Commission Only Agreement Template for Philippines

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Key Requirements PROMPT example:

Commission Only Agreement

"I need a Commission Only Agreement for hiring independent real estate agents in Manila, with a tiered commission structure starting at 3% for residential properties and 5% for commercial properties, including non-compete restrictions for 12 months after termination."

Document background
The Commission Only Agreement is essential for businesses operating in the Philippines that engage independent sales representatives or agents compensated solely through commissions. This document is particularly relevant in sectors such as real estate, insurance, and retail sales, where commission-based compensation is common practice. The agreement must carefully balance the interests of both parties while ensuring compliance with Philippine labor laws, particularly regarding independent contractor classification and minimum compensation requirements. It typically includes detailed commission structures, performance metrics, territory assignments, and clear distinctions between employment and independent contractor relationships. This document is crucial for businesses looking to expand their sales force without direct employment obligations, while maintaining legal compliance with Philippine regulations governing commission-based work arrangements.
Suggested Sections

1. Parties: Identifies the principal/company and the commission agent/representative

2. Background: Explains the context of the agreement and the parties' intentions to enter into a commission-only arrangement

3. Definitions: Defines key terms used throughout the agreement, including 'Commission', 'Sales', 'Territory', etc.

4. Appointment and Scope: Establishes the agent's appointment, territory, and products/services covered

5. Independent Contractor Status: Clearly defines the relationship as independent contractor, not employment

6. Commission Structure: Details the commission rates, calculation methods, and qualifying sales

7. Payment Terms: Specifies payment frequency, method, and conditions for commission earnings

8. Performance Standards: Outlines expected performance metrics and sales targets

9. Term and Termination: Specifies agreement duration and grounds for termination

10. Obligations and Responsibilities: Lists specific duties and responsibilities of both parties

11. Confidentiality: Protects company's confidential information and trade secrets

12. Non-Competition and Non-Solicitation: Restricts competitive activities during and after the agreement

13. Dispute Resolution: Outlines process for resolving disputes under Philippine law

14. Governing Law: Specifies Philippine law as governing law and jurisdiction

Optional Sections

1. Training and Support: Include when company provides specific training or support systems

2. Marketing and Advertising: Add when agent has specific marketing responsibilities or restrictions

3. Expense Policy: Include if any business expenses are reimbursable

4. Insurance Requirements: Add when agent must maintain specific insurance coverage

5. Intellectual Property Rights: Include when agent will be creating or using IP

6. Data Protection: Add when agent will handle personal or sensitive customer data

7. Force Majeure: Include for protection against unforeseen circumstances

8. Assignment Rights: Add when transfer of rights needs to be addressed

9. Minimum Performance Guarantees: Include when specific sales targets are critical

Suggested Schedules

1. Schedule A - Commission Rates and Calculations: Detailed breakdown of commission rates, tiers, and calculation methods

2. Schedule B - Territory Definition: Detailed description of geographical or customer territory assigned

3. Schedule C - Product/Service List: Comprehensive list of products/services covered by the agreement

4. Schedule D - Performance Metrics: Detailed performance standards and evaluation criteria

5. Schedule E - Reporting Templates: Standard forms for sales reporting and commission calculations

6. Appendix 1 - Code of Conduct: Guidelines for professional behavior and ethical standards

7. Appendix 2 - Sales Procedures: Standard operating procedures for sales activities

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 | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries

Real Estate

Insurance

Financial Services

Retail

Telecommunications

Automobile Sales

Technology Solutions

Manufacturing

Direct Sales

Consumer Goods

Professional Services

Healthcare Products

Advertising

Travel and Tourism

Construction Materials

Relevant Teams

Sales

Business Development

Channel Management

Revenue Operations

Legal

Human Resources

Finance

Compliance

Operations

Contract Administration

Partner Relations

Commercial

Relevant Roles

Sales Representative

Business Development Manager

Real Estate Agent

Insurance Agent

Commission Sales Executive

Territory Sales Manager

Independent Sales Consultant

Channel Partner Manager

Sales Director

Account Executive

Regional Sales Manager

Direct Sales Representative

Marketing Representative

Product Specialist

Business Development Executive

Industries
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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