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Sales Agent Agreement for Malaysia

Sales Agent Agreement Template for Malaysia

A Sales Agent Agreement governed by Malaysian law that establishes and regulates the relationship between a principal company and its sales agent. This agreement defines the terms under which the agent will promote and sell the principal's products or services, including territory rights, commission structures, and performance expectations. The document incorporates provisions compliant with Malaysian legislation, including the Contracts Act 1950 and Commercial Law Act 1956, while addressing key aspects such as agent obligations, intellectual property protection, and termination conditions. It serves as a comprehensive framework for managing the principal-agent relationship within the Malaysian business context.

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What is a Sales Agent Agreement?

The Sales Agent Agreement is a crucial document for businesses looking to expand their sales reach through third-party representatives in Malaysia. This agreement is particularly important when a company (the principal) wishes to engage an individual or company (the agent) to promote and sell their products or services without establishing their own direct sales force. The document addresses key aspects required under Malaysian law, including the scope of authority, territorial rights, commission structures, and compliance requirements. It provides necessary protections for both parties while ensuring alignment with Malaysian legal frameworks, including the Contracts Act 1950 and Competition Act 2010. This type of agreement is essential for companies seeking to establish a formal, legally-compliant sales presence in Malaysian markets without the overhead of direct employment relationships.

What sections should be included in a Sales Agent Agreement?

1. Parties: Identification of the Principal and Sales Agent with full legal names and addresses

2. Background: Context of the agreement, nature of Principal's business, and purpose of engaging the Sales Agent

3. Definitions: Key terms used throughout the agreement including Products, Territory, Customers, Commission, etc.

4. Appointment and Territory: Formal appointment of agent and definition of geographical territory or market segment

5. Agent's Rights and Obligations: Detailed responsibilities, reporting requirements, and performance standards

6. Principal's Rights and Obligations: Support to be provided, training, marketing materials, and product information

7. Commission Structure: Calculation method, payment terms, and conditions for commission eligibility

8. Intellectual Property: Usage rights of Principal's trademarks, logos, and other IP by the Agent

9. Confidentiality: Protection of business secrets and confidential information

10. Term and Termination: Duration of agreement and grounds for termination

11. Post-Termination Obligations: Return of materials, ongoing confidentiality, and restriction provisions

12. General Provisions: Standard clauses including notices, governing law, and dispute resolution

What sections are optional to include in a Sales Agent Agreement?

1. Exclusivity: Used when the agent is granted exclusive rights in the territory

2. Performance Targets: Include when specific sales targets or KPIs are required

3. Sub-Agents: Required if the agent is permitted to appoint sub-agents

4. Training and Support: Detailed section when extensive training is provided

5. Insurance: Required when agent must maintain specific insurance coverage

6. Non-Competition: Used when restricting agent from representing competing products

7. Data Protection: Detailed section when significant customer data handling is involved

8. Marketing and Promotion: Include when agent has specific marketing responsibilities

What schedules should be included in a Sales Agent Agreement?

1. Schedule 1 - Products: List of products or services the agent is authorized to sell

2. Schedule 2 - Territory: Detailed description of geographical territory or market segment

3. Schedule 3 - Commission Structure: Detailed commission rates, calculation methods, and examples

4. Schedule 4 - Performance Targets: Specific sales targets and evaluation criteria

5. Schedule 5 - Reporting Templates: Standard forms for sales reports and customer information

6. Schedule 6 - Operating Procedures: Detailed procedures for order processing and customer handling

7. Appendix A - Marketing Guidelines: Guidelines for use of Principal's branding and marketing materials

8. Appendix B - Compliance Requirements: Specific regulatory and compliance requirements for the territory

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Malaysia

Document Type

Agency Agreement

Cost

Free to use

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