An agency agreement template can be used when one party is to act as an agent, marketing or selling the products, goods, or services of another party (known as the “principal”). This is done in exchange for a retainer fee or commission payments — or sometimes both.
The agreement is also known as a commission agreement or a sales agent agreement.
Using a template is a fast and simple way to tailor the agreement to your circumstances. You might be dealing with a specific territory in which you will market or sell the goods or services for the duration of the contract. This can range from a city to a county, country, continent, or worldwide, depending on the nature of the agreement.
It’s down to the principal to decide on the territory, however as an agent, it’s a good idea to include this in your own agreement to ensure that your responsibilities are clear from the outset.
Your template should include the following:
Here are some tips for creating a solid agency agreement template:
When creating an agreement template, it’s important that you’re crystal clear on the working relationship. An agency agreement is not the same as an employment contract, so this must be made apparent throughout.
An employer/employee relationship comes with additional benefits. This will typically include workers' compensation, paid time off, and/or health care benefits.
An agency relationship, on the other hand, will not contain such benefits. These types of agreements will usually last for a shorter time period and have their own duties and responsibilities outlined in the contract.
Make sure you clarify this in order to avoid being treated as an employee of your client’s business without receiving any of the benefits.
Just as it’s important to define the working relationship, it’s also vital that you detail how and when you are paid.
It doesn’t matter if you’re operating under a fee structure or commission, or a mixture of both, you need to include this information so that you have recourse to enforce the agreement if your client does not pay on time, or at all.
Be precise with your language. Avoid ambiguity at all costs, especially when it comes to payment. Always use specific dates and amounts where possible.
It’s a good idea not to discuss and agree upon targets and expectations outside of the agency agreement. Get it in writing, and get it in the document you’ll both be signing.
Doing so will make for a far smoother working relationship; one where you can still be held accountable, but you don’t have to worry about the goalposts being moved at the last minute. It’s every sales agent’s worst nightmare — meeting their target only to have the client push back and insist the real target was much higher.
At the end of the day, an agency agreement template can help you outline the expectations of both parties before the relationship actually begins. And with an agreement in place, you’ll know that even if things do go wrong, both parties will be covered by important sections of the agreement, including dispute resolution and termination.
Follow these tips when creating your bespoke agency agreement template and you’ll enjoy a straightforward and happy client relationship.