make your free sales agency agreement

sales agency agreement

this agreement is made on the date of the last signature set out below.

between

1.  (the principal); and
2.  (the agent).

meanings

1. these words and phrases have defined meanings:

   agreement	this document including any amendments;
   effective date	;
   confidential information	all confidential information (however recorded or preserved) disclosed by either party to the other party concerning the disclosing party's a) business, affairs, customers, clients, suppliers, plans, intentions, or market opportunities; b) operations, processes, product information, know-how, designs, trade secrets or software; and c) any information developed under this agreement;
   commercial agents regulations	the commercial agents (council directive) regulations 1993;
   intellectual property	any patent, copyright, registered design, unregistered design right, trade mark or other industrial or intellectual property owned or used by the principal in the territory and any current applications for any patent, design or trade mark;
   minimum sales target	the minimum sales set out in schedule 3 or as the parties otherwise agree in writing;
   net price	the price for the products actually charged to the customer, excluding any (i) value added or other sales tax and (ii) transport, insurance charges and rebates, included in the price;
   products	the products described in schedule 1 of this agreement and any other products which the principal allows the agent to sell under this agreement;
   quarter	each period of three calendar months ending on march 31, june 30, september 30 or december 31;
   territory	the countries or areas specified in schedule 2;
   working day	any day other than a saturday, sunday or public holiday in england and wales;
   year	the period of 12 months from the effective date and each consecutive period of 12 months for the period of this agreement.

2. unless the context requires a different interpretation:
   1. all singular words include plural ones and vice versa;
   2. all references to paragraphs, sub-paragraphs, schedules or appendices are to the ones in the agreement;
   3. all references to a person include firms, companies, government entities, trusts and partnerships;
   4. the term 'including' does not exclude anything not listed;
   5. all references to statutory provisions include any changes to those provisions;
   6. no headings or sub-headings form part of the agreement.

basis of appointment

1. the principal appoints the agent as its non-exclusive agent to sell the products in the territory on the terms of this agreement and the agent accepts the appointment on these terms. the principal is entitled to appoint other agents, distributors or franchisees to sell the products in the territory.
2. the principal is entitled to sell the products directly to customers in the territory, rather than having to refer them to the agent.

duration of agreement

1. the agreement commences on the effective date and continues until either party serves a notice to end it as permitted under the agreement.

agent's obligations

1. the agent must:
   1. act conscientiously and in good faith, and follow all reasonable instructions to best promote and sell the products and not allow its own interests to conflict with its duties to the principal;
   2. use its best endeavours to promote and sell the products in the territory with all due care and diligence. the agent can negotiate and enter into contracts for the sale of the products in the name of, and on behalf of, the principal without prior reference to the principal;
   3. refer to itself as "an agent" of the principal in all dealings with the products and in any associated promotional material, vehicles and premises;
   4. maintain, at its own expense, appropriate premises, offices, stores, display and administration facilities and any vehicles and systems necessary to carry out its duties under this agreement;
   5. employ a sufficient number of suitably qualified, dedicated personnel to carry out its duties under this agreement, including attending trade exhibitions and other sales outlets which the principal considers appropriate, and making regular and frequent calls on customers or potential customers to promote and sell the products;
   6. attend regular meetings with the principal to discuss the marketing and selling of the products and the collection of debts from customers;
   7. on request, give the principal access to any books and records relevant to the agent's activities in the territory and send to the principal any information and documents concerning the agent's activities, including:
      1. the previous, current and anticipated volumes of sales;
      2. the state of the market;
      3. any complaints or after-sales enquiries;
      4. any leads outside the territory;
      5. up-to-date customer lists;
      6. any outstanding payments due from customers;
      7. any individual customer details; and
      8. any policy of insurance or claims.
   8. the agent must not actively market the products or solicit any orders outside the territory.
   9. to ensure business continuity, in the three months before the agreement ends, the principal can appoint a successor to the agent, introduce the successor to customers and potential customers and allow the successor to market itself as the principal's agent.
   10. except as may be authorised by the principal, the agent shall not in any way incur any liabilities on behalf of the principal or pledge the credit of the principal.
   11. the agent must not assign, transfer, charge or deal in any manner with the agreement or its rights under it, nor sub-contract or appoint sub-agents of any of its obligations under the agreement, without the prior written consent of the principal.

the principal's obligations

1. the principal must:
   1. act dutifully and in good faith in its relations with the agent;
   2. arrange, at its own expense, the delivery of stock to the agent's premises in such volumes as the principal decides and (subject to circumstances beyond the principal's control) replenish this stock as reasonably required by the agent;
   3. where appropriate, inform the agent within a reasonable time of any problems about being able to meets its obligations under any contract concluded by the agent;
   4. deal with any complaint, dispute or after-sales enquiry relating to the products raised by a customer in the territory; and
   5. reimburse the agent for everyday expenses, costs and charges incurred in performing this agreement to a maximum of £ per  against production by the agent of appropriate invoices and receipts in support. the agent must seek the principal's prior approval before incurring any expenses above the agreed limit.

minimum sales target

1. the parties can agree to amend the minimum sales target in schedule 3 at any time.
2. if the agent fails to achieve the minimum sales target, the principal can  end the agreement under the paragraph below (termination).

sales and marketing

1. the agent must sell the products at the principal's list prices provided by the principal and subject to any discounts or deductions the principal allows. the agent must:
   1. issue invoices to customers in a form approved by the principal and suitable for value added tax or other sales tax purposes; and
   2. do business only on the principal's terms and conditions, attached as schedule 4 of this agreement, as such may be updated from time to time.
2. unless the principal agrees otherwise, the agent can only make the representations, warranties or other promises about the products contained in the principal's literature and/or terms and conditions.
3. the principal and agent will agree any stock levels and target service volumes for the next quarter, so that the agent can meet orders and contracts from customers promptly. any products or other goods delivered to the agent remain the property of the principal.
4. the principal must give the agent reasonable notice of any changes in the prices of the products or of its intention to extend the range or discontinue any products.
5. the principal must, at its own cost, provide the agent with information on advertising and promotion and any materials, information and support reasonably needed for the agent to carry out its duties under this agreement. the agent must display advertising materials and other signs provided by the principal.
6. the principal is entitled to participate with the agent in fairs and exhibitions in the territory.

agent's commission and payment

1. in consideration of the obligations undertaken by the agent under this agreement, the principal will pay the agent commission equal to % of the net price of all products sold by the agent on behalf of the principal.
2. all sums payable under this agreement are exclusive of any value added tax or other applicable sales tax, which will be added to the sum in question. a vat invoice must be provided against any payment.
3. in order to meet its payment obligations and calculate the commission due, the agent must:
   1. collect and hold as a trustee in a separate bank account, all money due to the principal as a result of sales and account on demand to the principal for any interest earned on credit balances in that bank account;
   2. within 14 days after the end of each month, send the principal a statement showing (i) the aggregate net price of products sold by the agent on behalf of the principal during that month and (ii) any customs and excise duties paid by the agent on behalf of the principal that month (the agent's statement);
   3. if applicable, provide details of any expenses incurred and attach to the agent's statement all invoices and supporting documentation;
   4. remit to the principal in  a sum equal to the aggregate net price of products sold by the agent on behalf of the principal during that month, less any customs and excise duties, as specified in the agent's statement; and
   5. as soon as practicable after receipt of the principal's statement (defined below), issue a valid vat invoice to the principal for the commission due for that month.
4. in order to meet its payment obligations, the principal must, within 14 days of receiving the agent's statement (i) send the agent a statement showing the amount of commission due to the agent for that month (the principal's statement) and (ii) remit to the agent in  the commission and any expenses due.

compliance with laws, regulations and insurance

1. the principal warrants to the agent that the products will comply with any regulations in force in the territory at the date of this agreement.
2. the principal must maintain adequate product liability insurance for any products which it supplies and shall indemnify and hold harmless the agent against any costs, claims, expenses or losses incurred by the agent, arising out of claims made by customers or third parties in connection with the products sold, during the period of the agreement, in the territory.
3. the agent is responsible for obtaining any licences, registrations, permits or approvals necessary or advisable for the import, promotion, sale and supply of the products in the territory. the principal must provide the agent with reasonable assistance and support (including technical advice and information) to this end.
4. the agent must, at its own expense, insure and keep insured to its full replacement value the principal's property, which is at any time in the agent's possession, custody or control. the agent must maintain an adequate level of insurance in connection with its activities in the territory.
5. the agent and its employees and representatives, must comply with all applicable laws, statutes, regulations and codes relating to anti-bribery and anti-corruption, including the bribery act 2010.
6. the agent shall indemnify and hold harmless the principal against any costs, claims, expenses or losses incurred by the principal, as a result of the agent, its employees or representatives, breaching any law or other regulation, in force during the period of the agreement, in the territory or acting in default of a term of the agreement.

intellectual property

1. the agent acknowledges that the intellectual property in the products and the principal's business and goodwill are the principal's property.
2. the agent agrees that it:
   1. can only use the intellectual property for the purposes of, and during the term of, this agreement, and only as authorised by the principal. it must not do, or fail to do, or authorise anyone else to do, anything which could invalidate the intellectual property; and
   2. must not use its own, or any other trademarks, trade names or get-up which resemble those of the principal; nor alter, remove, or otherwise tamper with any trademarks, trade names or get-up which would be likely to confuse or mislead the public.
3. the agent must notify the principal as soon as it becomes aware of any actual, threatened or suspected infringement of the intellectual property.
4. the agent must, at the request and expense of the principal, take all steps during the period of this agreement as the principal reasonably requires to assist in maintaining and enforcing the intellectual property. this may include bringing or defending any court or other legal proceedings concerning intellectual property matters.

confidentiality

1. each party must at all times (i) keep confidential and not disclose to any person any confidential information and (ii) only use such confidential information for the purposes of performing its obligations under this agreement.
2. a party may disclose confidential information to its employees, officers, sub-contractors, representatives or advisers (permitted disclosees) who need to know such information for the purposes of carrying out the party's obligations under this agreement. the party disclosing confidential information on this basis shall ensure that the permitted disclosees comply with the provisions of this paragraph.

termination

1. the principal can terminate this agreement if the agent fails to achieve the minimum sales target set out in schedule 3 for any given period, in which case the principal must give written notice of termination to the agent within     of the end of the period in question.
2. without prejudice to any rights and remedies under this agreement or by statute, either party can terminate this agreement by giving the following written notice to the other party:
   1. one month for the first year;
   2. two months for the second year;
   3. three months for the third year; and
   4. three months if the agreement lasts longer than three years.
3. either party can terminate this agreement if the other party commits a material breach of the agreement and fails to remedy it within  days after being given written notice giving full particulars of the breach and requiring it to be remedied.
4. either party can terminate this agreement by written notice to the other if:
   1. that other party commits a material breach of the agreement which is not capable of remedy; or
   2. that other party is dissolved, ceases to conduct substantially all of its business or becomes unable to pay its debts as they fall due; or
   3. where that other party is a company, a receiver is appointed, of any of the property or assets of that other party; or
   4. that other party makes any voluntary arrangement with its creditors or, being a company, becomes subject to an administration order (within the meaning of the insolvency act 1986); or
   5. that other party, being an individual or firm, has a bankruptcy order made against it or, being a company, goes into liquidation; or
   6. there is a change of control of that other party (within the meaning of section 1124 of the corporation tax act 2010); or
   7. that other party, being an individual, dies or as a result of illness or incapacity becomes incapable of managing their own affairs; or
   8. that other party suspends or ceases, or threatens to suspend or cease, to carry on all or a substantial part of its business.
5. the agent can terminate this agreement if the principal stops producing or supplying the products.
6. termination of this agreement will not affect either party's accrued rights (including the rights of the agent to be paid) as at the date of termination.

consequences of termination

1. other than as set out in this agreement, neither party will have any further obligation to the other under this agreement upon termination.
2. unless regulation 18 of the commercial agents regulations applies, the agent will have the right to be indemnified as provided in regulation 17 of those regulations. the agent shall have no right to any compensation under those regulations on termination of this agreement.
3. on termination the agent must immediately stop:
   1. promoting, marketing or selling the products;
   2. describing itself as an agent of the principal; and
   3. using any trademarks, trade names and brand names of the principal (including on stationery, premises and vehicles).
4. the agent must, at its own expense within 30 days, return to the principal all stocks of the products (other than any for which it has accepted orders from customers before the date of termination), samples and any advertising, promotional or sales material in its possession. the agent must destroy any material as directed by the principal.

circumstances beyond the control of the parties

1. neither party will be liable for any failure or delay in performing an obligation (including a delivery delay or failure) resulting from any cause beyond its reasonable control, but it must as soon as reasonably practicable notify any unaffected party who can then suspend or terminate the obligations of the agreement on notice taking effect immediately on delivery.

entire agreement

1. the agreement contains the whole agreement between the parties relating to its subject matter and supersedes all prior discussions, arrangements or agreements that might have taken place about the agreement.

general

1. the contracts (rights of third parties) act 1999 does not apply to the agreement and no third party will have any right to enforce or rely on any provision of the agreement.
2. unless otherwise agreed, no delay, act or omission by a party in exercising any right or remedy will be deemed a waiver of that, or any other, right or remedy.
3. provisions which by their intent or terms are meant to survive the termination of the agreement will do so.
4. if any court or competent authority finds that any provision of the agreement (or part of any provision) is invalid, illegal or unenforceable, that provision or part-provision will, to the extent required, be deemed to be deleted, and the validity and enforceability of the other provisions of the agreement will not be affected.
5. unless specifically provided by the parties, nothing in the agreement will establish any partnership or joint venture between any of the parties, or mean that any party becomes the agent of another third party, nor does the agreement authorise any party to enter into any commitments for or on behalf of any other third party.
6. any notice (other than in legal proceedings) to be delivered under the agreement must be in writing and delivered by pre-paid first class post to or left by hand delivery at the registered address or place of business of the notified party, or sent by email to the other party's main business email address as notified to the sending party. notices:
   1. sent by post will be deemed to have been received, where posted from and to addresses in the united kingdom, on the second working day and where posted from or to addresses outside the united kingdom, on the tenth working day following the date of posting;
   2. delivered by hand will be deemed to have been received at the time the notice is left at the proper address;
   3. sent by email will be deemed to have been received on the next working day after sending.

governing law and jurisdiction

1. this agreement shall be governed by and interpreted according to the law of england and wales and all disputes arising under the agreement (including non-contractual disputes or claims) shall be subject to the exclusive jurisdiction of the english and welsh courts.

the parties have signed this agreement on the date(s) below: