Commercial Agency Agreement Template (US)
Updated on August 5, 2026
A commercial agency agreement appoints an independent sales agent or representative to solicit orders, introduce customers, or sometimes negotiate sales for a principal's products or services. It is not an advertising-agency contract, not a franchise agreement, and not a distributor agreement. The agent usually sells on commission without taking title to inventory; a distributor buys and resells for its own account.
This US template focuses on the issues Jotform's agency contract leaves dangerously open: territory, excluded accounts, pricing authority, who can sign customer contracts, commission calculation, chargebacks, customer ownership, post-termination commission, expense approval, product claims, brand use, indemnity, insurance, confidentiality, and records. It also flags that many states have sales-representative commission statutes with written-contract and payment rules.
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Commercial Agency Agreement
This Commercial Agency Agreement is made on between , of (the "Principal"), and , of (the "Agent").
1. Appointment
The Principal appoints the Agent on a non-exclusive basis to promote and solicit orders for the following products or services: in the following territory: .
Excluded accounts, house accounts, channels, products, or customers are: .
2. Authority
The Agent may solicit prospective orders only. No customer order, price, discount, warranty, credit term, return right, delivery commitment, or other customer obligation binds the Principal unless accepted in writing by the Principal.
3. Agent Duties
The Agent shall use commercially reasonable efforts to promote the products or services in the territory, maintain accurate customer records, follow approved sales materials, avoid misleading claims, and promptly deliver customer orders, inquiries, and complaints to the Principal.
4. Commission
The commission rate is . Commission is earned when: . Commission is payable , subject to the chargebacks and deductions described in this Agreement.
Allowed chargebacks, offsets, deductions, return adjustments, bad-debt treatment, taxes, and customer-nonpayment rules are: .
5. Commission Statements and Audit
With each commission payment, the Principal shall provide a statement showing covered customers or orders, invoice or order references, commission rate, commission amount, deductions, and payment date. The Agent may request reasonable backup records for disputed commissions.
6. Post-Termination Commission
After termination, the Agent remains entitled to earned but unpaid commission. The Agent is also entitled to commission on accepted orders from covered customers for days after termination if the order resulted primarily from the Agent's pre-termination efforts and is not excluded by this Agreement.
7. Expenses
Expense reimbursement is governed by the following rule: . The Agent is responsible for all other expenses unless the Principal approves them in writing.
8. Brand, Product Claims, and Compliance
The Agent may use the Principal's approved sales materials and marks only to perform this Agreement. The Agent may not make unauthorized warranties, product-compliance statements, pricing promises, credit commitments, delivery promises, or regulatory claims.
9. Independent Contractor
The Agent is an independent contractor and is responsible for its own taxes, permits, personnel, insurance, tools, and business expenses except as expressly stated. The Agent is not an employee, franchisee, distributor, partner, or joint venturer of the Principal.
10. Insurance and Indemnity
Insurance requirements are: . Each party shall indemnify the other for losses arising from that party's breach, negligence, willful misconduct, unauthorized promises, or violation of law.
11. Term and Termination
Either party may terminate this Agreement by giving days' written notice. The Principal may terminate immediately for fraud, unauthorized commitments, misuse of confidential information, brand misuse, unlawful conduct, or material breach.
12. General
This Agreement is governed by the law of . It is the entire agreement between the parties regarding the agency relationship and may be amended only in a writing signed by both parties.
Principal
Date:
Agent
Date:
Authority limits are the heart of the agency contract
A broad sentence saying the agent may negotiate and enter sales agreements for the principal is risky. It can let an independent representative make promises about price, delivery, warranties, credit, returns, exclusivity, service levels, or product compliance that the principal never approved. The contract should say whether the agent may only solicit orders, may negotiate within written guidelines, or may actually bind the principal.
This template makes authority a selector. If the agent is limited to soliciting orders, customer contracts become binding only when the principal accepts them. If the agent may negotiate, the agreement still requires approval for price changes, special warranties, credit terms, exclusive accounts, unusual returns, and customer contract forms. If the agent may sign, that authority must be specific and narrow.
Commission clauses should survive termination where earned
Commission disputes often happen after the relationship ends. The agent says an order was earned before termination; the principal says payment arrived later or the order was not accepted yet. State statutes may decide some of those questions if the contract is silent or one-sided. New York, for example, requires earned commissions to be paid within a short period after termination or after they become due, and California requires written terms for independent wholesale sales representatives, including rate, payment timing, territory, exceptions, and chargebacks.
This template defines when commission is earned, when it is payable, what deductions are allowed, what happens to pending orders, and how long a post-termination tail lasts for covered customers. That gives both sides a ledger they can audit instead of a vague promise to pay commission.
US pages must not import the EU commercial-agent regime
In the EU and UK, commercial-agent law often gives agents mandatory post-termination indemnity or compensation rights. That is a real localization issue for B3, but it is not the default US national rule. In the US, the main traps are state sales-representative statutes, wage-payment classification risk, product and advertising claims, commission timing, and ordinary contract remedies.
The US master therefore cites state statutes as examples and leaves governing-state details explicit. A California wholesale representative agreement needs the written terms required by the Independent Wholesale Sales Representatives Contractual Relations Act. A New York sales representative relationship needs attention to written-contract and termination-payment provisions. Other states have their own versions.
Clause-by-clause guide
- Appointment and relationship
- States that the agent is independent, not an employee, distributor, franchisee, or buyer-reseller.
- Territory and excluded accounts
- Defines the geographic market, channels, named accounts, house accounts, and exceptions where commission does or does not apply.
- Authority limits
- Specifies whether the agent may solicit only, negotiate under guidelines, or sign limited customer orders, and prevents unauthorized warranties or concessions.
- Commission and chargebacks
- Defines commission rate, earning event, payment timing, deductions, refunds, returns, bad debt, taxes, and customer nonpayment.
- Post-termination commission
- Handles pending orders and a limited tail for covered customers so commission does not disappear merely because payment arrives after termination.
- Records and audit
- Gives the agent enough order and payment information to verify commission without exposing unrelated company records.
- Brand and product claims
- Limits the agent to approved materials and prohibits unsupported product, compliance, warranty, or regulatory claims.
- Indemnity and insurance
- Allocates liability for unauthorized promises, product defects, customer claims, data misuse, and each party's own misconduct.
US compliance checklist
State sales-representative statutes can override or supplement the contract. Check the state where orders are solicited and where the principal operates.
Use a written contract for covered California wholesale sales representatives
California requires a written contract when a manufacturer, jobber, or distributor uses a nonemployee wholesale sales representative in California and pays commissions. The contract must include commission computation, payment timing, territory, exceptions, and chargebacks.
California Civil Code sections 1738.10-1738.17Pay earned commissions promptly after termination where state law requires it
New York requires earned commissions to be paid within five business days after termination or within five business days after they become due if not yet due at termination, with double damages and attorney-fee exposure for violations.
New York Labor Law section 191-cCheck independent-contractor classification
A sales agent can be independent, but the IRS looks at control and independence rather than the label. Avoid employee-style control if independent status is intended.
IRS - Topic 762Limit authority to make warranties, pricing promises, or credit terms
If the principal does not want to be bound by an agent's off-script customer promises, the agreement and sales materials should say exactly what the agent may and may not do.
Keep commission accountings
State statutes and good contract practice both support providing commission statements showing orders, customers, rates, returns, chargebacks, and payments.
How to use this commercial agency agreement
- Define the sales role. Choose whether the agent only solicits, negotiates under guidelines, or has limited signing authority.
- Set territory and accounts. List geography, channels, named accounts, excluded house accounts, and any customer ownership rules.
- Write commission mechanics. State rate, earning event, payment timing, chargebacks, return adjustments, and post-termination tail.
- Add product and brand controls. Attach approved sales materials and prohibit unauthorized warranties, discounts, compliance claims, and brand use.
- Check state commission statutes. Before signing, confirm whether the governing state or sales territory requires specific written terms or payment deadlines.
Frequently asked questions
Is a commercial agent the same as a distributor?
No. A commercial agent usually solicits or negotiates orders for the principal and earns commission. A distributor usually buys products and resells them for its own account, taking title and margin risk.
Can the agent sign customer contracts?
Only if the agreement gives that authority clearly. Many principals prefer agents to solicit orders only, with customer contracts becoming binding only after the principal accepts them.
What should a commission clause include?
It should state the rate, how commission is computed, when commission is earned, when it is paid, what deductions or chargebacks apply, what records support it, and what happens after termination.
Does an agent get commission after termination?
That depends on the contract and state law. A fair agreement usually pays earned commission and often gives a defined tail for orders from covered customers generated before termination.
Can a principal reserve house accounts?
Yes, but the accounts should be named or described clearly. Vague exclusions create disputes over whether the agent helped generate a customer and whether commission is owed.
Is this suitable for an advertising agency?
No. Advertising-agency agreements cover creative services, media buying, campaign strategy, deliverables, approvals, and IP in ads. This template is for sales representation or commercial product agency.
Do US sales agents have EU-style termination indemnity rights?
Not as a national default. Some US states protect sales representatives with written-contract, commission-payment, damages, or attorney-fee rules, but the EU/UK commercial-agent indemnity regime is a localization issue, not a US default.
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Disclaimer
This template and guide are provided for general information only and are not legal, tax, employment, franchise, antitrust, or regulatory advice. Sales-representative commission rules vary by state and product. Confirm current law before signing.
