The Commission Agreement serves as a crucial legal instrument in Nigerian business operations, establishing the framework for commission-based business relationships. This document is essential when a company (principal) wishes to engage an agent to sell products or services on their behalf in return for commission-based compensation. The agreement comprehensively covers commission structures, territorial rights, performance expectations, and compliance requirements under Nigerian law. It's particularly important given Nigeria's complex regulatory environment, including requirements under the Contract Act, Commercial Agency Regulations, and anti-corruption laws. The Commission Agreement should be used whenever engaging external sales representatives or agents to ensure clear terms, protect both parties' interests, and maintain compliance with local regulations.

1. Parties: Identification and details of the Principal and Commission Agent, including registration numbers and addresses

2. Background: Context of the agreement and brief description of the business relationship

3. Definitions: Definitions of key terms used throughout the agreement

4. Appointment and Scope: Terms of appointment and detailed scope of the commission agent's authority

5. Territory and Exclusivity: Geographical area of operation and whether the appointment is exclusive or non-exclusive

6. Commission Structure: Detailed explanation of commission rates, calculation methods, and payment terms

7. Rights and Obligations: Specific duties and responsibilities of both the Principal and Commission Agent

8. Performance Standards: Required performance levels and quality standards

9. Reporting Requirements: Regular reporting obligations and documentation requirements

10. Term and Termination: Duration of the agreement and circumstances for termination

11. Confidentiality: Protection of confidential information and trade secrets

12. Compliance with Laws: Obligations to comply with Nigerian laws, including anti-corruption and money laundering regulations

13. Dispute Resolution: Process for resolving disputes, including jurisdiction and applicable law

14. General Provisions: Standard boilerplate clauses including notices, amendments, and assignment