If you're wondering what agency agreements are, what their aim is, and how you can get a free agency agreement for yourself or your company, then this articleis the place to be.

In this article, we shall explain the concept of an agency agreement, its complexities, and what are the dos and don'ts if you intend to make this agreement with another party.

This article will provide you valuable insight and answer all queries regarding the agency agreement. Moreover, this article will show how agency agreement canbe a tool to expand your business or earn valuable commission by being anassociate to a business.

What Is an Agency Agreement?

Agency agreement is an agreement between a company and an agent. The essential purpose of this agreement for the company is to use the agent for the company's interests.

The agents are allowed by the company to profess the interests of the company, gain revenue for them, and establish goodwill of the company. In this way, the agents can be an invaluable asset for the company that hires them.

It is important to remember that these agents are non-contract workers innature. This aspect holds a certain significance in an agency agreement as it allows companies to hire non-contract agents that provide them with certain services.

These services could range from the selling of the goods supplied by the company to other more executive services such as legal consultancy and advisory duties as well.

The agents are allowed to work over a given territory and time period to secure some revenue for the company and are paid commission in return.

When to Use an Agency Agreement?

Now that we understand the basics of the free agency agreement, the next step is to understand when it is the most advantageous for your business to employ this agreement. Let’s understand the optimum time and usage of an agency agreement:

  • The agency agreement would come in handy if you don't know the dynamics of agiven market. This agreement can be employed to bring in an agent on yourbehalf, to sell or manage the goods that you have provided, over a certain territory and time period.
  • This allows you to extend your business into the far-reaching areas of your state where you may not have previous experience.
  • The agent can be a valuable asset as it does not pose a liability to the company hiring the agent. The non-contract part of the agent states that any damages incurred during the process of hiring and working of the agent, the company has limited no liability.

What Constitutes an Agency Agreement?

There are many things that come into play while a free agency agreement is being constructed. The following factors constitute an agency agreement:

The Territory And Time Period

This is a pretty important one among the basics. The company has to provide a territory and time plan as well. The agent may be given some version of autonomy in deciding the extent of his services depending upon the situation, but this has to be defined in the given agreement.


Exclusivity is an important factor. The company can ask the agent to exclusively deal with their agreement, or the agent could alternatively be allowed to focus on multiple customers at a time as well.


The commission of the agent is described in the agency agreement as well. The commission is usually a percentage of the total revenue generated by the agent over the course of its work.

The commission or compensation can be conditional and linked to the services and their delivery by the agent.


Expenses are decided upon by the company and the agent as well. The expenses are usually all imposed on the agent, during the time period where the agent is providing the service. However, certain transportation and other expenses can be decided to be paid by the company.

These are the essentials of the free agency agreement. In addition to the aforementioned factors, the agreement has a very crucial point of the agents being non-contract workers. Pay particular attention to understand this clause in the upcoming part.

What Is the Limited Liability of an Independent Contractor?

In an agency agreement, the agents are independent contractors which means a number of possibilities for the hiring authorities. These possibilities emerge due to the limited liability clause and include, but not limited to, the following:

  • Limited liability is a very attractive clause for the hiring authorities. Limited liability states the errors made by the agent in working and managing the services, and the damages being imposed as a result of that, shall not be liable on the company.
  • The company has limited liability in this case which means that the individuals of the authoritative board shall not bear any expense, in case the agent is unable to meet any given criteria.
  • Both parties are liable to indemnify one another in case of loss of capital, breach of the law, or any miss judgments made by either of the parties at the expense of the other.
  • In case of natural disasters, the parties shall not be held accountable for nor holding up their part of the deal. If this situation continues for 6 months or more, it will urge the parties to sit together and talk about alternatives that they may need to adopt.

Where to Get Your Free Agency Agreement?

Now, you must be thinking of where you can get your free sample of an agency agreement. The free agency agreement still requires serious legal reasoning and guidance as well. The advisory company, to provide you with a foolproof legal document is none other than the Cocosign.

Cocosign is one of the best companies out there to provide you with valuable and quality services when it comes down to you and your legal documents.

We take special care in crafting a legal document that takes care of your required considerations in a lawful process, so that you may never fall behind when it comes to your matters with the law. Get your free sample of the agency agreement template on Cocosign now!

Don't forget to celebrate your signing experience!

CocoSign, is simply document signing for each business. You could build a stronger relationship and share your experience with each client and partner.


The agency agreement is a great way to hire third-party contractors or agents for expanding your business, without bearing any additional liability.

These agents often have a special skill set, tailored to your needs that can be employed as such to gain revenue and prosperity in the business. The legal aspects of the agreement have been disclosed in detail in the article.

Keeping in mind the conditions of the agreement, the business owner, as well as the hired agent, can gain maximum advantage for themselves while remaining within the boundaries of the law.


CocoSign represents a wide collection of legal templates covering all types of leases, contracts and agreements for personal and commercial use. All legal templates available on CocoSign shall not be considered as attorney-client advice. Meanwhile, CocoSign shall not be responsible for the examination or evaluation of reviews, recommendations, services, etc. posted by parties other than CocoSign itself on its platform.