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Agency Agreement

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Agency Agreement

[State]

WHEREAS, [Principal.Company.Name or Principal.FirstName Principal.LastName] (“Company”) makes available to its products and services (“Products and Services”) for sale to its customers. Information on the Products and Services is set out in Exhibit A.

WHEREAS, the Company desires to appoint [Agent.CompanyName or Agent.FirstName Agent.LastName] (“ Sales Agent”) as its exclusive sales agent to market and sell its Products and Services within a territory to be assigned to the Agent (“Sales Agent”) and the Agent desires to be appointed a Sales Agent of the Company.

WHEREAS the Company and the Sales Agent enter into this agreement for the purposes of reducing their arrangements into writing (“Agreement”).

IN CONSIDERATION of the mutual covenants and promises, the Client and the Vendor (individually, each a “Party” and collectively, the “Parties”) covenant and agree as follows. 

1. Appointment

1.1 The Company hereby appoints and engages the Sales Agent as its Sales Agent on an independent contractor basis pursuant to the terms and conditions of this Agreement to market, solicit and sell its Products and Services and to perform the following specific duties (“Duties”):

1.       [Duty 1]

2.       [Duty 2]

3.       [Duty 3] 

1.2 The Company may add to or change the duties of the Sales Agent at its discretion from time to time. 

1.3 The appointment of the Sales Agent by the Company shall be on an independent contractor basis and no provision in this Agreement shall be construed or deemed to create a relationship which could be construed as employer/employee, partnership, or joint venture between the Parties. The Parties are independent to one another without any reservation and for all purposes. 

1.4 The Company may change the range and availability of the Products and Services at its discretion.

2. Term of the Appointment 

The Company hereby appoints the Agent as the Sales Agent for a period of [Months] commencing from the execution date of this Agreement (“Term”). The Parties may extend the Term for additional periods subject to the mutual agreement.

3. Territory

3.1 The Sales Agent shall market, solicit and sell its Products and Services in the territory of [Territory Name] on an Exclusive basis (“Territory”). The Company may increase or reduce the Territory at its discretion by giving the Sales Agent written notice of [Days] days. If the Territory is reduced at any time, the Company shall have no obligation to compensate the Sales Agent in any way and the Sales Agent shall have no claim against the Company.

3.2 The Sales Agent shall not have any authority to market, solicit and sell the Products and Services outside the Territory. Any sales of the Products and Services outside the Territory shall be deemed to be a breach of contract by the Sales Agent. 

3.3 For the duration of the Term, the Company agrees that it shall not appoint another sales agent within the Territory.

4. Sales Commission

4.1   In consideration of performing the Duties and marketing, soliciting and selling the Products and Services in the Territory, the Company shall pay the Sales Agent a sales commission of [Percent %] based on the net price for the sale of the Products and Services received by the Company (“Sales Commission”).

4.2 The Sales Commission shall only be deemed to be earned by the Sales Agent at such time that the invoices issued by the Company are actually paid by customers.

4.3 The Sales Commission shall only be payable to the Agent after the sales proceeds are received into the Company’s accounts in clear funds and the Company shall pay the sales commissions [Enter Payment Terms of the Sales Commission].

4.4 Unless the Sales Agent has had prior contact with a potential customer which has been advised to the Company, the Sales Agent shall not be entitled to any Sales Commission on any online sales made by the Company to any customer located in the Territory.

5. Obligations of the Sales Agent

The Sales Agent shall have the following obligations pursuant this Agreement: a) to use its best efforts at all times in it duties; b) use all reasonable efforts to achieve sales targets; c) to regularly undertake marketing and sales campaigns; d) pay for all costs for marketing, soliciting and selling activities and all  administrative and office expenses; e) to attend trade shows and conventions related to the Products and Services; e) respond to all enquiries on a timely basis; f) assist the Company in collecting overdue accounts; g) keep the Company updated on all sales and local trends on a monthly basis; and h) to provide any available information on potential and projected sales on a quarterly basis.

6. Obligations of the Company

The Company shall have the following obligations pursuant this Agreement: a) to take reasonable steps to support the marketing and sales activities of the Sales Agent; b) to provide good quality Products and Services on a timely basis; c) to provide new Products and Services on a regular basis and provide information on them on a timely basis; and d) to support the Sales Agent with marketing and sales materials, product information, training, seminars and guidance on the Products and Services. 

7. Confidentiality

The Sales Agent shall be under a duty of confidentiality at all times during the Term and for a period of [Months] (“Restricted Period”) following termination of this Agreement. Except as required by law or by court order, the Sales Agent shall not disclose or make use of the confidential information and intellectual property of the Company for any reason.

8. Non- Competition, Non-Solicitation and Non-Circumvention  

8.1 Non- Competition.  

During the Restricted Period, the Sales Agent agrees: (a) not to work  for  any entity or business that is in competition with the Company; (b) not directly or indirectly engage or participate in any business activity that competes with the Business of the Company; (c) not to use or deal in any confidential information and intellectual property of the  Company  in anyway; and (d) that the restrictions stated in this Clause shall apply in [Define Geographic Area]

8.2 Non-Solicitation.  

During the Restricted Period, the Sales Agent agrees not to directly or indirectly: (a) solicit any business away from the Company  or induce, encourage or intimidate its customers to stop dealing with the Company; (b) supply, provide or license any products or services the  Company already offers or makes available to its customers or which it is working on or about to introduce to them; (c) solicit, induce or lure any employee, agent or contractor of the Company to terminate their employment or engagement with the Company; and (d) solicit, induce or lure any supplier of the  Company to stop supplying its products and services to the Company or to supply to a competitor or to the customers of the Company. 

8.3 Non-Circumvention.

During the Restricted Period, the Sales Agent agrees not to: (a)  contact or attempt contact, directly or indirectly, any parties related to the Company with the intent or purpose of circumventing any provision of this Agreement; and (b) attempt to solicit any confidential information and intellectual property from such persons or entities nor to use any other party to undertake such actions. 

8.4 The Parties agree that the intent of the provisions of Clause 8 is to allow the Company to protect its legitimate business interests and future business opportunities. The Sales Agent agrees that the terms of this Clause are fair and reasonable.

9. Termination

This Agreement may be terminated by the occurrence of any one or more of the following events:

9.1 The Parties having performed their respective duties and obligations to each other pursuant to this Agreement.

9.2 The Parties by mutual consent in writing agree to terminate this Agreement;

9.3 If either Party is adjudged insolvent or bankrupt or an involuntary petition is filed against a Party, or upon any assignment for the benefit of a Party's creditors, or upon the appointment of a receiver, liquidator, or trustee of any of a Party's assets, or upon the liquidation, dissolution or winding up of its business.

9.4 If either Party breaches any provision in this Agreement, and the breach is not rectified within [Days] days after notice in writing to the breaching Party, then the Other Party may deliver a second notice in writing to the breaching Party immediately terminating this Agreement. 

10. Indemnity and Limitation of Liability

10.1 The Sales Agent agrees to defend, indemnify and hold harmless the Company from and against any claim, damage, liability, loss, cost or expense (including reasonable attorney’s fees) from any party arising, directly or indirectly out of: a) a failure on the part of the Sales Agent to perform any of the obligations referenced in this Agreement; b) an inaccuracy or breach of any warranties, undertakings or representations made by the Sales Agent and shall extend to legal actions of whatever nature arising out of such actions; and c) of  any misrepresentation, negligence, false or malicious statements or other conduct of the Sales Agent.

10.2 The liability of the Company pursuant to this Agreement in all circumstances shall be limited to the Sales Commission earned by the Sales Agent. The Company shall not be liable to any party for indirect or consequential damages arising from any breach of contract.

11. Entire Agreement

This Agreement sets out the entire agreement and understanding between the Parties relating to the subject matter of this Agreement. There are no other conditions, promises, representations or undertakings between the Parties whether oral or written.

12. Severability

The Parties agree that if any provision of this Agreement becomes invalid or unenforceable for any reason: a) the offending provision shall be removed; and b) the remaining provisions of this Agreement shall be unaffected and continue to be valid and enforceable for all purposes.

13. Amendment

Any amendment to this Agreement must be mutually consented to by the Parties in writing.

14. Waivers

A waiver of a breach of any term of this Agreement or of a default by any Party shall not constitute or be deemed to be a waiver of any other breach or default that may already have occurred, or which may occur. Unless consideration has been received, any such waiver shall not prevent the Party making the waiver from subsequently requiring compliance with the waived obligation or default.

15. Delays, Indulgences and Omissions

A delay or indulgence or omission in exercising any right, power or remedy shall not be construed as a waiver.

16. Notices

Any notice pursuant to this Agreement shall be in writing and may be sent by: (a) regular mail to the other Party at the address stated in this Agreement and shall be effective 2 days from the date of dispatch; or (b) if permitted in the jurisdiction, by email or other means of written/printed/displayed digital means of communication and such notice shall be deemed to be effective 24 hours after dispatch.

17. Successors

The provisions of this Agreement shall be binding on and inure for the benefit of the Parties and their respective successors and assigns and legal representatives. 

18. Costs

The Parties agree that they shall each bear their own respective costs for the preparation and negotiation of this Agreement.

19. Force Majeure

The Parties shall not be liable to each other for any loss of damage that may arise out of a delay in the performance or non-performance of their respective obligations pursuant to the terms of this Agreement where the cause of the delay or non-performance is due to causes beyond the control of the Parties, including but limited to pandemic, epidemic, tempest, storm, flood, fire, sabotage, riots, civil unrest, acts and policies of any Federal or State government and/or their Agencies, power grid failure and Acts of God.

20. Applicable Law

The interpretation of this Agreement or any part of it shall be governed by and construed in accordance with the laws of the State of [State] and shall be subject to the exclusive jurisdiction of the federal and state courts located in [County], [State].

User Note:  In appointing a Sales Agent, the Company creates a fiduciary relationship with the person being appointed. The Company will authorize the Sales Agent to do certain acts on its behalf and to represent the Company in the designated territory. As such, it is important the Company performs appropriate background checks of the person being appointed. The Company should look beyond the results achieved by the results achieved in previous positions.

To avoid any misunderstanding and unnecessary problems, the Duties of the Sales Agent should be described in as much detail as possible.

For the Company, it is important that sales commissions only be paid out after sales proceeds have been collected. Clawing sales commissions can be difficult and could lead to conflict with Sales Agents which in turn can have effects on morale and sales. 

If the Company does online sales, this issue will need to be addressed. Will the Company pay sales commission for online sales made to persons located in the territory of a Sales Agent? A compromise would be to pay the sales commission where the Sales Agent has previously made known to the Company the potential customers already approached before those parties place an online order.

The User Note is intended for guidance only and does not in any way constitute legal advice and Users should treat it accordingly.

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