Commission Agreement 2
Commission Agreement 1
Commission Agreement 2
Commission Agreement 1

Commission Agreement

    Whether you work as a supplier or a distributor, an official commission agreement can help you finalize the contract of selling goods on commission. We have created a standardized commission agreement template to help you clarify the commission details and avoid future misunderstandings.

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Commission Agreement
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Commission Agreement

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Two parties enter into a written commission agreement to seal the deal of selling goods on commission. Here, one party has the products or services which are meant to be sold whereas the other party agrees to sell those products or services in the market.

The first party then promises to pay a certain amount of money as commission for every sale. However, the commission amount should be mutually agreed upon by both parties.

The percentage of the sales or dollar amount as commission should be listed in the commission agreement template. Furthermore, understanding commission agreement in-depth, please read the following sections.

What Is a Commission Agreement?

A legally bound document between two parties where one party is a seller or distributor and the other one is the provider of the goods, and services or an employer. This document describes in detail the terms of both the parties' relationship.

Many people also call this sale commission agreement. Hereby, it is described what kind of commission payment the seller of the products or services deserve to be earned and the person who is liable to pay that commission.

Additionally, the details of the products’ prices, what the commission payment is based on, a deadline to make the payment, payment method, percentage of commission, and the limit of the commission by the seller, if any.

Both parties shall provide information like contact details, address proof, and more for the agreement. The parties should look into the contract carefully before finally signing it to ensure the terms are accurate and acceptable to both the parties.

Legal advice shall be sought if needed before signing. However, the selling party also wishes to come under commission agreements when hiring a new salesperson who will be paid on the commission basis.

The agreement is the perfect way to set clear terms between the involved parties and prevent any chaos.

Download a Free Commission Agreement Now!

Since our commission agreement is legally binding, it can help you build a professional commission relationship with your clients. Our easy to understand commission agreement is structured to include all important clauses, such as the non-disclosure clause and verified contact information. Before you start working with a new supplier or distributor, make sure you download and sign a commission agreement.

Get started with our template below!

When Should You Use a Commission Agreement?

The commission agreement is commonly used by the employer and the employee or distributor. Hereby given a list of the circumstances under which a party shall use a commission agreement.

  • If an employer wishes to pay a new employee in whole or in part on commission, he shall present an agreement to set down both the parties' rights.
  • If a newly hired employee wants to ensure that all the stated terms should be preserved and followed and the employer hasn’t provided a written commission contract, the employee shall provide the same.
  • When the manufacturer or a company wants to sell the company’s products or services for a predetermined commission, a commission agreement comes as handy to mutually agree to all the terms and conditions.

The agreement proves to be beneficial for both parties as it formally declares the details of the working relationship. Employees can benefit from any fraud or misguided activity or any misunderstanding related to work or commission to be paid.

On the other hand, employers can use this agreement to protect their business from the loot or misrepresentation of its products.

What Are the Components of a Commission Agreement?

The parties need to adhere to the commission agreed to protect the sales commission law and order. So, it is crucial to include all the required components in this written agreement. Here is a list of things which shall be included in the agreement:

  • Contact Information: Both parties need to provide their basic details like first and last name, company’s name, address of the company, and the employee, and phone numbers. Everything should be verified with government proof.
  • Commission Structure: It is crucial to describe all the small details of the commission procedure in the template. The parties should agree on the terms like quotas, commission percentage, draws, supply schedule, or payout schedules.
  • Documentation: The parties shall be clear about which systems or documents the representative is using. The document could be company provided documentation or tools for recording, tracking, and submitting, sales. The employee uses company order forms, CRM, or other systems.
  • Non-compete Clause: The distributor or employee shall not represent the competing brand of the commissioned company while being an active representative of the employer.
  • Non-disclosure Clause: The distributor shall keep complete confidentiality of all the information and intellectual property presented in the agreement or discussed with the employer in person. It includes disclosing any information deemed sensitive or critical to any third party.
  • Acceptance: Both parties need to sign this commission agreement to acknowledge that they agree to adhere to all the written clauses in it. However, if any one person defies any term, he is liable to pay the predetermined compensation.
Download a Free Commission Agreement Now!

Since our commission agreement is legally binding, it can help you build a professional commission relationship with your clients. Our easy to understand commission agreement is structured to include all important clauses, such as the non-disclosure clause and verified contact information. Before you start working with a new supplier or distributor, make sure you download and sign a commission agreement.

Get started with our template below!


Commission agreement is mutually agreed to protect the rights of both the parties involved. However, the party can create its agreement with the help of a commission agreement.

It is advisable to seek legal representation to check whether the final agreement is underemployment laws or not. In case of breach of the agreement, the other party member is liable to earn the predetermined compensation or any other said settlement.

To know more about the commission agreement, get in touch with CocoSign. Here, everyone can download various agreement templates they are looking for. CocoSign has a wide range of agreement templates that are made by experts adhering to current laws.




-          This Commission Agreement (hereinafter referred to as the “Agreement”) is entered into on ________________ (the “Effective Date”), by and between ________________________, with an address of ________________ (hereinafter referred to as the “Principal”) and ________________ with an address of ________________ (hereinafter referred to as the “Agent”) (collectively referred to as the “Parties”).

-          Whereas, the Agent agrees not to pursue the selling of a competing product for any competitor during the term of this Agreement.


-          The Parties hereby agree that the Principal authorizes the Agent to sell ______________________________________________________________________________________________________________________________________________________ on behalf of the Principal and the Agent agrees to indemnify himself/herself as the authorized agent of the Principal for such sale.


-          The Parties agree that the prices of the product will be set by the Principal, that the Principal will obtain and provide the promotional materials (if any) for the Agent to use and to obtain sales, and the Principal will provide a Sales Agreement to the Agent for the Agent to use in the sale of the product.


-          This Agreement shall be effective on the date of signing this Agreement (hereinafter referred to as the “Effective Date”) and will end on ___________________________.

-          The term of this Agreement may be extended upon the provision of written consent from both Parties.


-          The Parties agree that the Agent will sell the product in the following geographical area/ territory _____________________________________________________ and will not sell the product anywhere else.


-          The Parties hereby agree that the Agent will be paid by the Principal by the following means ___________________________________________________________________________



-          Hereby, the Parties agree that this is a non-exclusive agreement and that the Parties are regarded as independent contractors.


-          All terms and conditions of this Agreement and any materials provided during the term of the Agreement must be kept confidential, unless the disclosure is required pursuant to process of law.

-          Disclosing or using this information for any purpose beyond the scope of this Agreement, or beyond the exceptions set forth above, is expressly forbidden without the prior consent of the Client.

-          This section will remain in full force even after the termination of this Agreement for a period of __________________________.


-          This Agreement may be terminated in the event that any of the following occurs:

  1. Immediately, in the event that one of the Parties breaches this Agreement.
  2. At any given time by providing written notice to the other party ________________ days prior to terminating the Agreement.
  3. Upon terminating this Agreement, the Agent will be required to return all the Principal’s products and/or any other content (if any) at his/her earliest convenience, but not beyond ________________ days.


-          The Parties agree and disclose that they are fully authorized to enter this Agreement. The performances and obligations of both Parties may not violate the rights of any third party or violate any other agreement made between them and/or any other organization, person, business or law/governmental regulation.


-          In the event that any provision of this Agreement is found to be void and unenforceable by a court of competent jurisdiction, then the remaining provisions will remain in force in accordance with the Parties’ intention.             


-          This Agreement shall be governed by and construed in accordance with the laws of ________________.


-          Any dispute or difference whatsoever arising out of, or in connection with, this Agreement shall be submitted to arbitration/mediation/negotiation (circle one) in accordance with, and subject to the laws of ________________.


-          The Parties agree that any amendments made to this Agreement must be in writing, where they must be signed by both Parties to this Agreement.

-          As such, any amendments made by the Parties will be applied to this Agreement.


-          The Parties hereby agree not to assign any of the responsibilities in this Agreement to a third party, unless such is consented to by both Parties in writing.


-          This Agreement contains the entire agreement and understanding among the Parties hereto with respect to the subject matter hereof, and supersedes all prior agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms hereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof.


-          The Parties hereby agree to the terms and conditions set forth in this Agreement and such is demonstrated by their signatures below:










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