Commission Only Contract Template for Canada

This document is a comprehensive commission-only contract template designed for use in Canadian jurisdictions, compliant with both federal and provincial employment standards. It establishes the terms and conditions for a commission-based working relationship, including detailed commission structures, performance expectations, payment terms, and legal obligations. The contract addresses key aspects of Canadian employment law, including worker classification, minimum wage requirements, and statutory deductions, while providing flexibility to accommodate various sales-oriented industries and roles.

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What is a Commission Only Contract?

This Commission Only Contract is specifically designed for use in Canadian business environments where compensation is entirely commission-based. The document is essential for businesses seeking to engage sales professionals, agents, or representatives on a commission-only basis while ensuring compliance with Canadian federal and provincial employment standards. It includes comprehensive provisions for commission calculations, payment schedules, performance metrics, and legal protections for both parties. The contract is particularly valuable for industries with commission-based sales models and can be customized to accommodate various commission structures while maintaining compliance with Canadian employment legislation, tax requirements, and worker classification standards.

What sections should be included in a Commission Only Contract?

1. Parties: Identification of the employer and commission-based worker, including full legal names and addresses

2. Background: Context of the agreement and nature of the commission-based relationship

3. Definitions: Key terms used throughout the agreement, including 'Commission', 'Sales', 'Gross Revenue', etc.

4. Engagement: Terms of engagement and confirmation of commission-only status

5. Commission Structure: Detailed explanation of commission rates, calculation methods, and qualifying sales

6. Payment Terms: Timing and method of commission payments, including any holdbacks or adjustments

7. Duties and Responsibilities: Specific duties, sales targets, and performance expectations

8. Term and Termination: Duration of the agreement and conditions for termination

9. Confidentiality: Protection of confidential information and trade secrets

10. Non-Solicitation: Restrictions on soliciting customers or employees

11. Independent Contractor Status: Clear statement of independent contractor relationship if applicable

12. General Provisions: Standard clauses including governing law, entire agreement, and amendments

What sections are optional to include in a Commission Only Contract?

1. Training and Support: Details of any training or support provided by the company, used when specific training programs exist

2. Expense Reimbursement: Terms for reimbursing business expenses, if applicable

3. Benefits: Any benefits provided despite commission-only status, included if benefits are offered

4. Non-Competition: Restrictions on competing activities, used when protecting market share is crucial

5. Territory Assignment: Definition of geographic or customer territory, used when territories are assigned

6. Intellectual Property: Ownership of IP created during engagement, used when IP creation is possible

7. Insurance Requirements: Required insurance coverage, used when contractor must maintain own insurance

8. Dispute Resolution: Specific procedures for resolving disputes, used when alternative dispute resolution is preferred

What schedules should be included in a Commission Only Contract?

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

2. Schedule B - Sales Targets: Specific sales targets and any corresponding bonus structures

3. Schedule C - Territory Map: Detailed map or description of assigned sales territory

4. Schedule D - Approved Expenses: List of reimbursable expenses and approval process

5. Schedule E - Reporting Requirements: Templates and requirements for sales reporting

6. Appendix 1 - Sales Process: Step-by-step sales process and compliance requirements

7. Appendix 2 - Commission Calculation Examples: Examples showing how commissions are calculated in various scenarios

Authors

Alex Denne

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

Jurisdiction

Canada

Publisher

Genie AI

Sector

Sales

Cost

Free to use

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