Commission Agreement Template

This Commission Agreement ("Agreement") is made and entered into on [Date], by and between:

1. Terms of Agreement:

• Start Date:
• End Date:

2. Job Description and Responsibilities: The Sales Representative agrees to perform the following duties and responsibilities:

• Job Description: [Detailed description of the job]
• Responsibilities:
• Generate sales leads
• Meet with potential clients
• Close sales
• Report sales activities to the Company
• Meet specified quotas

3. Relationship Clause: The Sales Representative is an [specify: employee, agent, independent contractor, etc.] of the Company. This relationship is defined as follows:

• Employee: The Sales Representative is an employee of the Company and is entitled to benefits as described in the Company’s employee handbook.
• Agent: The Sales Representative is an agent of the Company and will act on behalf of the Company in securing sales.
• Independent Contractor: The Sales Representative is an independent contractor and is not entitled to employee benefits. The Sales Representative will be responsible for paying all taxes arising from the payment of commissions and will not be entitled to any benefits that the Company provides to its employees.
• Rights and Obligations: [Describe the rights and obligations created by the relationship]

4. Compensation and Commission Rates: The Sales Representative will be compensated as follows:

• Base Salary: [Specify base salary if applicable]
• Commission Rate: The Sales Representative will earn a commission of [specify percentage]% on all sales generated.
• Bonuses: Additional bonuses may be awarded at the discretion of the Company based on performance.

5. Quotas: The Sales Representative must meet the following quotas to earn commission:

• Monthly Quota: [Specify monthly sales quota]
• Quarterly Quota: [Specify quarterly sales quota]
• Annual Quota: [Specify annual sales quota]

6. Methods of Calculating and Paying Commission:

• Calculation: Commissions will be calculated based on the net sales amount, excluding returns, discounts, and allowances.
• Payment: Commissions will be paid on the [specify day, e.g., last day] of each month for sales made during the previous month.

7. Clawback Clause: The Company reserves the right to retrieve some or all of the commission paid to the Sales Representative under the following circumstances:

• Returned Sales: If a sale is returned within [specify period, e.g., 90 days], the commission for that sale will be deducted from the Sales Representative’s next commission payment.
• Non-Payment by Client: If a client fails to pay for a sale within [specify period, e.g., 120 days], the commission for that sale will be deducted from the Sales Representative’s next commission payment.

8. Expenses: The following expenses will be included in the work duties:

• Travel Expenses: The Company [will/will not] reimburse travel expenses incurred by the Sales Representative.
• Marketing Materials: The Company [will/will not] provide marketing materials needed for sales activities.
• Office Supplies: The Sales Representative [is/is not] responsible for the cost of office supplies.

9. Insurance Requirements: The Sales Representative is required to maintain [specify type, e.g., liability insurance] insurance coverage. Proof of insurance must be provided to the Company upon request.

10. Confidentiality/Nondisclosure: The Sales Representative agrees to maintain the confidentiality of all non-public information disclosed by the Company during the term of this Agreement. This includes any business, technical, financial, or other information provided by the Company.

11. Amendments: This Agreement may be amended only by a written document signed by both parties. Any changes must be discussed and agreed upon by both parties before they take effect.

12. Termination:

• By Either Party: Either party may terminate this Agreement with [specify notice period, e.g., 30 days] written notice.
• For Cause: Either party may terminate this Agreement immediately if the other party breaches any material provision of this Agreement and fails to cure such breach within [specify period, e.g., 10 days] after receiving written notice of the breach.

13. Dispute Resolution: Any disputes arising under this Agreement shall be resolved through the following procedures:

• Negotiation: The parties will first attempt to resolve the dispute through informal negotiation.
• Mediation: If the dispute cannot be resolved through negotiation, the parties agree to attempt to resolve the dispute through mediation.
• Arbitration: If the dispute is not resolved through mediation, it will be submitted to binding arbitration under the rules of the [specify arbitration association, e.g., American Arbitration Association].
• Legal Remedies: The parties agree that the arbitrator's decision will be final and binding and may be entered as a judgment in any court of competent jurisdiction.

14. Signatures: By signing below, the parties agree to the terms and conditions outlined in this Commission Agreement.

This Agreement constitutes the entire agreement between the parties and supersedes all prior negotiations, representations, or agreements, whether written or oral. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.