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Sales Commission Agreement for New Zealand

Sales Commission Agreement Template for New Zealand

A Sales Commission Agreement is a legally binding contract governed by New Zealand law that establishes the terms and conditions under which a sales representative will sell products or services on behalf of a company in exchange for commission-based compensation. This document outlines the commission structure, payment terms, performance expectations, territorial rights, and obligations of both parties while ensuring compliance with New Zealand employment and commercial law requirements. It includes provisions for reporting, confidentiality, and termination conditions, providing a comprehensive framework for commission-based sales relationships.

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What is a Sales Commission Agreement?

The Sales Commission Agreement is essential for businesses operating in New Zealand that engage sales representatives on a commission basis. This document is used when a company wishes to formalize a relationship with sales personnel who will be compensated primarily or partially through commission-based earnings. It addresses key aspects such as commission rates, payment schedules, sales territories, and performance expectations while ensuring compliance with New Zealand's Employment Relations Act 2000, Contract and Commercial Law Act 2017, and relevant tax legislation. The agreement is particularly important for protecting both parties' interests, establishing clear performance metrics, and defining the scope of the sales relationship, whether the representative is an employee or independent contractor.

What sections should be included in a Sales Commission Agreement?

1. Parties: Identifies and provides full details of the principal company and the sales representative

2. Background: Sets out the context of the agreement, including the principal's business nature and desire to engage the sales representative

3. Definitions: Defines key terms used throughout the agreement, including 'Commission', 'Sales', 'Territory', 'Products/Services'

4. Appointment and Scope: Establishes the nature of appointment, whether exclusive or non-exclusive, and defines the territory or market segment

5. Term and Termination: Specifies the duration of the agreement and circumstances under which it can be terminated

6. Commission Structure: Details the commission rates, calculation methods, and payment terms

7. Payment Terms: Specifies when and how commissions will be paid, including any minimum thresholds

8. Sales Representative's Obligations: Lists the duties, responsibilities, and performance expectations of the sales representative

9. Principal's Obligations: Outlines the company's commitments, including support, training, and resources provided

10. Reporting and Records: Details the sales reporting requirements and record-keeping obligations

11. Intellectual Property: Protects the principal's IP and specifies authorized usage by the sales representative

12. Confidentiality: Protects confidential information of both parties

13. General Provisions: Contains standard legal clauses including governing law, dispute resolution, and entire agreement

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

1. Non-Compete Clause: Restricts the sales representative from working with competitors, used when protecting market position is crucial

2. Performance Targets: Sets specific sales targets and consequences for meeting/missing them, used when performance metrics are key to the relationship

3. Training Requirements: Details mandatory training programs, used when specific product knowledge or certification is required

4. Expense Reimbursement: Outlines terms for reimbursing sales-related expenses, used when the representative incurs significant expenses

5. Team Management: Includes provisions for managing sub-agents or team members, used when the representative may build a sales team

6. Insurance Requirements: Specifies required insurance coverage, used when the sales activities involve significant risks

7. Customer Relationship Management: Details requirements for using specific CRM systems, used when the principal has mandatory systems

8. Post-Termination Obligations: Specifies obligations after agreement ends, used when protecting customer relationships is crucial

What schedules should be included in a Sales Commission Agreement?

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

2. Schedule 2 - Territory Definition: Detailed description of the geographical territory or market segment assigned

3. Schedule 3 - Product/Service List: Comprehensive list of products/services the representative is authorized to sell

4. Schedule 4 - Sales Targets: Specific performance targets and measurement criteria

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

6. Appendix A - Company Policies: Relevant company policies that the sales representative must comply with

7. Appendix B - Training Requirements: Detailed training and certification requirements

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

New Zealand

Publisher

Ƶ

Document Type

Sales Contract

Sector

Sales

Cost

Free to use
Relevant legal definitions

























Clauses
































Relevant Industries

Retail

Real Estate

Financial Services

Insurance

Technology

Manufacturing

Pharmaceutical

Telecommunications

Professional Services

Automotive

Consumer Goods

Industrial Equipment

Software and SaaS

Medical Devices

Construction Materials

Relevant Teams

Sales

Legal

Human Resources

Finance

Operations

Compliance

Commercial

Business Development

Contract Administration

Compensation & Benefits

Relevant Roles

Sales Representative

Business Development Manager

Account Executive

Sales Director

Regional Sales Manager

Territory Manager

Commission Agent

Sales Consultant

Channel Partner Manager

Chief Sales Officer

VP of Sales

Independent Sales Agent

Sales Team Leader

Product Specialist

Business Development Representative

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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