Sales Representative Agreement

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You’ll need this if …

You're hiring a person or company to sell products or services.
The sales representative will be either an employee or a contractor.

Not sure what you need?    Let us help you decide.

What it is

To hire an employee or contractor Sales Representative.

A Sales Representative Agreement is the contract you have with someone hired to sell products or services. The person may be an independent contractor you hire. Sometimes the sales representative is an employee. The sales representative could even be another company. We’ll help you create the contract for whichever relationship you have with the sales representative.  Here are the main topics in a Sales Representative Agreement:

  • A clear description of the types of sales the person is hired to do
  • How pricing will be set for the products or services
  • Commission and any base pay
  • Geographical or territory limitations, if any
  • Exclusive vs non-exclusive sales services
  • Account management and customer onboarding
  • Sales and warranty support services the sales representative may also be hired to do
  • Using the company’s promotional materials and product or service information
  • Ownership of the products, services, and intellectual property
  • Confidentiality promises that each party may give
  • Any non-competition promises you want to include
  • Company procedures and policies that must be followed
  • Insurance requirements, if any
  • Limits on your liability and who will be responsible for any claims that come up

Who needs it

SaaS (software-as-a-service) companies and software providers
Suppliers, distributors, and retailers
Professionals and consultants
Service providers
Independent sales contractors or firms
... and other companies hiring someone to sell their products and services

When you need one

As soon as someone starts selling your products or services as your representative.

You should have a contract with your sales representative as soon as they start to sell products or services for you. If you’re the company, a sales representative can make a you legally responsible for customer contracts as soon as you give them the okay to represent you. If you’re the sales representative, as soon as you start selling a company’s products or services you could become responsible to the company’s customers for the things you sell. So, you want a contract in place to protect both parties, to say who takes on what risks, and to keep the sales relationship clear. A Sales Representative Agreement will help you have a good working relationship so you can focus on making sales.

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What's the difference between a Reseller Agreement and a Sales Representative Agreement?

They’re in the same family of legal documents, but there are some differences.

A Sales Representative Agreement is more commonly used with an individual, but can also be used with a company or firm providing sales services, and is a more general agreement that can apply to a variety of products and services.

A Reseller Agreement is used by firms that resell software licenses or access to a SaaS (software-as-a-service) platform, so they have some specific tech and software related terms.

Is a Sales Representative an employee or a contractor?

A Sales Representative can be either an employee you hire or a contractor or firm you retain under a contract. When you create your Sales Representative Agreement through Made It Legal, we’ll ask you which type of relationship you have and make sure your agreement works how you need it.

What's a non-competition clause?

A non-competition clause is a promise to not compete with another business. They’re not always easy to enforce, especially if the party agreeing to the non-competition clause wouldn’t easily be able to find employment or continue their business after agreeing to the clause. In short, the non-competition clause should be the minimum necessary to protect the party needing it. So, non-competition clauses are usually time-limited (e.g., 1 – 2 years), limited to a specific geographic area, and apply only to the business of the protected party.

What's a non-solicitation clause?

A non-solicitation clause is a promise to not hire the other party’s employees or contractors. It can also be a promise to not go after the party’s customers and clients. Non-solicitation clauses are generally easier to enforce than non-competition clauses, but are still normally limited to a time period, like one or two years for example.