Commission Guarantee Agreement Template for England and Wales

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Key Requirements PROMPT example:

Commission Guarantee Agreement

"I need a Commission Guarantee Agreement to secure commission payments for our network of sales agents in the UK, with a guarantee cap of £500,000 and quarterly commission payment dates starting from March 2025."

Document background
A Commission Guarantee Agreement is utilized when there's a need to secure commission payments in commercial relationships under English and Welsh law. This document is particularly relevant when companies engage agents, representatives, or intermediaries on a commission basis and want to provide payment security. The agreement typically includes details of the underlying commission arrangement, the scope of the guarantee, payment terms, and claim procedures. It's commonly used in situations where the beneficiary requires additional security for their commission earnings, especially in high-value transactions or long-term commercial relationships.
Suggested Sections

1. Parties: Identification of the guarantor, beneficiary, and principal obligor

2. Background: Context of the guarantee and underlying commission arrangement

3. Definitions: Key terms used throughout the agreement

4. Guarantee and Indemnity: Core guarantee provisions and indemnification terms

5. Scope of Guarantee: Extent and limitations of the guarantee coverage

6. Payment Terms: Conditions and timing of guarantee payments

7. Duration: Term of the guarantee and termination conditions

Optional Sections

1. Security Provisions: Additional security arrangements when extra security is required beyond the basic guarantee

2. Assignment Rights: Provisions governing the ability to transfer or assign rights under the guarantee

3. Currency Provisions: Specific provisions for handling multiple currencies in international transactions

Suggested Schedules

1. Schedule 1 - Commission Structure: Details of the commission arrangement being guaranteed

2. Schedule 2 - Claim Procedures: Process for making claims under the guarantee

3. Schedule 3 - Form of Demand: Standard form for making demands under the guarantee

4. Appendix A - Underlying Agreement: Copy or summary of the underlying commission agreement

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant Industries
Relevant Teams
Relevant Roles
Industries

Law of Property (Miscellaneous Provisions) Act 1989: Governs formal requirements for contracts, particularly Section 1 regarding written formalities

Financial Services and Markets Act 2000 (FSMA): Primary legislation governing financial services regulation in the UK, including requirements for financial guarantees

Financial Services and Markets Act 2000 (Regulated Activities) Order 2001: Specifies which activities require FCA authorization and regulation in relation to financial services

Statute of Frauds 1677: Historical legislation requiring guarantees to be made in writing and signed to be legally enforceable

Consumer Credit Act 1974: Regulates consumer credit agreements and related guarantees involving individual consumers

Late Payment of Commercial Debts (Interest) Act 1998: Governs interest payments on late commercial payments and compensation for late payment

Commercial Agents (Council Directive) Regulations 1993: Regulates the relationship between commercial agents and their principals, including commission arrangements

Companies Act 2006: Primary legislation governing company law in the UK, relevant when parties to the agreement are companies

Partnership Act 1890: Governs the rights and obligations of business partnerships in the UK

Unfair Contract Terms Act 1977: Regulates unfair terms in contracts and limits the extent to which liability can be excluded

Misrepresentation Act 1967: Provides remedies for misrepresentation in contract formation and execution

Limitation Act 1980: Sets time limits for bringing legal claims relating to contracts and guarantees

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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