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Sales Commission Agreement Template
Tired of unclear commission structures causing confusion and demotivation among your sales team?
Our customizable commission agreement template provides a straightforward framework to establish clear expectations, promote accountability and foster a motivated workforce. Download now to efficiently manage your sales team's compensation.
Used by 156 people
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Our sales commission agreement template simplifies your commission process by clearly outlining the following:
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Sales Commission
Agreement Template
| Date: [Date] | |
|
Prepared for: Employee/Agent Name: {{Employee.Name}} Employee/Agent Address: {{Employee.Address.Street}} {{Employee.Address.Street2}} {{Employee.Address.City}} {{Employee.Address.State}} {{Employee.Address.Zipcode}} |
Prepared by: Company Name: {{MyCompany.Name}} Company Address: {{MyCompany.BillingAddress.Street}} {{MyCompany.BillingAddress.Street2}} {{MyCompany.BillingAddress.City}} {{MyCompany.BillingAddress.State}} {{MyCompany.BillingAddress.Zipcode}} |
This Agreement will commence on [Commencement Date] and will continue for a period of [Duration], unless terminated earlier in accordance with this Agreement. The Agreement may be renewed or extended upon mutual written consent of both parties.
1. Identification of Parties
Company:
|
Employee/Agent:
|
2. Purpose
The purpose of this Agreement is to outline the terms and conditions under which the Employee/Agent will be compensated for sales of the Company's products/services.
3. Sales Territory
The Employee/Agent is authorized to sell the Company's products/services within the following territory:
- [Specify territory, e.g., countries, regions]
4. Products/Services
The Employee/Agent is authorized to sell the following products/services of the Company:
- [Detailed description of products/services]
5. Commission Structure
| The Company agrees to pay the Employee/Agent a commission based on the following structure: | |
|
Commission Rate: [Percentage]% of the gross sales revenue generated by the Employee/Agent. |
Tiered Commission: [Detailed description of tiered commission structure, if applicable] |
6. Payment Terms
| Payment Frequency: | Payment Method: | Payment Schedule: |
|---|---|---|
| Commissions will be calculated and paid on a [Monthly/Quarterly] basis. | Payments will be made via [Payment Method, e.g., direct deposit, check]. | Payments will be issued within [Number] days after the end of each [Month/Quarter]. |
7. Sales Reporting
The Employee/Agent agrees to submit sales reports to the Company on a [Weekly/Monthly] basis. The reports should include:
- Customer Information: Names and contact details of customers.
- Sales Information: Details of the products/services sold and the revenue generated.
- Prospective Leads: Information on potential customers and ongoing negotiations.
8. Confidentiality and Non-Disclosure
Both parties agree to keep all information exchanged during the course of this Agreement confidential. This includes but is not limited to business strategies, financial data, and proprietary processes. Neither party shall disclose any confidential information to any third party without prior written consent from the other party.
9. Term and Termination
| This Agreement will commence on [Commencement Date] and will continue until terminated by either party in accordance with this Agreement. | |
| Termination for Convenience: | Either party may terminate this Agreement with [Notice Period] written notice. |
| Termination for Cause: | Either party may terminate this Agreement immediately upon a material breach by the other party, provided the breaching party has been given [Cure Period] days to cure the breach. |
10. Governing Law, Jurisdiction, and Venue for
Dispute Resolution
This Agreement shall be governed by and construed in accordance with the laws of the State of [State]. Any disputes arising out of or in connection with this Agreement shall be resolved through mediation in [Location]. If mediation fails, disputes will be settled in a court of competent jurisdiction in the State of [State].
11. Entire Agreement, Amendments, and Waivers
This Agreement constitutes the entire agreement between the parties and supersedes all prior agreements and understandings, whether written or oral. Any amendments to this Agreement must be made in writing and signed by both parties. No waiver of any term of this Agreement shall be effective unless in writing and signed by the party against whom the waiver is to be enforced.
12. Signatures
| [Signature Block] [Date] |
[Signature Block] [Date] |
| {{Client.Name}} {{Client.Contact1.Name}} |
{{MyCompany.Name}} {{Document.Owner.Name}} |
Exhibit A: Detailed Description of Products/Services
-
1. Product/Service 1: Description of product/service 1.
2. Product/Service 2: Description of product/service 2.
3. Product/Service 3: Description of product/service 3.
Exhibit B: Commission Structure
-
1. Commission Rate: [Percentage]% of the gross sales revenue.
2. Tiered Commission Structure: Detailed description of tiered commission structure, if applicable.
Exhibit C: Sales Reporting Template
-
1. Customer Information: Names and contact details of customers.
2. Sales Information: Details of the products/services sold and the revenue generated.
3. Prospective Leads: Information on potential customers and ongoing negotiations.
Exhibit D: Confidentiality and Non-Disclosure Agreement
-
1. Definition of Confidential Information: Explanation of what constitutes confidential information.
2. Non-Disclosure Obligations: Restrictions on sharing information.
3. Return of Information: Procedures for returning confidential information upon termination.
What will you get in the template?
Our sales commission agreement template simplifies your commission process by clearly outlining the following:
Frequently asked questions
A written commission agreement is a formal contract between an employer and an employee or an independent contractor, stipulating the terms under which commissions will be paid. The agreement outlines how the commission will be calculated, when it will be paid, and under what circumstances. It serves as a legal document to ensure both parties understand their obligations and the basis for the commission payments.
A commission agreement provides multiple benefits: it clarifies compensation terms for all parties, reduces conflicts by documenting agreed-upon terms, and motivates performance by explicitly defining rewards. Additionally, it offers legal protection, serving as a reliable reference in case of misunderstandings or litigation, thus ensuring smoother operational dynamics and legal compliance.
A commission agreement is versatile and crucial across multiple business scenarios. It's essential for sales positions where compensation is largely commission-based, for freelancers and contractors who are paid upon project completion, and in business development roles where pay is linked to performance metrics or specific achievements. This type of agreement clearly outlines payment structures, aligning expectations and incentivizing desired outcomes.
A typical sales commission contract often combines a base salary with a commission component to balance motivation with financial stability. One common structure is the base salary plus commission plan, where a typical ratio is 60:40, allocating 60% to base salary and 40% to commission. The plan best serves as an incentive or motivation for increased sales performance.
Yes, of course. While it's possible to write your own commission contract, using a professionally designed template can ensure that all legal and practical bases are covered.
Zomentum provides a comprehensive commission agreement template that simplifies the process, ensuring you have a robust document that meets standard legal requirements. We offer 100+ more templates that you can use for your business operations. Download our template to avoid common pitfalls and streamline your agreement drafting process.
Terminating a commission agreement typically involves the following steps:
- Review the Contract: Check the agreement for any clauses related to termination, including notice periods and required procedures.
- Notify the Other Party: Provide written notice to the other party stating your intention to terminate the agreement, adhering to the terms specified in the contract.
- Settle Outstanding Obligations: Ensure that any outstanding payments are settled as per the agreement terms before the termination takes effect.
- Document the Termination: Keep records of the termination notice and any other correspondence related to the termination.
Yes, Zomentum's commission agreement template can be adapted for international sales. However, it's important to consider local laws and regulations that might affect the commission structure or payment terms. Tailoring the template to fit the legal requirements of the specific countries involved is essential for enforceability.
- Payment Structure: Details on how commissions are calculated and paid.
- Performance Targets: Specific goals that must be met to earn commissions.
- Term of Agreement: Duration of the contract and conditions for renewal.
- Termination Clauses: How the agreement can be terminated by either party.
- Legal and Regulatory Compliance: Ensures the agreement adheres to relevant laws and regulations.
If sales targets are not met under a commission agreement, the document typically specifies the consequences. Often, this means that the commission payments might be reduced or withheld. The agreement should outline remedial measures or adjustments to targets in case of unforeseen circumstances.
Yes, digital signatures are legally binding in many jurisdictions and can be used to execute a commission agreement. You can use Zomentum to create a digital signature and speed up the agreement process. Digital signatures also offer convenience, and provide an audit trail that can be valuable in case of disputes.
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