Sales Subcontractor Agreement

Sales Subcontractor Agreement for the United Kingdom

Sales Subcontractor Agreement Template for England and Wales

A Sales Subcontractor Agreement is a legally binding contract governed by the laws of England and Wales, establishing the terms and conditions under which an independent sales agent or company provides sales services to a principal company. The agreement covers commission structures, performance targets, territorial rights, reporting requirements, and compliance obligations while ensuring clear distinction from employment relationships. It incorporates relevant provisions from UK commercial agency regulations and contractor legislation.

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What is a Sales Subcontractor Agreement?

The Sales Subcontractor Agreement is essential for businesses operating in England and Wales who wish to expand their sales capacity through independent contractors rather than employees. This document is particularly relevant when companies need flexible sales resources without the obligations of direct employment. The agreement defines the commercial relationship, protecting both parties' interests while ensuring compliance with UK agency and contractor regulations. It typically includes detailed provisions for commission structures, performance metrics, territorial rights, and termination conditions, while maintaining the subcontractor's independent status.

What sections should be included in a Sales Subcontractor Agreement?

1. 1. Parties: Identification and details of the contracting parties - the principal company and the sales subcontractor

2. 2. Background: Context of the agreement, including the principal's business and desire to engage subcontractor for sales activities

3. 3. Definitions: Key terms used throughout the agreement including Commission, Products, Territory, and Intellectual Property Rights

4. 4. Appointment and Scope: Terms of appointment, nature of relationship, and detailed scope of services to be provided

5. 5. Payment Terms: Compensation structure, commission calculations, payment schedule, and expenses policy

6. 6. Obligations of Subcontractor: Key responsibilities, performance standards, reporting requirements, and compliance obligations

7. 7. Principal's Obligations: Support, materials, and information to be provided by the principal company

8. 8. Intellectual Property: Ownership and usage rights of intellectual property, including marketing materials

9. 9. Confidentiality: Protection of confidential information and trade secrets

10. 10. Term and Termination: Duration of agreement, renewal terms, and grounds for termination

11. 11. Data Protection: Compliance with UK GDPR and Data Protection Act 2018

12. 12. Liability and Indemnification: Limitation of liability and indemnification obligations

What sections are optional to include in a Sales Subcontractor Agreement?

1. Non-Compete Provisions: Restrictions on competitive activities during and after the agreement term - include when protecting market position is crucial

2. International Sales Provisions: Additional terms for cross-border sales activities - include when subcontractor operates internationally

3. Training Requirements: Specific training obligations and certifications - include when specialized product knowledge is required

4. Insurance Requirements: Specific insurance coverage requirements - include when high-value products or services are involved

5. Compliance with Industry Standards: Specific industry regulatory requirements - include for regulated industries

What schedules should be included in a Sales Subcontractor Agreement?

1. Schedule 1 - Commission Structure: Detailed breakdown of commission rates, calculations, and payment terms

2. Schedule 2 - Territory: Defined geographical areas where subcontractor is authorized to operate

3. Schedule 3 - Products and Services: Comprehensive list of products/services covered by the agreement

4. Schedule 4 - Performance Metrics: Key Performance Indicators (KPIs) and targets

5. Schedule 5 - Reporting Requirements: Templates and schedules for required reports and documentation

Authors

Alex Denne

Head of Growth (Open Source Law) @ ��Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

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Free to use

Relevant legal definitions

Clauses

Relevant Industries

Technology
Manufacturing
Professional Services
Retail
Financial Services

Relevant Teams

Sales
Legal
Finance
Procurement
Operations

Relevant Roles

Sales Director
Commercial Director
Business Development Manager
Channel Manager
Procurement Manager

Industries

Commercial Agents Regulations 1993: Governs the relationship between commercial agents and their principals, including rights, duties, and compensation

Supply of Goods and Services Act 1982: Sets out implied terms in contracts for the supply of services, including requirement that services are carried out with reasonable care and skill

Contracts (Rights of Third Parties) Act 1999: Determines when third parties can enforce terms of a contract they are not directly party to

Unfair Contract Terms Act 1977: Regulates clauses that exclude or limit liability, ensuring they are reasonable and enforceable

Consumer Rights Act 2015: Relevant if subcontractor deals with consumers, setting out consumer rights and business obligations

Employment Rights Act 1996: Important for establishing clear contractor status and avoiding misclassification of employment relationship

IR35 Legislation: Tax legislation determining whether a contractor should be treated as an employee for tax purposes

Working Time Regulations 1998: Governs working hours, breaks, and holiday entitlements which may affect contractor arrangements

National Minimum Wage Act 1998: Ensures minimum payment requirements are met if applicable to the contractual relationship

Agency Workers Regulations 2010: Provides rights for agency workers, important for determining contractor status distinction

UK GDPR: Regulates the processing and handling of personal data, essential for data protection compliance

Data Protection Act 2018: UK's implementation of data protection requirements, working alongside UK GDPR

Competition Act 1998: Ensures agreement doesn't contain anti-competitive provisions or restrict market competition

Enterprise Act 2002: Provides framework for competition law and market regulation

Bribery Act 2010: Sets out anti-bribery requirements and compliance obligations

Health and Safety at Work Act 1974: Establishes basic health and safety requirements applicable to work activities

Management of Health and Safety at Work Regulations 1999: Details specific health and safety management requirements and risk assessments

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What is a Sales Subcontractor Agreement?

What sections should be included in a Sales Subcontractor Agreement?

What sections are optional to include in a Sales Subcontractor Agreement?

What schedules should be included in a Sales Subcontractor Agreement?

Authors

Alex Denne

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