A commission agreement is a legal document that outlines the terms and conditions of a sales agent’s compensation for selling a product or service. In Malaysia, commission agreements are commonly used in various industries, including real estate, insurance, and marketing.

If you are a sales agent or an employer looking to create a commission agreement, it is crucial to understand the essential components that should be included in the document. Here is a sample of a commission agreement used in Malaysia:

Introduction

The introduction section of the agreement should provide a brief overview of the parties involved. This section should state the name of the sales agent and the employer’s name, their contact information, and a description of the product or service being sold.

Scope of Work

This section of the agreement should outline the responsibilities of the sales agent. It should state the services to be performed by the agent, the expected sales targets, and any specific requirements that the agent should meet.

Commission Structure

The commission structure outlines the payment terms for the sales agent. The agreement should detail the rate of commission, the frequency of payments, and how the commission is calculated. It is important to provide clear and concise language to avoid any confusion or misunderstandings.

Termination Clause

The termination clause outlines the conditions under which the agreement can be terminated. It should specify the grounds for termination and the notice period required before termination.

Confidentiality and Non-Disclosure

This section of the agreement outlines the obligations of the sales agent in protecting the employer’s confidential information. It should include non-disclosure agreements, confidentiality clauses, and any prohibitions on the use of confidential information.

Governing Law

The governing law clause specifies the law applicable to the agreement and any dispute resolution mechanisms. It is important to ensure that the governing law is in compliance with the legal requirements of Malaysia.

Conclusion

A commission agreement is an essential document that protects the interests of both the sales agent and the employer. When creating a commission agreement, it is essential to consider the specific requirements of your industry and ensure that the agreement is legally compliant. By following the essential components outlined in this article, you will have a comprehensive commission agreement that sets clear expectations and avoids any misunderstandings.