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Commission Agreement for Malaysia

Commission Agreement Template for Malaysia

A legally binding agreement governed by Malaysian law that establishes the terms and conditions under which a commission agent or agency will provide services to a principal company in exchange for commission-based compensation. The document outlines commission rates, payment terms, performance expectations, territorial rights, and obligations of both parties while ensuring compliance with Malaysian commercial and contract law. It includes provisions for termination, confidentiality, and dispute resolution specific to the Malaysian legal framework.

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What is a Commission Agreement?

Commission Agreements are essential documents in Malaysian business relationships where compensation is tied to successful sales or business development activities. These agreements are commonly used when a company (the principal) wishes to engage external parties or individuals to promote their products or services on a commission basis. The Commission Agreement establishes clear parameters for the business relationship, including commission structures, payment terms, performance expectations, and territorial rights, while ensuring compliance with Malaysian legal requirements. This document is particularly important in sectors such as real estate, insurance, and sales, where commission-based compensation is standard practice. The agreement helps prevent disputes by clearly defining each party's rights and obligations, commission calculations, and payment terms.

What sections should be included in a Commission Agreement?

1. Parties: Identifies and provides full details of the principal and commission agent/agency

2. Background: Sets out the context of the agreement and the parties' intentions

3. Definitions: Defines key terms used throughout the agreement

4. Appointment and Scope: Establishes the agent's appointment and defines the territorial/product scope

5. Commission Structure: Details the commission rates, calculation methods, and qualifying criteria

6. Payment Terms: Specifies payment timing, method, and currency of commission payments

7. Agent's Obligations: Lists the duties and responsibilities of the commission agent

8. Principal's Obligations: Details the responsibilities and commitments of the principal

9. Term and Termination: Specifies the duration of the agreement and termination provisions

10. Confidentiality: Protects confidential information shared during the business relationship

11. Governing Law and Jurisdiction: Specifies Malaysian law as governing law and sets jurisdiction for disputes

12. General Provisions: Contains standard boilerplate clauses including notices, amendments, and severability

What sections are optional to include in a Commission Agreement?

1. Non-Compete: Restricts agent from representing competing principals - include when exclusivity is required

2. Performance Targets: Sets specific sales or performance goals - include when minimum performance levels are needed

3. Training and Support: Details principal's training obligations - include for complex products/services

4. Intellectual Property: Governs use of trademarks and IP - include when agent will use principal's IP

5. Insurance: Specifies required insurance coverage - include for high-value or high-risk activities

6. Data Protection: Addresses personal data handling - include when personal data processing is involved

7. Force Majeure: Covers unforeseeable circumstances - include for long-term or high-value agreements

8. Audit Rights: Allows principal to audit agent's records - include for complex commission structures

What schedules should be included in a Commission Agreement?

1. Commission Rates Schedule: Detailed breakdown of commission rates for different products/services

2. Territory Schedule: Detailed description of the geographical territory covered

3. Product Schedule: List of products/services covered by the agreement

4. Performance Metrics: Detailed KPIs and measurement criteria

5. Reporting Templates: Standard forms for sales reporting and commission calculations

6. Operating Procedures: Detailed procedures for order processing and customer handling

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

Jurisdiction

Malaysia

Publisher

Ƶ

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions






























Clauses






























Relevant Industries

Real Estate

Insurance

Financial Services

Retail

Manufacturing

Technology

Telecommunications

Automotive

Pharmaceutical

Consumer Goods

Relevant Teams

Legal

Sales

Business Development

Commercial

Compliance

Finance

Operations

Channel Management

Agency Relations

Relevant Roles

Sales Director

Business Development Manager

Commercial Director

Legal Counsel

Compliance Officer

Sales Operations Manager

Channel Manager

Agency Relations Manager

Chief Commercial Officer

Contracts Manager

Sales Representative

Regional Sales Manager

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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