A sales representative agreement is a legal contract that outlines specific requirements regarding the relationship between a sales representative and a company. If your business engages sales reps, you will need this type of document to govern your partnership. Writing a sales representative agreement is relatively simple. If you are looking for tips on how to write a sales representative agreement, see our step-by-step guide below.
Step 1: Introduction
The first step to writing a sales representative agreement is a thorough introduction. This is where you will identify the company and representative involved, which is especially important if you sourced the representative from any outsourcing companies. Additionally, you may want to include definitions regarding specific territory or products. The definitions section should include any terminology that will be used throughout the document. Once you have identified all terms and parties involved, you can move on to step two.
Step 2: Representative
Your next course of action should be to clearly outline the representative’s position. Firstly, you may want to specifically state that you are appointing a particular person to the position. Next, you can specify the scope of their authority within the company. Outlining their job description will be helpful in clarifying everything between both parties.
Step 3: Commission Rates
Another important section to include in any sales representative agreement is commission and payment. Here, you will specify what the commission rates are for various sales. Additionally, you can lay out the timeline and method of payment. It is essential to include this in the contract in order to prevent any monetary disputes later on.
Step 4: Intellectual Rights
The fourth step to writing a sales representative agreement is to protect your company’s intellectual rights like, for instance, any special sales forecasting strategies your business may use. This is where you can review copyright claims and intellectual property clauses. Secondly, you may also want to feature a non-disclosure agreement. This will prevent contractors or employees from sharing confidential information. If you want to be sure that your business’s information is protected, make sure that you add this to your contract.
Step 5: Termination
In order to ensure that both parties are on the same page regarding employment terms, make sure that you include a section about termination. Specifically, you will want to highlight information about how and why a sales representative may be dismissed. This will allow you to outline how much notice may be given, as well as what actions may lead to a dismissal from your business. The termination section is important for defining employee and representative expectations.
Step 6: Finalization
Finally, the last step of crafting a sales representative agreement is to finalize the information for business security purposes. In this section, you should include any provision you deem necessary, as well as any other related clauses. These clauses may include a severability clause, which allows a judge to void the agreement. Consider what extra steps you would like to take to protect your business and add the necessary information here.
Drafting a sales representative agreement is a simple process if you follow the correct guidelines. The most important aspects of this kind of legal document are all included above. By outlining the representative’s job description, payment terms and the termination process, you are helping to protect your company from potential disputes. Follow these steps above to write up a sales representative agreement for your business.
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