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Sales Commission Fee Agreements

Commission agreements are legally binding contracts between an employer and an employee or independent contractor for the money paid for the job done. This agreement benefits both the employer and the employee as it outlines the details of the work to be done by the employee and the parameters of their compensation. The terms included in a sales commission agreement typically define the employee’s commission percentages and salaries if any.

If your business pays sales agent commissions, then having a detailed commission fee agreement in place is essential for maintaining legal compliance and for avoiding disputes upon termination of employment. Such a document should outline your commission formula including:

  • When a commission is earned
  • When a commission is paid
  • Performance incentives, if any
  • Consequences of refunds, cancelled orders, or defaulted payments

Your sales commission agreement also needs to address who receives ongoing commissions from an original sale after the associated sales representative’s employment has been terminated.

At Halpern & Scrom, our firm prepares comprehensive commission agreements that include all the necessary legally required provisions. Don’t risk your business’s liability, get the protection you need with a properly drafted sales commission agreement.

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