How To Use
This review list is provided to inform you about the document in question and assist you in its preparation.
- The Sales Rep Agreement is used only to appoint an independent sales rep. If you will hire a person as a full-time sales executive, see the Sales Employment Agreement.
- This Agreement, as written, provides for termination in 30 days. This is an important clause to protect the Company from having to retain an ineffective Rep. In addition the document provides for paying the Rep a percentage based on receipts, not a more complicated formula; provides for payment after receipt so the Company is not financing the Rep commission; and provides for only one back year of auditing to prevent a potential lawsuit from spiraling out of control. The venue for litigation is important and should always be in the Company’s home state.
- The rep is treated as an independent contractor in this Agreement, not as an employee, and this clause should be protected because the distinction is very important for the Company. This means the sales rep is not eligible to receive employee benefits and is responsible for his or her own income, social security, and Medicare taxes, among other things. Request the Rep fill out a W-9 IRS Form (one is on this Legal Forms CD), which provides for documentation of the Rep’s status. The IRS has a long history of allowing Reps to be independent contractors. This category has well-established precedents, unlike other categories, as long as the Rep is not based out of your corporate office. Even under these circumstances, a Rep can be treated as an independent contractor; but the “bar” is higher to meet the IRS’ standards.
- Although IRS rules do not vary state-to-state, state employment and contractor laws and rules do. Therefore, before using this document, you would be well advised to seek legal counsel about its appropriateness.
- Print two copies of the Sales Rep Agreement, one for each party. Both parties should sign each copy so that both can have an original copy. You are advised to keep an extra copy in a folder containing all Rep contracts.
Sales Rep Agreement
This Agreement (“Agreement”) is made and effective on by and between ______________________________ (“Rep”) and ___________________________________ (“Company”). In consideration of the mutual promises contained herein, the parties agree as follows:
As used herein, the following terms shall have the meanings set forth below:
A. “Products” shall mean the following of Company’s products to be sold by Rep:
B. “Territory” shall mean the following described geographic area and/or specific accounts:
Company hereby appoints Rep as its sales rep for the Products in the Territory, and Rep hereby accepts such appointment. Rep’s sole authority shall be to solicit orders for the Products in the Territory in accordance with the terms of this Agreement. Rep shall not have the authority to make any commitments whatsoever on behalf of Company, and be fully responsible for keeping his or her customers duly informed of this limit on Rep’s authority to make agreements on behalf of the Company with the customer.
If any term of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, then this Agreement, including all of the remaining terms, will remain in full force and effect as if such invalid or unenforceable term had never been included.
In Witness whereof, the parties have executed this Agreement as of the date first written above.