Sample of Sales Commission Contract

If you`re an entrepreneur looking to hire a sales agent or representative, it`s important to have a sales commission contract in place. This document outlines the terms and conditions of the commission-based payment system, ensuring everyone is clear on what is expected.

The sales commission contract should include the following key elements to protect both parties:

1. Commission rates: State the percentage of sales commission that the sales agent will receive for each sale. It`s important to clarify whether the commission rate is based on net sales, gross sales, or profits.

2. Payment terms: Specify when payments will be made, whether it`s monthly, quarterly, or annually. It`s also important to state the method of payment, such as direct deposit or check.

3. Sales targets: Set specific sales targets that the sales agent is expected to achieve. This includes both revenue targets and volume targets.

4. Termination clause: Include a termination clause that outlines the circumstances under which the contract can be terminated by either party. This should include a notice period and the procedure for handing over any outstanding sales or payments.

5. Non-compete and non-solicitation clause: Protect your business interests by including clauses that prohibit the sales agent from competing with your business or soliciting your clients for a set period of time after the contract is terminated.

6. Confidentiality agreement: Protect your business`s confidential information by including a confidentiality clause that prohibits the sales agent from disclosing any confidential information, including customer lists, trade secrets, and marketing strategies.

Sample Sales Commission Contract:

[Company Name]



[Phone Number]



[Sales Agent Name]



[Phone Number]



This Sales Commission Contract (the “Contract”) is made and entered into on [DATE] by and between [Company Name] (the “Company”), and [Sales Agent Name] (the “Sales Agent”).

1. Commission Rates:

The Sales Agent shall receive a commission of [COMMISSION RATE] percent of the net sales made by the Sales Agent for [Company Name].

2. Payment Terms:

The Sales Agent shall be paid on a [PAYMENT TERM] basis. Payments shall be made via [PAYMENT METHOD], and will be made within [NUMBER] days of the end of each [PAYMENT TERM] period.

3. Sales Targets:

The Sales Agent agrees to achieve the following sales targets:




4. Termination Clause:

Either party may terminate this Contract by providing [NOTICE PERIOD] days written notice to the other party. In the event of termination, the Sales Agent shall be entitled to receive any outstanding payments for sales made prior to the termination date.

5. Non-Compete and Non-Solicitation Clause:

The Sales Agent agrees not to compete with [Company Name] within [NON-COMPETE PERIOD] days of the termination of this Contract. The Sales Agent also agrees not to solicit any clients of [Company Name] for a period of [NON-SOLICITATION PERIOD] days after the termination of this Contract.

6. Confidentiality Agreement:

The Sales Agent agrees to maintain the confidentiality of all confidential information received from [Company Name]. This includes but is not limited to customer lists, trade secrets, and marketing strategies.

IN WITNESS WHEREOF, the parties have executed this Contract on the date first above written.