What is a commercial agent contract? Definition

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The functions of Thecommercial agent are governed by law, and give it the title of independent professional unlike employee representative (VRP). Although he is autonomous in his profession, the commercial agent is however bound by a written contract with his principal. Even if at Akimbo we talk more often with es Business Developers, agent contracts remain frequent in the commercial world.

What is a commercial agent contract? Definition

The commercial agent contract is a settlements concluded between a society And a commercial agent. Its creation encompasses the various prospecting and sales activities that the company wishes to entrust to the independent agent.

What are the characteristics of a commercial agent contract?

When creating and writing a template for commercial agent contract, it must mention these few details:

• The identity and full contact details of both parties;
• The nature of the commercial agent's mission (prospecting, negotiations, negotiations, buying, selling, renting, concluding a contract, etc.);
• The description and designation of the products or services to be represented;
• The geographical sector and the target of potential customers for the realization of missions
• The duration of the contract;
• The remuneration of the commercial agent (law, modality, deadline...) );
• The obligations of the commercial agent and the principal;
• The conditions for a possible cessation of activity;
• Formalities for the handling of disputes.

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What are the main terms of this contract?

The contract template also contains legal conditions to be drawn up and respected by both parties. Here are the essentials:

• The non-competition clause: prohibits the collaboration or representation of one or more competing companies;
• The mandate transfer clause: it prevents the commercial agent from transferring his contract to a third party or to another person;
• The cancellation clause: it occurs in the event of a breach of contract or a possible cessation of relationships between the principal and the mandatary. It contains the reasons for terminating the said contract;
• The exclusivity clause: it applies to the principal and guarantees to the commercial agent that he is the sole commercial representative of the company and its services.

The object and mission of the commercial agent contract

The contract to be drawn up between the mandatary and the principal must indicate the role of both parties in the collaboration. The drafting and signing of contracts are not mandatory, but they are strongly recommended to regularize the legal situation both for the company and for the commercial agent. This makes it possible to establish a contractual framework reassuring for the main parties concerned according to legal formalities and well-defined clauses.

In the case of a real estate sales agent, it should be noted that he does not have the status of merchant or real estate agent. The latter practices an activity ofSelf-employed, thus holding a professional card (T card), and often the owner of an agency. The real estate commercial agent is subject to compliance with the Hoguet law which oversees the purchase and sale of real estate. In addition, it must be registered in the Special Register of Commercial Agents or RSAC.

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Commercial Agent Contract Commission

The commission is one of the essential points to be drawn up before signing a model employment contract as a commercial agent in collaboration with a company.

Commercial agent commissions and fees

As the Commercial Code does not provide for formalities on the method of remuneration of commercial agents, it is important for both parties to identify them in advance. The principal and the mandatary are then free to decide on the fact that the Right to commissions either based on each sale/purchase/rental or by receiving a fixed salary. The commission rate may however vary depending on the sector of activity. This may concern the costs borne by the principal or the reimbursement of accounts incurred by the agent.

It should be remembered that the gross salary of a junior commercial agent varies between €1,500 unto €2,000 per month. The most experienced in businesses receive up to 100 K€ annual euros.

What are the terms of payment of commissions?

The employment contract between the two parties must define the terms of payment that meet the conditions established by them. Moreover, the payment of commissions is not made as sales are made, but by periodic regularization. It can be done monthly or quarterly depending on the agreement reached.

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Termination and disputes of the commercial agent contract

For a fixed-term commercial agent contract, it may end at a Date set. However, it is possible that during the validity of the contract, phenomena may cause one or both parties to break it.

Customer compensation upon breach of contract

In the event of a breach of employment contract, the agent is entitled to a Compensatory allowance for the loss of future commissions. It also contains compensation in lieu of notice and employment. However, the agent will be deprived of this compensation in case of:

• Serious error,
• Transfer of the agent's rights to a third party or to other agents,
• Breach of contract by initiative of the agent in person without legitimate reasons (state of health, fault of the principal, etc.).

What is the duration of the contract and the trial period?

The collaboration between the principal and the commercial agent can be concluded by CDD Or in CDI. In both cases, the agent always benefits from his right to compensation.

As for the trial period, it can range from one month to several months depending on the agreement between the two parties. It starts from the signing of the contract until the deadline set between the partners.

How to deal with disputes between the parties?

The contract generally contains a clause concerning dispute handling between the main parties concerned. In addition, in the event of advanced conflicts, it is possible to initiate legal proceedings to ascertain and resolve disputes.

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Commercial agent contract obligations

Commercial agent contract clauses define the obligations of the parties. Obviously, the formalities of the mandate and the mandatary are not similar.

What are the obligations of a commercial agent

The commercial agent operates in compliance with two articles of the Commercial Code:

• The mutual obligation of loyalty (articles L 134-4 paragraph 2): not representing a competing company during its mandate, obligation of confidentiality on product manufacturing secrets, etc.
• The reciprocal obligation to provide information (articles L 134-4): accurate reporting of accounts, etc.

Depending on the terms of the contract, the commercial agent also has an obligation of means to carry out his missions successfully [negotiations, conclusion of sale/purchase/rental contracts...], follows a minimum sales objective clause in business, respects a disbelief clause, etc.

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What are the obligations of the principal

For his part, the client must fulfill his duties in terms of remuneration and payment of customer benefits if the contract is terminated or terminated. He is also required to respect the various terms of the contract such as exclusivity clause for example.

Beware of the non-competition clause

The post-contractual non-competition clause applies to the commercial agent if it is stipulated and validated by the parties in the legal contract. It is established in writing and is limited to: 2 years. It prohibits the commercial affairs of the agent on the geographic sector, the clientele, and the type of goods represented in the previous contract.

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