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Outside Sales Commission Agreement Template for Canada

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Key Requirements PROMPT example:

Outside Sales Commission Agreement

"I need an Outside Sales Commission Agreement for our software company that includes strong IP protection clauses and a tiered commission structure based on subscription length, with the agreement starting January 1, 2025."

Document background
The Outside Sales Commission Agreement is essential for businesses operating in Canada that rely on independent sales representatives to market and sell their products or services. This document is specifically designed to comply with Canadian federal and provincial regulations while establishing a clear independent contractor relationship. It is typically used when a company wants to expand its sales reach without adding internal employees, providing a framework for commission-based compensation, territory rights, performance expectations, and operational procedures. The agreement helps prevent misclassification issues under employment law while protecting the company's interests through confidentiality and non-solicitation provisions. It's particularly important in industries where external sales forces are common and must be structured to comply with relevant provincial employment standards and federal tax requirements.
Suggested Sections

1. Parties: Identifies the contracting parties - the company and the sales representative

2. Background: Explains the context of the agreement and the parties' intention to enter into a sales commission relationship

3. Definitions: Defines key terms used throughout the agreement

4. Appointment and Status: Establishes the sales representative's appointment and confirms independent contractor status

5. Territory and Products: Defines the geographic territory and products/services the representative is authorized to sell

6. Commission Structure: Details the commission rates, calculation methods, and payment terms

7. Sales Representative's Obligations: Outlines the duties, responsibilities, and performance expectations

8. Company's Obligations: Specifies the company's responsibilities, including support, training, and resources

9. Term and Termination: Specifies the agreement duration and circumstances for termination

10. Confidentiality: Protects confidential information and trade secrets

11. Non-Solicitation: Prevents solicitation of customers and employees during and after the agreement

12. Reporting and Records: Requirements for sales reporting and record-keeping

13. General Provisions: Standard legal provisions including governing law, notices, and amendments

Optional Sections

1. Non-Competition: Restricts the representative from competing during and after the agreement - include when protecting market share is crucial

2. Intellectual Property: Addresses ownership and usage of IP - include when the representative will create or use significant IP

3. Insurance Requirements: Specifies required insurance coverage - include when representative's activities pose significant risks

4. Minimum Performance Standards: Sets specific sales targets or quotas - include when performance benchmarks are essential

5. Training and Support: Details specific training requirements - include when extensive product knowledge is required

6. Expense Reimbursement: Outlines reimbursable expenses - include when representative incurs significant business expenses

7. Sub-agents: Rules for appointing sub-agents - include when representatives may need to build teams

8. International Sales: Provisions for international transactions - include for cross-border sales activities

Suggested Schedules

1. Schedule A - Territory Description: Detailed description of the assigned sales territory with specific boundaries

2. Schedule B - Product List and Pricing: Comprehensive list of authorized products/services and their pricing structure

3. Schedule C - Commission Rates: Detailed commission structure, including any variations based on product type or volume

4. Schedule D - Sales Targets: Specific sales quotas and performance metrics

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

6. Schedule F - Company Policies: Relevant company policies that apply to sales representatives

7. Appendix 1 - Sales Process Guidelines: Step-by-step guide for sales procedures and best practices

8. Appendix 2 - Customer Service Standards: Required customer service levels and procedures

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 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

Manufacturing

Technology

Consumer Goods

Industrial Products

Professional Services

Telecommunications

Healthcare Products

Building Materials

Financial Services

Software and SaaS

Wholesale Distribution

Medical Devices

Agricultural Products

Automotive

Real Estate

Relevant Teams

Sales

Legal

Human Resources

Finance

Operations

Business Development

Contract Administration

Compliance

Tax

Risk Management

Relevant Roles

Sales Director

Chief Revenue Officer

Business Development Manager

Sales Operations Manager

Channel Manager

Regional Sales Manager

VP of Sales

Sales Representative

Account Executive

Territory Manager

Commercial Director

Sales Administrator

Contract Manager

Legal Counsel

HR Director

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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