A commission agreement is a contract between an employer and an employee or an independent contractor that outlines the terms of payment for sales or services. The agreement clearly defines the commission rate, the scope of work, and the pay structure. A well-drafted commission agreement can help prevent disputes and ensure that both parties are aware of their obligations.
Here`s an example of a commission agreement:
Agreement Date: [Date of agreement]
This commission agreement („Agreement“) is made and entered into on the date above by and between [Employer`s Name], with its principal place of business at [Address], („Employer“) and [Employee`s/Contractor`s Name], with a mailing address of [Address], („Employee/Contractor“).
Scope of Work: [Describe the services or products the employee/contractor will be selling]
Compensation:
1. Commission structure: The Employee/Contractor shall be entitled to a commission of [percentage] of the total sales price for all services/products sold during the term of this Agreement.
2. Timing of payment: The Employer agrees to pay the Employee/Contractor the agreed-upon commission on a [weekly/monthly/quarterly/annual] basis.
3. Limit on Commission: The Employee/Contractor shall not be entitled to any commission on services/products where payment has not been received by the Employer.
Term:
This Agreement shall commence on [Date] and shall continue until terminated by either party with [notice period] notice. Either party may terminate this Agreement at any time, with or without cause.
Confidentiality:
The Employee/Contractor agrees to hold all confidential information of the Employer in strict confidence and not disclose such information to any third party unless required by law.
Entire Agreement:
This Agreement constitutes the entire agreement between the parties and supersedes all prior understandings, whether written or oral, relating to the subject matter of this Agreement.
Governing Law:
This Agreement shall be governed by and construed in accordance with the laws of [State/Country], without regard to its conflicts of law provisions.
In witness whereof, the parties have executed this Agreement as of the date first above written.
[Employer`s Name]
By: ____________________________
[Employee`s/Contractor`s Name]
By: ____________________________
In conclusion, a commission agreement helps clarify the compensation structure for salespersons or independent contractors and promotes transparency between the parties involved. It is always a good idea to seek legal advice before drafting such agreements to ensure they are enforceable and fair to both parties.