Outside Sales Commission Agreement Template for England and Wales

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Key Requirements PROMPT example:

Outside Sales Commission Agreement

"I need an Outside Sales Commission Agreement for my UK-based software company to engage an independent sales agent to sell our products in the Northern England region, with a 15% commission rate on all sales and quarterly performance targets starting from March 2025."

Document background
The Outside Sales Commission Agreement is essential for businesses in England and Wales engaging independent sales representatives. It establishes the framework for commission-based sales activities, defining the relationship between the principal company and the sales agent while ensuring compliance with UK commercial agency regulations. This document is particularly crucial for companies expanding their sales reach without adding direct employees, including detailed provisions for commission calculations, territory rights, performance metrics, and legal compliance requirements.
Suggested Sections

1. Parties: Identifies the contracting parties and their details

2. Background: Explains context and purpose of the agreement

3. Definitions: Defines key terms used throughout the agreement

4. Appointment and Scope: Defines the sales agent's role and territory

5. Commission Structure: Details calculation methods and rates

6. Payment Terms: Specifies when and how commission is paid

7. Obligations of the Agent: Lists agent's duties and responsibilities

8. Obligations of the Principal: Lists company's duties and responsibilities

9. Term and Termination: Duration and termination provisions

10. Governing Law: Specifies applicable law and jurisdiction

Optional Sections

1. Non-Compete Provisions: Restrictions on competitive activities - use when protecting business interests from competition

2. Training Requirements: Specific training obligations - use when product knowledge is crucial

3. Performance Targets: Specific sales targets and consequences - use when minimum performance standards are required

4. Intellectual Property: IP ownership and usage rights - use when agent will handle proprietary information

Suggested Schedules

1. Territory Description: Detailed definition of geographical sales area

2. Commission Rates: Detailed breakdown of commission structure and calculations

3. Product List: List of products/services covered by the agreement

4. Reporting Templates: Standard forms for sales reporting

5. Sales Targets: Specific performance metrics and goals

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

Clauses
Relevant Industries
Relevant Teams
Relevant Roles
Industries

Commercial Agents (Council Directive) Regulations 1993: Key regulation implementing EU Directive 86/653/EEC governing relationships between principals and self-employed commercial agents. Covers mandatory commission rights, termination provisions, and compensation/indemnity requirements.

Employment Rights Act 1996: Critical for defining the relationship between parties to avoid creating unintended employment rights. Essential for establishing and maintaining self-employed/independent contractor status.

National Minimum Wage Act 1998: Relevant if the arrangement could be interpreted as employment. Commission structure must ensure effective pay doesn't fall below minimum wage requirements.

The Bribery Act 2010: Anti-corruption legislation affecting commission structures and payments. Sets compliance requirements and prevents improper payments in sales relationships.

Data Protection Act 2018 (UK GDPR): Governs handling of customer data, sets data protection obligations, and establishes privacy requirements for all parties involved.

Competition Act 1998: Ensures commission structures don't create anti-competitive practices and regulates territory restrictions in sales agreements.

Consumer Protection from Unfair Trading Regulations 2008: Applicable when sales are to consumers, setting restrictions on sales practices and consumer protection requirements.

Limitation Act 1980: Establishes time limits for bringing claims, particularly relevant for commission payment disputes and contractual claims.

Sales of Goods Act 1979: Underlying sales regulations that may affect commission calculations and sales terms when dealing with goods.

Agency Workers Regulations 2010: May be relevant depending on the structure of the relationship between principal and agent, particularly regarding worker classification.

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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