Agency Agreement Format
When someone sells on your behalf, the authority you give them must be precise. This agency agreement template defines the agent's territory, duties, commission, and limits of authority in clear terms.
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When and how to use this letter
Use this agreement when engaging a sales agent or representative who will find customers for you without being your employee. Sign it before the agent begins approaching your prospects.
Exchange signed PDFs by email, and keep a printed copy with your commercial records. If the agent will handle samples or marketing materials, list them in an annexure with their value.
Keep the language precise about authority. The single most important clause limits what the agent can promise customers: no discounts, no credit terms, no commitments without your written approval. An agent who over-promises creates contracts you never agreed to.
Include what to avoid: avoid exclusive agency unless the agent commits to demanding targets. Avoid paying commission on orders that are never paid for; this template rightly ties commission to the principal receiving payment. Never let the relationship run on verbal terms while the agent builds a customer base you cannot later access.
What happens next: the agent begins prospecting and submits monthly sales reports, and you pay commission on collected revenue. A practical tip: require the agent to log all customer contacts in a shared system from day one. If the relationship ends, your customer data stays with you, which is where the real long-term value lies.
Frequently asked questions
What is the difference between an agent and a distributor?
Can the agent offer discounts to close deals?
Is the agent entitled to commission after termination?
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