Why contracts matter
Handshake deals might feel friendly, but they leave you exposed. A proper sales agent contract protects both you and the principal by setting clear expectations about commissions, territories, obligations, and what happens if things go wrong.
Never start selling for a business without a written agreement in place.
Essential terms to include
Commission structure
This is the most important section. It should clearly state:
- The commission percentage or fixed amount per sale
- Whether commission is one time or recurring
- When commission is earned (at the point of sale, delivery, or payment)
- Payment terms (weekly, fortnightly, monthly)
- How commissions are calculated and reported
Territory and exclusivity
If you have been given an exclusive territory, the contract should define it precisely. Geographic boundaries, industry verticals, or named accounts should all be spelled out.
Non exclusive arrangements should also be documented so there are no surprises when another agent starts selling in your area.
Duration and termination
Include:
- The contract start date and duration
- Whether it auto renews
- Notice periods for termination (30 days is standard)
- What happens to your pipeline and pending commissions if the contract ends
Clawback provisions
Some contracts include clawback clauses that require you to return commissions if a customer cancels within a certain period. Understand these terms and negotiate them if they are unreasonable. A 30 to 90 day clawback is common, anything longer than that is worth questioning.
Non compete and non solicitation
Read these carefully. A non compete clause might restrict you from selling competing products during and after the contract. Make sure the restrictions are reasonable in scope and duration.
Intellectual property and confidentiality
You will likely have access to proprietary information about the principal's products, pricing, and customers. The contract should clarify what you can and cannot share or use.
Getting help
If you are unsure about a contract, spend the money on a brief legal review. A lawyer familiar with agency agreements can spot problematic clauses that you might miss.
On Zepys, standard terms are built into the platform's agreements, which provides a baseline of fairness for both agents and principals. But always read and understand anything you sign.