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Create a professional agreement between a company and sales agent, with or without an indemnity clause.
Use this Commission Agreement to outline how an agent earns commissions for generating sales, leads, or business opportunities. Choose your state-specific version and whether to include an optional indemnity clause, which protects the company from liability for the agent's actions. Both formats are attorney-reviewed and instantly downloadable in Microsoft Word and PDF.
Defines commission terms, duties, and termination. Best for trusted agents and low-risk transactions.
Includes all standard terms plus indemnification clause protecting the company from liability for the agent's actions.
| Feature | Standard | With Indemnity |
|---|---|---|
| Liability allocation | — | Agent indemnifies company for agent's acts/omissions |
| Recommended for | Trusted agents, low-risk | New relationships, regulated, higher-risk |
| Third-party interactions | Optional | Expected |
| Admin overhead | Lower | Slightly higher (notices/counsel selection) |
| Price | $9.99 | $9.99 |
These agreements are often used by businesses in real estate, insurance, financial services, manufacturing, marketing, and independent sales arrangements. They cover both one-time projects and ongoing agency relationships.
Choose the indemnity version if the agent will interact with customers or third parties, or when risk is harder to control. If your agent is speaking on behalf of your company, making representations, or handling sensitive matters, you want the protection that comes from having them contractually agree to defend and hold you harmless for their own mistakes or misconduct.
For trusted, low-risk agents (e.g., internal referral arrangements or established partners), the standard version is usually sufficient.
The standard version outlines commission rates, payment terms, duties, and termination provisions—all the basics you need for a typical sales agent arrangement.
The indemnity version includes all of those provisions plus an indemnification clause. This clause requires the agent to defend and compensate your company if the agent's actions or representations lead to lawsuits, claims, or damages. It shifts potential liability from you to the agent for their conduct.
Commission agreements are widespread in real estate (broker/agent splits), insurance (producer agreements), financial services (investment advisors, mortgage brokers), manufacturing (independent sales reps), pharmaceutical sales, and marketing/advertising (affiliate or referral programs). Any business that compensates someone based on results rather than hourly wages benefits from a clear commission agreement.
No. Commission agreements are typically used for independent contractors or agents, not W-2 employees. Independent contractors control how they do the work, use their own tools, and are responsible for their own taxes. If you're hiring someone as an employee, you need an employment agreement (and you must withhold taxes, provide benefits per law, etc.). Misclassifying workers can lead to IRS penalties, so consult an attorney or accountant if you're unsure.
Commissions can be calculated many ways: percentage of sale price, flat fee per transaction, tiered rates (higher % at higher volume), or net revenue after returns/discounts. Your agreement should clearly define the calculation method, when commissions are "earned" (at sale, at payment, or after a return period), and when they're paid (monthly, quarterly, etc.). The more specific, the fewer disputes you'll have.
Yes, but both parties must agree in writing. It's common to adjust commission rates, add new products, or refine territory definitions as your business grows. Any changes should be documented in a written amendment signed by both the company and the agent. Verbal changes are hard to enforce and lead to confusion.
Most commission agreements allow either party to terminate with written notice (commonly 30 days). The agreement should specify what happens to pending commissions —whether the agent gets paid for deals closed before termination, or only for deals where payment is received before the termination date. It's also wise to include a clause prohibiting the agent from soliciting your customers for a set period after termination (non-solicitation).
Yes. Some states have specific requirements about commission payment timing, written agreements for certain industries (e.g., California requires written commission agreements for some sales roles), and rules about deductions or chargebacks. That's why we provide state-specific templates —they're drafted to comply with your state's labor and contract laws. Always select your state to ensure compliance.