In practice, the issuing of a sales agency agreement can delay getting started. The sales agent might want his solicitor to check your contract out, and come back with issues and amendments. This will involve all parties in delays and possible expenses. In theory, at this time there is nothing to protect as the sales agent has not brought you any customers. Plus it can be expensive: expect a good specialist agreement from a solicitor to cost in the region of £1500 to £3000.
All this might tempt you to skip this stage.
It is vital to get a sales agent agreement in place from the outset, as doing so later on can be tricky and may damage a productive relationship. It’s best to get this out of the way now. Also it forms one of the main terms of reference for the sales agent’s activities, and shows that you are prepared, serious, and professional.
A sales agency agreement covers:
- the geographical area or type of customer.
- exclusivity of area of operation
- commission rates and when payable
- the products
- probationary period
- termination of the agreement
- compensation / indemnification
- supply of sales aids
- the negotiation limits
- what house accounts are there
- paperwork requirements
- notification of orders placed direct
AgentBase supplies a low cost model sales agency agreement, optimised for principals, as part of its Legal Pack.