Outside Sales Commission Agreement Sample

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An outside sales commission agreement sample is a crucial document that outlines the terms and conditions between a company and its outside sales representatives. The agreement serves as a legally binding contract that specifies the commission rate, sales targets, payment terms, and other relevant clauses.

In this article, we`ll delve deeper into the components of an outside sales commission agreement sample and the importance of having one for your business.

Commission Rate

The commission rate is perhaps the most critical aspect of an outside sales commission agreement sample. It specifies the percentage of the sales that the sales representative will receive as their commission. The commission rate depends on various factors, such as the industry, product type, sales volume, and competition.

Sales Targets

The agreement should also outline the sales targets that the sales representative must meet to earn their commission. These targets could be based on sales volume, revenue generated, or the number of customers acquired, among others. The targets should be realistic and achievable, considering the market conditions and the company`s objectives.

Payment Terms

The agreement should also specify the payment terms, including when the sales representative will receive their commission and the payment method. Generally, commissions are paid out once the sales representative has met their sales targets and the customer has paid for the product or service.

Termination Clause

The agreement should also have a termination clause that outlines the conditions under which the agreement can be terminated, such as non-performance, breach of contract, or mutual agreement. The termination clause should also specify the notice period required for termination.

Confidentiality Clause

An outside sales commission agreement sample should also include a confidentiality clause that prohibits the sales representative from disclosing confidential information, such as trade secrets, customer data, or business operations, to third parties. This clause is essential to protect the company`s intellectual property and prevent competitors from gaining an unfair advantage.

The Importance of an Outside Sales Commission Agreement Sample

Having a well-crafted outside sales commission agreement sample is essential for several reasons. Firstly, it ensures that both the company and sales representative are on the same page regarding their expectations and obligations. Secondly, it provides a clear framework for resolving any disputes that may arise between the parties. Thirdly, it helps to protect the company`s financial interests by ensuring that sales representatives are only paid commissions for the sales they generate.


An outside sales commission agreement sample is an essential document for any company that relies on outside sales representatives to generate revenue. The agreement should be detailed, comprehensive, and cover all the critical aspects of the relationship between the company and sales representative. By having an outside sales commission agreement sample in place, companies can ensure that they are protected from financial losses and have a clear framework for managing their sales force.

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