Commission Agreement

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A commission agreement is used when an individual or business sells for or introduces clients to any third party to receive any commission for the sale. Generating some sales through commission is an excellent way to earn some extra cash. Yet, the interested parties must make sure that their rights are protected and that their revenue streams are secured. This is why these people need a contract to formalize this agreement. Let us learn more about the important aspects of a commission agreement below.

Important Clauses in a Commission Agreement

A commission agreement can be different based on the specific region in the United States. However, it does include certain common clauses like:

Note: Check out this sample commission agreement for your reference.

Benefits of a Commission Agreement

A commission agreement offers several advantages for both the business and the sales representative. These include:

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Things to Keep in Mind When Working on a Commission Agreement

A particular business's commission plan always forms the foundation of the official commission agreement. Everyone wants the final contract to be efficient enough to cover all kinds of potential scenarios that could arise during the agreement's course.

That is why either party should keep the following things in mind when working on a properly drafted agreement:

Key Terms for Commission Agreements

Final Thoughts on Commission Agreements

A commission agreement always sets out the details of the specific amount to be paid by the particular business. It usually goes to their respective sales representatives. Everyone must have such a legal document in place that may further help protect the business from any kind of liability in the future. If that is not enough, the sales representative also benefits from the same agreement because they get their salaries and bonuses on time. However, everyone must follow caution when drafting the commission agreement to avoid missing out on things or making errors. An experienced attorney can surely help both parties with this particular document.

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ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.

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Elizabeth W.

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Elizabeth W.

Legal Counsel Free Consultation Minneapolis, MN 7 Yrs Experience Licensed in MA, RI Suffolk University Law School

Liz is an experienced insurance professional, having worked with carriers and brokers for over 10 years. She can review or draft a variety of commercial agreements and is here to help your business. Specialties include: Master Service Agreements, business process outsourcing, marketing and partnership agreements, broker agreements, business associate agreements, and NDAs.

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Principal Attorney Free Consultation Chicago, IL 14 Yrs Experience Licensed in IL DePaul University College of Law

My name is Ryenne Shaw and I help business owners build businesses that operate as assets instead of liabilities, increase in value over time and build wealth. My areas of expertise include corporate formation and business structure, contract law, employment/labor law, business risk and compliance and intellectual property. I also serve as outside general counsel to several businesses across various industries nationally. I spent most of my early legal career assisting C.E.O.s, General Counsel, and in-house legal counsel of both large and smaller corporations in minimizing liability, protecting business assets and maximizing profits. While working with many of these entities, I realized that smaller entities are often underserved. I saw that smaller business owners weren’t receiving the same level of legal support larger corporations relied upon to grow and sustain. I knew this was a major contributor to the ceiling that most small businesses hit before they’ve even scratched the surface of their potential. And I knew at that moment that all of this lack of knowledge and support was creating a huge wealth gap. After over ten years of legal experience, I started my law firm to provide the legal support small to mid-sized business owners and entrepreneurs need to grow and protect their brands, businesses, and assets. I have a passion for helping small to mid-sized businesses and startups grow into wealth-building assets by leveraging the same legal strategies large corporations have used for years to create real wealth. I enjoy connecting with my clients, learning about their visions and identifying ways to protect and maximize the reach, value and impact of their businesses. I am a strong legal writer with extensive litigation experience, including both federal and state (and administratively), which brings another element to every contract I prepare and the overall counsel and value I provide. Some of my recent projects include: - Negotiating & Drafting Commercial Lease Agreements - Drafting Trademark Licensing Agreements - Drafting Ambassador and Influencer Agreements - Drafting Collaboration Agreements - Drafting Service Agreements for service-providers, coaches and consultants - Drafting Master Service Agreements and SOWs - Drafting Terms of Service and Privacy Policies - Preparing policies and procedures for businesses in highly regulated industries - Drafting Employee Handbooks, Standard Operations and Procedures (SOPs) manuals, employment agreements - Creating Employer-employee infrastructure to ensure business compliance with employment and labor laws - Drafting Independent Contractor Agreements and Non-Disclosure/Non-Competition/Non-Solicitation Agreements - Conducting Federal Trademark Searches and filing trademark applications - Preparing Trademark Opinion Letters after conducting appropriate legal research - Drafting Letters of Opinion for Small Business Loans - Drafting and Responding to Cease and Desist Letters I service clients throughout the United States across a broad range of industries.