Free Sales Commission Agreement Template (2024 Sample)

A sales commission agreement covers what incentives you can offer sales representatives who come to work for you or your company. It is often used in addition to a base salary agreement because it provides details on how a salesperson receives a commission on each sale.

This sales commission agreement is entered into by and between [Employer.Company], “Employer," and [Representative.FirstName]​[Representative.LastName], “Representative.” The purpose of this agreement is to document the sales commission structure that will govern compensation for goods or services sold by the Representative on behalf of the Employer.  

The purpose of this sales commission agreement template is to establish a formal contract between a company and an individual, in which that individual is authorized to sell the company’s goods or services and agrees to be compensated according to the company’s sales commission policy. There’s always a chance that something happens beyond either party’s control that impacts the agreement. If this happens, work that is complete should be paid, but the remaining contract may be voided. The laws of your state may affect what is considered acceptable in voiding a contract‌.

This sales commission agreement serves as authorization for the Representative to sell goods or services on behalf of the Employer. These rights are non-transferable and non-exclusive. The Employer reserves the right to restrict the Representative’s rights, including geographic restrictions.

The Representative agrees to sell goods and services under the Employer’s brand. Goods or services may not be rebranded for any reason. The Representative agrees to abide by the Employer’s pricing policies. The Representative shall not offer discounts without the Employer’s written approval. 

This section outlines the permissions that the business gives to the sales rep. If the product is not sold according to the guidelines, then the commission can be reduced or removed. Any breach of the agreement may void the terms of your payment.

The Representative agrees to use company-provided and approved documentation and tools for recording, submitting, and tracking sales and opportunities. This includes the use of company order forms, CRM, and other systems as necessary. The Representative further agrees to avoid use of any documentation that has not been approved by the Employer for the purpose of this Sales Commission Agreement. 

If you expect your representatives to use certain branded documents, include them as part of the contract. If you expect documents to be shared with your business on a certain schedule, add that as well. You can list them in this section of the template, or attach blank versions of required documents at the end of the template.

The Representative acknowledges that over the duration of the Agreement, they may become familiar with confidential information regarding the Employer.

Therefore, during the term of this contract and for a period of (Number of years) years after the end of this Agreement, the Representative agrees that they will not, in any way, be involved in the operations of a business that is considered to be in competition with the Employer's current products and/or business.

Nothing in this Agreement will prevent the Representative from being a passive owner of any such businesses with the understanding that they will not, in any manner, participate in the operations of that business.