The Sales Commission Contract is essential for businesses operating in the Philippines that engage sales representatives or agencies on a commission basis. This document is crucial when establishing formal relationships with sales personnel who will be compensated primarily or partially through sales commissions. It ensures compliance with Philippine labor laws, tax regulations, and commercial legislation while protecting both the company's and the sales representative's interests. The contract typically details commission rates, payment terms, sales territories, performance targets, and reporting requirements. It's particularly important in the Philippine context where specific regulations govern employment relationships and commission-based compensation structures. The document should be customized based on the industry, sales model, and specific arrangements between the parties while maintaining alignment with local legal requirements.
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1. Parties: Identification of the principal company and the sales agent/representative
2. Background: Context of the agreement and brief description of the business relationship
3. Definitions: Key terms used throughout the agreement
4. Appointment and Scope: Official appointment of the sales agent and definition of their sales territory/market
5. Commission Structure: Detailed explanation of commission rates, calculation methods, and qualifying sales
6. Payment Terms: Timeline and method of commission payments, including any conditions precedent
7. Sales Targets: Required minimum sales targets or quotas, if applicable
8. Duties and Responsibilities: Specific obligations of the sales agent and the company
9. Term and Termination: Duration of the agreement and conditions for termination
10. Confidentiality: Protection of confidential information and trade secrets
11. Non-Competition: Restrictions on competing activities during and after the agreement
12. Reporting Requirements: Sales reporting obligations and documentation requirements
13. Governing Law: Specification of Philippine law as governing law and jurisdiction
14. Dispute Resolution: Process for resolving disputes between parties
1. Training and Support: Details of training and support provided by the company, included when the company offers specific training programs
2. Expense Reimbursement: Terms for reimbursing business expenses, included when the company will cover certain expenses
3. Performance Review: Process for periodic performance evaluations, included for longer-term agreements
4. Insurance Requirements: Required insurance coverage, included when the agent needs specific insurance
5. Intellectual Property: Usage of company trademarks and materials, included when the agent will use company IP
6. Data Protection: Compliance with data privacy laws, included when handling personal customer data
7. Sub-agents: Rules regarding appointment of sub-agents, included when sub-agents are permitted
8. Post-Termination Obligations: Specific obligations after contract termination, included for complex relationships
1. Schedule A - Commission Rates: Detailed breakdown of commission rates for different products or services
2. Schedule B - Sales Territory: Detailed description or map of the assigned sales territory
3. Schedule C - Product List: List of products or services the agent is authorized to sell
4. Schedule D - Sales Targets: Specific sales targets and any associated bonus structures
5. Schedule E - Reporting Templates: Standard forms and templates for sales reporting
6. Appendix 1 - Code of Conduct: Company's code of conduct and ethical standards
7. Appendix 2 - Operating Procedures: Standard operating procedures for sales activities
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