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Commission Guarantee Agreement Template for Singapore

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Key Requirements PROMPT example:

Commission Guarantee Agreement

"Need a Commission Guarantee Agreement for our real estate agency in Singapore, where our parent company will guarantee commission payments to our top-performing agents who exceed S$2M in sales per quarter, effective from January 2025."

Document background
The Commission Guarantee Agreement serves as a risk mitigation tool in commercial relationships where commission payments are critical to business operations. This document, structured under Singapore law, becomes essential when parties seek additional security for commission-based transactions, particularly in high-value deals or where there's significant reliance on commission income. The agreement typically outlines the scope of the guarantee, trigger events, calculation methodologies, and enforcement mechanisms. It's particularly relevant in Singapore's business environment where commission-based arrangements are common in various sectors including real estate, financial services, and insurance. The agreement provides clarity on obligations and offers legal protection while ensuring compliance with Singapore's regulatory framework.
Suggested Sections

1. Parties: Identification and details of the guarantor and beneficiary

2. Background: Context of the commission arrangement and reason for guarantee

3. Definitions: Key terms used throughout the agreement

4. Guarantee Obligations: Scope and extent of the guarantee commitment

5. Commission Structure: Details of commission calculation and payment terms

6. Duration: Term of the guarantee agreement

7. Enforcement: Mechanisms for enforcing the guarantee

8. Governing Law: Specification of Singapore law as governing law

Optional Sections

1. Performance Conditions: Specific conditions that trigger commission payments - used when commission is performance-based

2. Security Provisions: Additional security measures - used when additional security is required

3. Assignment: Rights to assign the agreement - used when assignment rights are relevant

4. Force Majeure: Provisions for unforeseen circumstances - used for long-term or high-value guarantees

Suggested Schedules

1. Commission Calculation Schedule: Detailed methodology for calculating commissions

2. Performance Metrics: Specific targets or KPIs related to commission earning

3. Payment Schedule: Timing and method of commission payments

4. Form of Demand: Template for making claims under the guarantee

Authors

Alex Denne

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

Relevant legal definitions

























Clauses

























Industries

Contract Law (Chapter 53): Primary legislation governing contract formation, validity, terms, and enforcement in Singapore

Civil Law Act (Chapter 43): Fundamental legislation governing civil obligations and rights in Singapore

Unfair Contract Terms Act (Chapter 396): Regulates unfair terms in contracts and limits the extent to which civil liability can be excluded through contract terms

Employment Act (Chapter 91): Relevant if the commission agreement is employment-related, governing basic terms and working conditions

Employment Claims Act 2016: Provides framework for resolution of employment-related disputes, including commission-based compensation

Central Provident Fund Act: Governs mandatory social security savings system and may apply to commission-based earnings

Securities and Futures Act: Relevant for commission agreements in financial services sector and securities trading

Banking Act: Applicable for commission agreements related to banking services and products

Insurance Act: Governs commission structures and agreements in the insurance industry

Consumer Protection (Fair Trading) Act: Protects consumer interests and regulates fair trading practices

Consumer Protection (Trade Descriptions and Safety Requirements) Act: Ensures accurate trade descriptions and safety standards in commercial transactions

Real Estate Agents Act: Specific regulations for commission agreements in real estate transactions

Financial Advisers Act: Governs commission arrangements for financial advisory services

Mediation Act 2017: Framework for mediation as a dispute resolution mechanism

Arbitration Act: Governs domestic arbitration proceedings for dispute resolution

Singapore International Arbitration Act: Framework for international arbitration proceedings in Singapore

Limitation Act: Sets time limits for bringing legal claims related to contractual disputes

Electronic Transactions Act: Governs electronic contracts and digital signatures for online transactions

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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