Can an agreement be signed electronically?

Yes. Electronic signatures are legally effective under the ESIGN Act (15 U.S.C. §7001) and UETA where adopted, provided intent, consent, attribution, and record retention requirements are met.

When is notarization required?

Notarization is rarely required for sales rep agreements, but state law or specific transaction types may require acknowledgement; verify with state statutes or counsel when in doubt.

How to avoid commission disputes?

Define commission base, timing, and chargeback rules clearly, require periodic reporting, and include audit rights to reconcile payments and reduce post‑termination claims.

What tax forms are needed?

Collect a completed W-9 (U.S. person) or appropriate W-8 form for nonresidents; issue Form 1099-NEC by Jan 31 for qualifying independent contractors.

How to protect confidential information?

Include a narrowly tailored confidentiality clause, limit permitted disclosures, and specify duration; consider a separate non‑disclosure agreement for sensitive data.

Can a terminated rep claim commissions later?

It depends on the agreement language; include specific post‑termination commission rules and a survivability clause to limit unexpected future claims.

Electronic Signature
Templates
Sales
Sales Representation Agreement

Sales Representation Agreement

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

SALES REPRESENTATION AGREEMENT

Parties

This Sales Representation Agreement (the "Agreement") is entered into by and between:

Principal (Seller): Principal Billing/Address: Representative (Agent): Representative Billing/Address:

Recitals

WHEREAS, Principal manufactures or supplies the products and services listed in Exhibit A and desires to engage Representative to solicit orders for such products and services within the Territory; and WHEREAS, Representative desires to represent and promote Principal's products on the terms and conditions set forth herein.

Definitions

For purposes of this Agreement: (a) "Products" means the items and services described in Exhibit A; (b) "Territory" means ; (c) "Gross Sale" means the invoiced amount for Products sold to Customers procured by Representative before deductions; (d) "Net Sale" means Gross Sale less discounts, returns, taxes collected on behalf of taxing authorities, shipping charges, credits and refunds actually paid.

Appointment; Scope

Principal appoints Representative as its sales representative to market and solicit orders for Products in the Territory on the terms of this Agreement. Representative shall diligently promote the sale of Products and shall use commercially reasonable efforts to meet sales targets set by Principal in writing.

Exclusivity: Exclusive appointment within the Territory Non-exclusive appointment

Term and Termination

This Agreement commences on and continues for an initial term of unless earlier terminated as provided herein. Either party may terminate this Agreement without cause upon days' prior written notice. Principal may terminate immediately for Representative's material breach that is not cured within days after notice.

Duties of Representative

Representative shall: (a) solicit orders and present Product information accurately; (b) provide monthly written reports of leads, prospects and closed sales using Principal's required form; (c) comply with Principal's pricing and discount policies; (d) not make binding warranties on behalf of Principal; and (e) maintain accurate records of sales and customer contacts.

Sales Reporting; Records; Audit

Representative shall deliver reports to Principal no later than the day following the end of each calendar month, detailing all leads, quotations, orders received and sales consummated. Principal shall have the right, upon reasonable notice, to audit Representative's records related to sales and commissions once per twelve-month period.

Commission; Payment Terms

Principal shall pay Representative a commission equal to percent of Net Sales for Products sold to customers procured by Representative in the Territory, subject to the conditions below. Commissions shall be computed on actual collections received by Principal and paid within days after the month in which payment from the customer is received.

Late payments shall accrue interest at on overdue balances. Commissions shall not be payable on amounts refunded or credited to customers, unpaid invoices charged off, or sales made in violation of Principal's credit or return policies.

Payment method (select all applicable): Bank transfer Check Credit card

Products / Services Covered (Exhibit A)

The Products and Services covered by this Agreement are listed below. Principal may update Exhibit A on written notice to Representative.

Item	Description	Quantity	Unit Price	Commission Rate

Sales Transaction Record (for commission calculation)

Use the fields below to record an exemplary sale for commission calculations.

Item	Description	Quantity	Unit Price	Total

Subtotal: Taxes: Shipping / Handling: Total:

Delivery; Risk of Loss

Unless otherwise agreed in writing, Principal is responsible for delivery of Products to Customer and retains title and risk of loss until delivered to the carrier. Representative shall not assume responsibility for shipping, handling or warranty obligations unless expressly authorized in writing by Principal.

Warranty; Returns; Refunds

Principal warrants the Products to conform to Principal's published specifications at the time of sale. Representative makes no independent warranty. Returns and refunds will be handled in accordance with Principal's return policy; commissions on returned or refunded Products shall be deducted from future commission payments or recovered from Representative where permitted by law.

Confidentiality; Non-Solicitation

Representative shall keep confidential all non-public pricing, customer lists, technical data and trade secrets of Principal and shall not, during the Term and for months after termination, directly solicit Principal's customers for competing products.

Confidentiality Exceptions (if any):

Indemnification; Limitation of Liability

Each party shall indemnify and hold harmless the other against third-party claims arising out of its gross negligence or willful misconduct. Except for breaches of confidentiality or indemnification obligations, neither party shall be liable to the other for special, incidental, indirect, or consequential damages and aggregate liability shall be limited to the commissions payable under this Agreement in the preceding twelve (12) months.

Independent Contractor; Compliance

Representative is an independent contractor and not an employee, partner or joint venturer of Principal. Representative shall comply with all applicable laws, export controls, anti-corruption statutes and Principal's written policies when performing under this Agreement.

Assignment; Force Majeure; Notices

This Agreement and the rights hereunder are not assignable without the other party's written consent, except to an acquirer of substantially all assets. Neither party shall be liable for delays due to causes beyond its reasonable control. Notices shall be given to the billing/address fields above or to the alternate notice addresses below.

Principal Notice Address (if different): Representative Notice Address (if different):

Governing Law; Dispute Resolution

This Agreement shall be governed by the laws of the State of without regard to conflicts of law principles. The parties shall attempt in good faith to resolve disputes by negotiation; if unresolved, disputes shall be submitted to binding arbitration in the county of Principal's address unless the parties agree otherwise in writing.

Amendment; Entire Agreement

This Agreement may be amended only by a written instrument signed by both parties. This Agreement, including Exhibit A, constitutes the entire agreement between the parties with respect to its subject matter and supersedes all prior proposals and agreements.

Miscellaneous Provisions

If any provision of this Agreement is held invalid, the remainder shall continue in full force. Headings are for convenience only and do not affect interpretation. The parties acknowledge they have read and understand this Agreement and have authority to execute it.

Principal:

By:

Date:

Representative:

By:

Date:

What a Sales Representation Agreement Covers

A Sales Representation Agreement is a contract between a principal (manufacturer, distributor, or service provider) and a sales representative (employee or independent contractor) that defines the scope of sales authority, territory, compensation, reporting obligations, confidentiality, and the term of engagement. It allocates responsibilities for sales activity, sets commission formulas and payment timing, and includes termination and dispute-resolution provisions. Well‑drafted agreements reduce ambiguity about who may solicit business, how commissions are earned and paid, and what post‑termination restrictions or noncompete clauses apply.

Why a Clear Agreement Matters

A written Sales Representation Agreement reduces disputes, ensures consistent commission calculation and tax treatment, and documents the parties’ expectations about territory and customer ownership.

Who Commonly Uses This Agreement

Organizations that rely on outsourced or dedicated sellers use this agreement to govern commercial representation, commission payments, and compliance with tax and labor laws.

Independent sales representatives working on commission for multiple principals
Manufacturers or distributors appointing third‑party selling agents in defined territories
Companies engaging internal sales staff with commission, bonus, or quota arrangements

Independent reps, manufacturers, distributors, brokers, and internal sales leadership all rely on a standard form to ensure consistent operations and auditability.

Typical Signers and Their Roles

Principal

Chief commercial officer or authorized signatory. Signs to bind the company, sets commission plan, and accepts responsibility for product representations and payment terms. Typically retains rights to intellectual property and final approval over pricing and promotions.

Representative

Individual seller or agency owner. Signs to accept appointment, commission structure, and performance obligations. Must provide tax documentation (W-9 if U.S. person) and agree to confidentiality, territory limits, and any noncompetition or non‑solicit covenants.

Essential Elements to Include

A comprehensive Sales Representation Agreement addresses commercial terms, legal protections, and operational processes so both parties understand obligations and remedies.

Appointment

Specifies whether the representative is exclusive or non‑exclusive, the precise geographic or customer territory, and any product or service categories covered by the appointment.

Compensation

Defines commission rates, tiers, calculation basis, timing of payments, deduction rights, and how refunds or chargebacks affect commissions.

Term & Termination

States the initial term, renewal mechanics, notice periods for termination for convenience or cause, and post‑termination wind‑down obligations.

Reporting & Audit

Requires regular sales reports, invoicing procedures, and audit rights to verify commissions and customer records with defined notice and access terms.

Confidentiality

Protects trade secrets, pricing, and customer lists; includes duration and permitted disclosures to comply with law or court orders.

Compliance

Allocates responsibility for taxes, licenses, anti‑bribery compliance, product claims, and determines whether rep is treated as employee or independent contractor for tax purposes.

Step-by-Step: Completing the Agreement

Follow this ordered checklist to prepare an enforceable Sales Representation Agreement and collect necessary supporting items.

01

Draft core terms: Define territory, exclusivity, and commission formula.
02

Confirm tax status: Obtain W-9 or W-8BEN and classify worker status.
03

Set authentication: Choose signer authentication level for eSigning.
04

Execute and distribute: Collect signatures and send fully executed copies to parties.

Online Workflow Settings for eSigning

Configure the digital flow to match your approval and security requirements before sending agreements for signature.

Field	Configuration
Authentication level	Email link, SMS code, or KBA
Signing order	Sequential or parallel
Template reuse	Save as reusable template
Notifications	Set reminders and completion alerts

Digital Signing and Platform Needs

Choose eSignature settings that balance user convenience and authentication strength based on the agreement’s commercial value and regulatory context.

Integrations: Salesforce, NetSuite, Google Workspace
Formats supported: PDF, DOCX, HTML
Authentication: Email, SMS, advanced options

Typical eSigning Flow for This Agreement

The digital signing process follows a predictable sequence; each step captures metadata that supports enforceability under U.S. electronic signature laws.

Upload document: Prepare final agreement file
Add fields: Place signature, initial, and date fields
Send to signers: Email or secure link delivery
Complete audit trail: Timestamp, IP, and actions recorded

Consequences of Errors or Missing Terms

Misclassification: Payroll taxes and penalties

Commission disputes: Damages and litigation costs

1099 Penalties: $60–$660+ per form

I-9 Violations: $281–$2,789 per violation

Breach of contract: Specific performance or damages

Privacy breaches: Regulatory fines and remediation costs

Common Preparation and Execution Mistakes

Vague territory descriptions that create competing claims over the same customers and lead to costly arbitration or litigation.
Unclear commission definitions that omit deductions for returns, discounts, or chargebacks and produce post payment disputes.
Failing to obtain tax forms (W-9/W-8) or to document independent contractor status, creating IRS audit exposure and additional tax liabilities.
Using informal signature methods without an audit trail or authentication, which can weaken enforceability under ESIGN and UETA frameworks.

How Organizations Use Sales Representation Agreements

Real examples show how organizations streamline sales coverage, protect IP, and clarify commission mechanics when using written representative agreements.

Martin Properties

A regional broker standardized rep agreements to close deals faster and reduce disputes.

Reduced turnaround time by digitizing execution.
Tim Martin reported that processing and executing documents online improved compliance and allowed mobile signing, enabling timely payment of commissions and clearer customer ownership records.

Tech Data

An enterprise vendor aligned global reseller terms under a template to ensure consistent commissions.

Improved internal service and speed to revenue.
Bob Dutkowsky noted the solution helped improve customer service while accelerating contract processing across teams and distributors.

eSignature Vendor Pricing Snapshot

Comparison of common eSignature entry points and features relevant to executing Sales Representation Agreements; signNow is listed first per platform positioning rules.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	Varies	Varies	Varies	Varies
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No
Envelope Cap	No cap	100 envelopes/user/year	Varies	Varies	Varies

Key Dates and Ongoing Deadlines to Track

Track execution, onboarding, commission payment dates, and tax reporting deadlines to reduce exposure and ensure timely compliance.

Execution Date:

Record effective date when last party signs

Onboarding Deadline:

Complete rep profile and tax forms before first sale

Commission Payment Date:

Follow stated payment cycle (e.g., Net 30)

Termination Notice:

Honor contract notice periods for convenience or cause

1099-NEC Filing:

Issue by Jan 31 for independent contractors

Typical Lifecycle Milestones

Key stages from negotiation through post‑termination administration help you operationalize the agreement and measure compliance.

01

Negotiation

Agree territory, commission, and term

02

Execution

Collect signatures and set effective date

03

Onboarding

Provide training, reporting templates, and tax forms

04

Performance Monitoring

Review sales reports and reconcile commissions

Practical Tips for Accurate Agreements

Use consistent templates and version control to reduce negotiation friction and simplify audits.

Use clear metrics

Define exactly how commissions are calculated, when revenue counts, and how returns affect payments to prevent interpretation disputes.

Document lead ownership

Attach customer lists or CRM rules to reduce conflicts over who owns a prospect after termination or intermediation.

Choose authentication deliberately

Match signer authentication strength to risk: email for low value, SMS or advanced methods for high‑value deals or regulated industries.

Retain full audit trails

Store signed copies with metadata, timestamps, and signer identity evidence to support enforcement under ESIGN and UETA.

Security and Compliance Features to Expect

In transit: TLS 1.2/1.3

At rest: AES-256 encryption

Authentication: Multi-factor options available

Certifications: SOC 2 Type II

Regulatory: ESIGN, UETA compliant

Healthcare: HIPAA available with BAA

Frequently Asked Questions

Answers to common legal, operational, and technical questions about preparing and executing Sales Representation Agreements.

Need help? Contact support

Can an agreement be signed electronically?
Yes. Electronic signatures are legally effective under the ESIGN Act (15 U.S.C. §7001) and UETA where adopted, provided intent, consent, attribution, and record retention requirements are met.
When is notarization required?
Notarization is rarely required for sales rep agreements, but state law or specific transaction types may require acknowledgement; verify with state statutes or counsel when in doubt.
How to avoid commission disputes?
Define commission base, timing, and chargeback rules clearly, require periodic reporting, and include audit rights to reconcile payments and reduce post‑termination claims.
What tax forms are needed?
Collect a completed W-9 (U.S. person) or appropriate W-8 form for nonresidents; issue Form 1099-NEC by Jan 31 for qualifying independent contractors.
How to protect confidential information?
Include a narrowly tailored confidentiality clause, limit permitted disclosures, and specify duration; consider a separate non‑disclosure agreement for sensitive data.
Can a terminated rep claim commissions later?
It depends on the agreement language; include specific post‑termination commission rules and a survivability clause to limit unexpected future claims.

be ready to get more

Join over 28 million airSlate SignNow users

Sign Now