Sales Agency Agreement

Sakshi Jain
Sakshi Jain at December 01, 2022

Sales Agency Agreement Overview

A Sales Agency agreement is a contract between a sales agent and a company. A sales agency agreement is necessary when a company hires a sales agency to promote and sell their goods and services on their behalf. The motive behind this sales agent agreement is to safeguard the interest of both the company and sales agency. It outlines the sale and payment terms as well as the duties of the sales agent. It is a legally binding contract that that can be used in the court of law for any disputes between the agent and the company.

Sales Agency Agreement Elements

Major elements of Sale Agency Agreement are as follows:

Appointment of Sales Agent

The sales agency agreement includes all the terms and condition related to the appointment of a sales agent. Such as an agent appointed cannot sell other company’s product in a particular geographical area or territory.

Payment Terms

This agreement also discloses all the payment related terms as sales agents are generally paid in the form of commission. In addition to this, the payment terms also specify the payment time of the date of the commission earned.


Terms of Sale

The term of sale include the following things:

  • Credit Approval: The credit term in the sales agency agreement shows the amount of credit that a sales agent can offer to a customer.
  • Collection: The collection clause shows whether the sales agent can collect payment from the customers or not.
  • Discount: The sales agency agreement also has discount clause according to which the sales agent can decide the amount of discount he/she can allow to the customers.

Duties & Obligations of Agent

The sale agency agreement also has some duties and obligation mentioned that shall be followed by the agent:

  • Annual Sales Quota: Annual sales quota in the sales agency agreement is nothing but the yearly minimum sales target that is set for the agent.
  • Promotion of the Products: The sales agency agreement also contains all the promotion techniques that can be adopted by the agent for the product sale.
  • Customer Service & Product Complaints: This agreement also provides the clause relating to the customer service and product complaints. This is to handle the customer’s query relating to the product and thus aiding to product success.

Duration and Termination of the Contract

The sales agency agreement also clearly states the terms and condition relating to the termination of the contract. In other words, the agreement shall show the contract duration. In addition to this, the sales agency agreement also mentions out the scenarios under which either of the parties can terminate the contract.

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