Either Party may terminate this Agreement without cause upon 30 days' prior written notice to the other Party.


7.3. Termination for Cause


Either Party may terminate this Agreement immediately upon written notice to the other Party if the other Party commits a material breach of this Agreement, which is not cure within 15 days after receiving written notice of such breach.



8. CONFIDENTIALITY

The Sales Representative agrees to keep confidential and not to disclose to any third party or use, any non-public information concerning the Company's products, services, customers, suppliers, pricing, marketing plans, or trade secrets (collectively, the "Confidential Information"), without the Company's prior written consent.



9. GOVERNING LAW AND DISPUTE RESOLUTION

9.1. Governing Law


This Agreement shall be governed by and construed in accordance with the laws of the United States and the laws of the state in which the Company's principal place of business is located, without regard to any conflict of law principles.


9.2. Dispute Resolution


Any dispute, claim, or controversy arising out of or in connection with this Agreement, including any question regarding its existence, validity, interpretation, or termination, shall be referred to and finally resolved by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules. The number of arbitrators shall be one. The seat or legal place of arbitration shall be the city in which the Company's principal place of business is located. The language to be used in the arbitral proceedings shall be English. The governing law of the Agreement shall apply.



10. MISCELLANEOUS

10.1. Entire Agreement


This Agreement, including any schedules and exhibits attached hereto, constitutes the entire agreement between the Parties concerning the subject matter hereof and supersedes all prior agreements, understandings, negotiations, and discussions, whether oral or written, between the Parties relating thereto.


10.2. Modifications


No modification, amendment, or waiver of any provision of this Agreement shall be effective unless in writing and signed by both Parties.


10.3. Severability


If any provision of this Agreement is held to be invalid or unenforceable by a court of competent jurisdiction, the remaining provisions shall remain in full force and effect, and the Parties shall negotiate in good faith a substitute provision that most nearly effects the Parties' original intent.



IN WITNESS WHEREOF

Each Party has executed this Agreement, in duplicate, as of the Effective Date.



_________________________ _________________________
[Company Name] Kevin Foster
By: [Authorized Signatory] Sales Representative

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Sections of a Sales Commission Agreement


In this Sales Commission Agreement, you will see the following sections:

  1. Agreement Parties
  2. Appointment of Sales Representative
  3. Sales Targets
  4. Commission
  5. Payment of Commission
  6. Records and Reports
  7. Term and Termination
  8. Confidentiality
  9. Governing Law and Dispute Resolution
  10. Miscellaneous


Summary of the sections:

  1. Agreement Parties : This section introduces the two parties involved in the agreement, the Company and the Sales Representative, and provides their contact information.

  2. Appointment of Sales Representative : This section outlines the Sales Representative's role as an independent contractor responsible for soliciting orders for the Company's products and services. It also clarifies that the relationship between the parties is not an employer-employee relationship, partnership, agency, or joint venture.

  3. Sales Targets : This section explains that the Sales Representative is responsible for achieving sales targets as specified in Schedule A. The Company can revise these targets with 30 days' written notice.

  4. Commission : This section describes how the Sales Representative's commission is calculated based on net sales revenue, as detailed in Schedule B. It also states that the Company can modify commission rates with 30 days' written notice, and that the Sales Representative is only entitled to commission upon the Company's receipt of full payment from customers.

  5. Payment of Commission : This section specifies that the Company will pay the Sales Representative's commission within 30 days following the end of each calendar month and provide a statement detailing the calculation. The Sales Representative is responsible for any taxes and deductions related to the commission.

  6. Records and Reports : This section requires the Sales Representative to maintain accurate records of sales activities and customer information and provide the Company with any necessary reports. Upon termination of the agreement, the Sales Representative must promptly provide the Company with all records and information in their possession.

  7. Term and Termination : This section outlines the duration of the agreement and the conditions under which either party can terminate the agreement, either for convenience or for cause.

  8. Confidentiality : This section requires the Sales Representative to keep the Company's confidential information private and not disclose it to any third party or use it without the Company's prior written consent.

  9. Governing Law and Dispute Resolution : This section states that the agreement is governed by the laws of the United States and the state where the Company's principal place of business is located. Any disputes arising from the agreement will be resolved through arbitration administered by the American Arbitration Association.

  10. Miscellaneous : This section covers various additional provisions, such as the agreement being the entire agreement between the parties, the requirement for any modifications to be in writing and signed by both parties, and the severability of any invalid or unenforceable provisions.

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