What is a Commission Agreement?

Use our blog below to craft a commission agreement.

This Commission Agreement is for use where one party (a provider of goods or services) (the”Client”) wishes to engage another to introduce suppliers or customers in order to generate more sales and increase their customer base. The introducer will earn a commission in return for his efforts.

An introducer differs from an agent as he does not do any selling of his Client’s products or services themselves, but rather will refer a potential customer on, either through simply informing him of the goods or services provided by the Client, or by actively passing contact details and so forth on to the Client. Once the introduction is made, the commission earner steps back and will have no further role in the relationship between the Client and the customer. The selling and supply remains the sole remit of the Client.

If you require an agreement which creates a principal–agent relationship, you should use one of the agency agreements available from the related document links below.

This Commission Agreement is designed for use where the Client does not have in mind any one particular customer to target, but rather is simply seeking to obtain new customers and widen its client base, or sell into a new market. If you require an agreement which is designed for the situation where the Client is targeting a specific customer or type of customer, you should use one of the Introducer Agreements, available from the related document links below.

Under this Commission Agreement the commission earner will receive a fee or commission for all transactions that occur between any customer introducer by him and the Client within a set period. This differs from the Refferal Fee Agreement, available from the related document links below, which instead provides for a fee to be earned only in respect of the first transaction between the Client and the introduced customer.

Should the introducer fail to introduce new custom, he will earn no commission. In this respect this is a no win – no fee type agreement.

This agreement has not been created in accordance with FSA rules or the Financial Services and Markets Act 2000, and as such makes no reference or commitment to abiding by them. This agreement therefore is unsuitable for the introduction of clients for financial services, such as insurance products or investment advice.

The Commission Agreement contains the following clauses:

1. Definitions and Interpretation
2. Appointment of Introducer
3. Introduction of Prospective Clients
4. Obligations of the Company
5. Fees and Payment
6. Relationship of the Parties
7. Non Competition
8. Confidentiality
9. Non Circumvention
10. Termination
11. Nature of Agreement
12. Notices & Service
13. Set Off
14. Jurisdiction

And Schedules:

Schedule 1: Commission Schedule
Schedule 2: Product Schedule

Optional phrases / clauses are enclosed in square brackets. These should be read carefully and selected so as to be compatible with one another. Unused options should be removed from the agreement.

This Commission Agreement is in open format. Either enter the requisite details in the highlighted fields or adjust the wording to suit your purposes.