Agency Sales Agreements

An agent may agree to sell products or services under an agency sales agreement.

An agency sales agreement is a contract between an owner and a sales representative, the agent, for the purpose of selling products or services within a specified territory. While the contracting parties may negotiate the terms of the agreement, generally, the agent agrees to work for commissions, pay her own expenses and work under a covenant not to compete clause.

Commissions

The agreement outlines the fee arrangement between owner and agent, usually in the form of commissions based on sales and when they are paid. The agreement may also define the fee arrangement when a sale is made outside the agent's territory and when a dispute develops over a commission.

Expenses

The agent is responsible for paying expenses incurred as a sales representative, unless agreed to otherwise by the parties. Expenses can include office supplies, health insurance, travel, mileage and cell phone usage.

Noncompete

Agency sales agreements usually contain a noncompete clause with the understanding that the agent agrees not to work for a competitor, directly or indirectly in any capacity, within a specified period of time after the agreement's termination date. Depending on the language, the scope of the noncompete clause also may be limited to the agent's territory.

References

• Biztree: Sales Agency Agreement
• Scribd: Agency Agreement
• Toolkit: Noncompete Agreements