The Split Sales Commission Agreement serves as a crucial document for businesses where multiple sales representatives frequently collaborate on sales transactions. This agreement is particularly important in the United States, where it must comply with both federal and state-specific commission and employment regulations. The document typically outlines commission calculation methods, payment schedules, and circumstances under which splits occur. It's designed to prevent disputes by clearly defining each party's role and share in the commission, while also addressing post-termination commission rights and territory overlaps.
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1. Parties: Identification of all parties involved in the commission split arrangement
2. Background: Context of the agreement and business relationship
3. Definitions: Key terms used throughout the agreement including commission, territory, customers, and products/services
4. Commission Structure: Detailed breakdown of how commissions will be split between parties
5. Payment Terms: Timing and method of commission payments, including calculation periods and payment schedules
6. Term and Termination: Duration of agreement and conditions for termination or modification
7. Governing Law: Applicable jurisdiction and legal framework governing the agreement
1. Non-Compete Clause: Restrictions on competitive activities during and after the agreement term
2. Confidentiality: Provisions for protecting sensitive business information shared between parties
3. Dispute Resolution: Procedures for handling disagreements and conflicts between parties
4. Territory Restrictions: Geographic limitations and boundaries for sales activities
1. Schedule A - Commission Rate Schedule: Detailed breakdown of commission percentages, tiers, and special conditions
2. Schedule B - Product/Service List: Comprehensive list of products or services covered under the agreement
3. Schedule C - Payment Calculation Examples: Sample calculations demonstrating how commissions will be split in various scenarios
4. Schedule D - Territory Map: Visual representation and description of assigned sales territories if applicable
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