The Sourcing Agent Agreement is a critical document used when a company (principal) wishes to engage a professional agent to identify, evaluate, and manage supplier relationships in specific markets or territories. This type of agreement is particularly important in the Canadian business context, where companies often seek to establish international supply chain relationships while ensuring compliance with Canadian federal and provincial regulations. The agreement typically includes detailed provisions for the agent's scope of authority, commission structures, reporting requirements, quality control procedures, and compliance with international trade laws. A well-structured Sourcing Agent Agreement helps protect both parties' interests while clearly defining responsibilities, performance expectations, and compensation terms. It's especially relevant for businesses expanding their supplier base or entering new markets where local expertise and representation are essential.
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1. Parties: Identification of the Principal and the Sourcing Agent, including full legal names and addresses
2. Background: Context of the agreement, including the Principal's business nature and need for sourcing services
3. Definitions: Key terms used throughout the agreement, including 'Territory', 'Products', 'Suppliers', etc.
4. Appointment and Scope: Formal appointment of the agent and detailed scope of sourcing services to be provided
5. Term and Termination: Duration of the agreement, renewal terms, and grounds for termination
6. Agent's Obligations: Detailed responsibilities including supplier identification, quality control, price negotiation, and reporting duties
7. Principal's Obligations: Responsibilities of the principal including information provision, support, and payment obligations
8. Commission Structure: Details of compensation, including commission rates, calculation methods, and payment terms
9. Reporting Requirements: Regular reporting obligations, documentation requirements, and communication protocols
10. Confidentiality: Protection of confidential information and trade secrets
11. Intellectual Property: Protection and ownership of IP rights related to the sourcing activities
12. Liability and Indemnification: Allocation of risks and responsibilities between parties
13. Force Majeure: Provisions for unforeseen circumstances affecting performance
14. Governing Law and Jurisdiction: Applicable law and dispute resolution mechanisms
15. General Provisions: Standard boilerplate clauses including notices, amendments, and assignment
1. Exclusivity: Defines whether the agent has exclusive rights in specific territories or for specific products
2. Performance Targets: Specific KPIs and performance metrics, used when quantifiable targets are required
3. Insurance Requirements: Specific insurance obligations for the agent, particularly relevant for high-value sourcing
4. Quality Control Procedures: Detailed quality assurance processes, important for manufacturing or specific industry requirements
5. Compliance with Trade Laws: Specific provisions regarding trade compliance, particularly relevant for cross-border sourcing
6. Sub-Agents: Terms governing the appointment and management of sub-agents if permitted
7. Training and Support: Details of training provided by principal to agent, relevant for technical products
8. Post-Termination Obligations: Specific duties and restrictions after agreement ends, important for protecting business interests
9. Currency and Exchange Rates: Specific provisions for handling multiple currencies, relevant for international sourcing
10. Ethical Sourcing Requirements: Specific ethical and sustainability requirements for supplier selection
1. Schedule A - Commission Structure: Detailed breakdown of commission rates, including any variations by product type or volume
2. Schedule B - Territory Definition: Specific geographical areas or markets covered by the agreement
3. Schedule C - Product Categories: List of products or services to be sourced under the agreement
4. Schedule D - Approved Suppliers: Initial list of approved suppliers, if any
5. Schedule E - Reporting Templates: Standard forms and formats for required reports
6. Schedule F - Quality Standards: Specific quality requirements and standards for sourced products
7. Schedule G - Service Level Requirements: Detailed performance metrics and service level expectations
8. Appendix 1 - Code of Conduct: Ethical business practices and compliance requirements
9. Appendix 2 - Due Diligence Checklist: Required supplier verification and assessment procedures
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