Commission Agreement
Spell out how a sales representative earns and is paid commission.
Set how a seller is paid commission on sales.
- Business / Legal document
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Key features
Percentage or fixed amount
A section for either, with a blank for what the percentage is worked out on, such as net invoice value.
Earned only when you say
A blank for the moment commission is earned, for example when the customer has paid in full.
Who counts as the representative's customer
A blank for how an introduction is established and a rule for when two people claim the same one.
Statements
Commission is paid with a statement, and the representative may ask for the detail behind it.
Returns and unpaid invoices
A blank for whether commission is not payable, repayable or set against the next statement.
About this document
A commission agreement records how a company pays someone for the business they bring in: the rate, what it is worked out on, when it is earned, when it is paid and what happens to commission when sales fall through.
It deals with the money rules closely. You complete the blanks by hand and both sign.
Is this document right for you?
Useful when
- You pay sales people or introducers on results
- Disputes over who introduced a customer are likely
- You want the pay terms separate from a wider contract
Commonly used by
- Small companies with commission-based sellers
- Representatives and introducers
- Startups paying for referrals
Not sure? about your situation first.
Alternatives
These are separate documents, for different jobs.
- Agency agreementsAppoint an agent to act or sell on your behalf.View document
- Independent-contractor agreementsSet the terms of work with an independent contractor.View document
- Employment agreementsSet out pay, role and terms for an employee.View document
- Consulting agreementsSet the terms of a consulting engagement.View document
When to use this
- A company engages a representative to bring in customers
- A business pays a referral fee on each new account
- A seller wants the earning rules in writing before starting
What happens next
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More in Sales, Distribution & Commercial
- Sales agreementsSet the terms for selling goods or services.View document
- Distribution agreementsAppoint a distributor and set the terms of distribution.View document
- Supplier agreementsSet the terms of supply with the businesses you buy from.View document
- Agency agreementsAppoint an agent to act or sell on your behalf.View document
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Questions
About the commission agreement
The form says nothing that makes them one. How a person is classified depends on the facts and on the state, and commission rules can differ for employees.
Still have a question? .