Free Independent Sales Rep Agreement Template
An independent sales representative agreement covering territory, commission, when commission is earned, post-termination commission and contractor status.
An independent sales rep agreement appoints a self-employed representative to sell products in a territory in exchange for commission. Many states have sales rep laws requiring written terms and prompt payment of commission after termination, with penalties for late payment.
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INDEPENDENT SALES REPRESENTATIVE AGREEMENT
This Agreement is made on [DATE] between [COMPANY NAME], [ADDRESS] ("Company"), and [REP NAME / BUSINESS], [ADDRESS] ("Representative").
1. APPOINTMENT. Company appoints Representative as its [exclusive / non-exclusive] independent sales representative for the products listed in Schedule A ("Products") in [TERRITORY] ("Territory") [for the following customer types: DESCRIBE].
2. HOUSE ACCOUNTS. The following accounts are excluded and handled by Company: [LIST OR "None"].
3. DUTIES. Representative will use reasonable efforts to promote and sell the Products in the Territory, forward orders to Company, and represent the Products accurately. Representative has no authority to bind Company or accept orders; Company may accept or reject orders in its discretion.
4. COMMISSION. Company will pay Representative [PERCENT]% of the net invoice price (excluding taxes, shipping, returns and credits) of Products sold to customers in the Territory [and on orders from the Territory, whether or not placed through Representative, if exclusive].
5. WHEN COMMISSION IS EARNED AND PAID. Commission is earned when [Company receives payment from the customer / the order is shipped]. Company will pay commission by the [15th] day of the month following the month in which it is earned, with a statement showing orders, invoices, payments and commission. Commission on amounts later refunded or credited may be deducted from future commissions.
6. POST-TERMINATION COMMISSION. After termination for any reason, Company will pay commission on all orders [accepted / received] before the termination date, when earned under Section 5, [and on orders from customers Representative procured that are received within [NUMBER] days after termination]. Company will comply with any applicable state sales representative law requiring payment within a set time after termination.
7. EXPENSES. Representative pays its own expenses unless Company agrees in writing to reimburse them.
8. INDEPENDENT CONTRACTOR. Representative is an independent contractor, controls its own methods, hours and staff, may represent non-competing lines, is responsible for its own taxes and will receive an IRS Form 1099. Nothing here creates employment, partnership or franchise.
9. MARKETING MATERIALS AND TRADEMARKS. Company grants Representative a limited, revocable right to use Company's name and trademarks solely to promote the Products. Representative will use only approved materials and make no claims beyond them.
10. COMPETING PRODUCTS. During this Agreement, Representative will not represent products that directly compete with the Products [listed in Schedule B] without Company's written consent.
11. CONFIDENTIALITY. Representative will keep Company's pricing, customer and business information confidential during and for [2] years after this Agreement.
12. TERM AND TERMINATION. This Agreement starts on [DATE] and continues until ended by either party on [30] days' written notice, or immediately for material breach not cured within [10] days after notice.
13. INDEMNITY AND LIABILITY. Company will indemnify Representative against product liability claims arising from the Products. Representative will indemnify Company against claims arising from Representative's unauthorised statements. Neither party is liable for indirect or consequential damages.
14. GOVERNING LAW. This Agreement is governed by the laws of [STATE].
GENERAL PROVISIONS
(a) Notices. Notices must be in writing and sent to the addresses or emails above (or as later updated by notice). Email notice is effective when sent, unless the sender receives a delivery failure message.
(b) Entire agreement. This agreement, with any schedules and exhibits, is the entire agreement between the parties on its subject and replaces all prior discussions and agreements on that subject.
(c) Amendments and waivers. Changes must be in writing and signed by both parties. A failure or delay in enforcing any term is not a waiver of it.
(d) Severability. If any provision is found unenforceable, it will be limited to the minimum extent necessary and the rest of this agreement will remain in effect.
(e) Assignment. Neither party may assign this agreement without the other party's written consent, except to a successor in a merger or sale of substantially all of its business, on notice.
(f) Relationship. Nothing in this agreement creates a partnership, joint venture or agency relationship unless expressly stated.
(g) Counterparts and electronic signatures. This agreement may be signed in counterparts and by electronic signature, each of which is an original and together form one agreement.
(h) Independent advice. Each party has had the opportunity to review this agreement with its own legal counsel and signs it voluntarily.
COMPANY: _____________________ Date: __________
REPRESENTATIVE: ______________ Date: __________
SCHEDULE A: Products and commission rates
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This free template is provided by ClauseAudit for general informational purposes and is not legal advice. Have it reviewed before use. Replace all [BRACKETED] placeholders.When to use this template
- A manufacturer or distributor appointing commission-only reps.
- A sales rep taking on a new product line.
- Clarifying commission after a rep relationship ends.
How to fill it in
- Define the territory, customer types and any house accounts.
- Set commission rate and base (net invoice price is common).
- Choose when commission is earned: on shipment or customer payment.
- Set post-termination commission terms and check your state's sales rep law.
- Keep the independent contractor terms consistent with how the rep actually works.
Key clauses to check
- When commission is earned
- Decides payment on long sales cycles and after termination.
- Post-termination commission
- The most common dispute; many states set deadlines and penalties.
- House accounts
- Exclude accounts the company handles directly.
- Independent contractor status
- Misclassification risk if the company controls hours and methods.
- Exclusivity
- Exclusive territories pay commission on all territory sales.
Frequently asked questions
Are sales reps entitled to commission after termination?
Often yes for orders procured before termination, and many states have laws requiring payment within a set time, with penalties for late payment.
Is an independent sales rep an employee?
Not if they genuinely control their own work and run their own business, but misclassification is judged by the reality of the relationship.
What is a house account?
A customer the company serves directly, excluded from the rep's commission.
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This free template is general information, not legal advice, and is no substitute for a qualified attorney. Laws vary by state; have it reviewed by a lawyer before you use or sign it.