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A Commission Agreement is used when an individual or business, usually a salesperson, sells for or introduces clients to a third party. In return, they earn a commission for each sale or introduction made.
Generating sales by way of commission is a great way to earn extra income, but it’s crucial to ensure your rights are protected and your revenue streams are secure. That’s why you need a well-drafted contract to formalise the arrangement.
Why Do I Need A Commission Agreement?
Whether you are engaging an individual or a business to sell your products or services – or if you are the seller – having a Commission Agreement in place provides clarity on how commissions are calculated and clearly outlines the rights and obligations of all parties involved. This not only prevents misunderstandings but also helps maintain a professional working relationship.
What Is Included?
A comprehensive Commission Agreement will typically include clauses addressing the following:
- The parties’ rights
- The parties’ obligations
- Calculation of commission
- Audit rights to ensure commissions are properly paid
- Termination provisions
- Dispute resolution processes
In 2025, as digital sales channels continue to evolve and more businesses operate online, Commission Agreements have become even more essential. They not only clarify the method of commission calculation but also address modern challenges such as online payment processing and maintaining accurate audit trails. For further guidance on drafting effective commercial contracts, you might find our Contract Review and Redraft service invaluable, and our article on What Makes a Contract Legally Binding offers further insights into creating agreements that stand up in today’s dynamic market.
Need Help?
Contact our friendly team at team@sprintlaw.com.au or on 1800 730 617 to find out if a Commission Agreement is right for you. For additional support, explore our range of contract services, including our detailed Commission Agreement overview and other resources on how to protect your business interests.
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