The Sales Commission Contract serves as a crucial legal framework for businesses operating in Indonesia that engage sales representatives or agents on a commission basis. This document is essential when companies want to establish clear, legally compliant commission-based relationships with their sales force, whether they are employees or independent contractors. It addresses key aspects required under Indonesian law, including commission structures, performance metrics, territory rights, and payment terms, while ensuring compliance with local labor regulations, particularly Law No. 13 of 2003 on Manpower and relevant commercial laws. The contract is designed to protect both the company's interests and the rights of sales representatives, providing clarity on earnings potential, performance expectations, and operational procedures while maintaining alignment with Indonesian legal requirements for commission-based work arrangements.
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1. Parties: Identification of the Company and the Sales Representative/Agent
2. Background: Context of the agreement and brief description of the business relationship
3. Definitions: Key terms used throughout the agreement including 'Commission', 'Sales', 'Territory', 'Products/Services'
4. Appointment and Scope: Formal appointment of sales representative and definition of their role
5. Term and Termination: Duration of the agreement and conditions for termination
6. Commission Structure: Basic commission rates, calculation methods, and payment terms
7. Sales Representative's Obligations: Key responsibilities, performance targets, and reporting requirements
8. Company's Obligations: Support, training, and resources provided by the company
9. Payment Terms: Timeline and method of commission payments, including handling of refunds/cancellations
10. Confidentiality: Protection of company information and trade secrets
11. Non-Competition and Non-Solicitation: Restrictions on competing activities during and after the agreement
12. Intellectual Property: Usage rights of company trademarks, materials, and IP
13. Dispute Resolution: Process for handling disagreements under Indonesian law
14. Governing Law: Specification of Indonesian law as governing law
1. International Sales: Include when sales representative may operate in multiple countries
2. Team Management: Include when representative may build and manage their own sales team
3. Product Training: Include for complex products requiring specific training
4. Expense Reimbursement: Include if company will reimburse certain sales expenses
5. Insurance Requirements: Include if specific insurance coverage is required
6. Marketing Support: Include if representative will receive marketing materials or support
7. Performance Bonuses: Include if additional incentives beyond basic commission are offered
8. Customer Data Protection: Include if representative will handle sensitive customer data
1. Schedule A - Commission Rates: Detailed breakdown of commission percentages for different products/services
2. Schedule B - Territory Definition: Specific geographical or customer segment boundaries
3. Schedule C - Sales Targets: Quarterly/annual sales targets and any related bonus structures
4. Schedule D - Approved Marketing Materials: List of materials representative is authorized to use
5. Schedule E - Reporting Templates: Standard forms for sales reporting and commission calculations
6. Schedule F - Product List: Current products/services covered by the agreement
7. Appendix 1 - Code of Conduct: Company's sales practices and ethical guidelines
8. Appendix 2 - Commission Calculation Examples: Practical examples of commission calculations
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