Normally manufacturing companies appoint selling agent to sell sale of products as it is a Herculean task to do manufacturing and selling activities simultaneously. The selling agent will get commission on sale of goods. Some companies appoint sole selling agent for their product. They may or may not appoint sub-agent to sell products in different areas.
Sample Format of Agreement to appoint selling agent for a manufacturing Company is given below.
AGREEMENT OF APPOINTMENT OF SOLE SELLING AGENT
This Agreement made on this _____day of _________________
______________Company Ltd, a company registered under the companies Act 1956 manufacturers of___________ (Hereinafter called the "Manufacturers") of the One Part
_______________ (Hereinafter called the "Agent") of the Other Part.
WHEREAS the manufacturers are engaged in the manufacture of _________and are desirous of appointing a sole selling agent for the sale of the same.
AND WHEREAS the sole agent has approached the manufacturers for appointment as the sole selling agent for ___________ goods of the manufacturers and is willing to perform the duties as such.
NOW THIS DEED WITNESSES AND THE PARTIES HERETO HEREBY AGREE AS UNDER
1. The company appoints the agent and the agent agree to act as company's sole selling agent for the State of _______ with effect from _______ or a period of five years for the promotion and sale of the company's products in the said area.
2. The agent shall make sale of the company's products and shall work conscientiously for the promotion and sale of company's products.
3. The agent shall sell the goods in retail at the retail rates fixed by the company. The agent shall not sell the goods in retail below the retail price fixed by the company.
4. The agent shall be entitled to a commission of __% (_____r per cent) on the net proceeds of the sale of such goods. However, the commission shall be payable upon money actually received and not on outstanding debts.
5. The company will not effect direct sale of its products within the area of the State of Rajasthan and all inquiries, orders and correspondence received by the company in relation to that area shall be forwarded to the agent to be dealt with.
6. The company shall supply the goods to the agent at its own cost and charge as early as possible after receipt of the order in writing.
7. The company shall reimburse to the agent all reasonable expenses for carriage or delivery of said goods, and other reasonable expenses attending the sale thereof.
8. The agent shall maintain proper accounts of
(i) all goods received by them;
(ii) the particulars of the sale thereof;
(iii) all credits given on account of any goods. The company's executive and
authorized officials shall be entitled to inspect such accounts at reasonable
times, who may also take copies or extracts from the same or any of them.
9. The agent will submit true and proper accounts of
(i) all goods received by them;
(ii) all orders received by them;
(iii) the particulars of all sales;
(iv) other transactions made and
(v) of all money received and spent by them for and on account of the goods
of every quarter to the company in the first week of every quarter. The company
will have the right to check the accounts with the account books.
10. The parties shall settle accounts respecting the sale of goods and other matters on the day in every year.
11. The company will be entitled to issue reasonable directions and instructions to the agent relating to the sale of the company's products or otherwise relating to the agency business during the continuance of the agency and the agent will be bound to obey and observe the said directions and instructions, unless prevented by unavoidable cause.
12. The agent shall not during the continuance of the agency buy, sell or deal in the products manufactured by the company, for or on account of any other person other than the company without the consent of the company in writing.
13. The agent shall not pledge the company's goods supplied to them without the consent in writing of the company.
14. The agent shall deposit with the company a security of Rs ______ in cash for the due performance of this Agreement. The agent shall be entitled to simple interest at the rate of __ % per annum on the amount of the security deposited by them with the company, which shall be paid at the time of settlement of accounts every year. Without prejudice to its other rights, the company may at its discretion, adjust dues or losses suffered by it on account of breach or non- compliance of the terms of this agreement from the security.
15. The company may terminate this agreement, if the agent fail to comply
with the terms of this agreement or do not make satisfactory sale of the
company's products. The company's opinion shall be final in this regard.
However, the company shall give one month's notice to the agent to submit its
explanation on the grounds on which the company intends to terminate the
16. Either party may terminate the agreement by giving three months notice in writing to the other party. The accounts between the parties shall be settled and finally adjusted within the three months from the date of termination of agency.
17. On the termination of this agreement, the agent will deliver the goods as shall remain unsold, all books of account and documents relating to the said agency to the company.
18. The agent shall not assign or transfer the agency to any other person in any manner without the consent of the company in writing.
19. All disputes and differences of any kind whatever arising out of or in connection with this agreement shall be referred to the arbitration and final decision of an arbitrator to be agreed upon and appointed by both the parties or in case of disagreement as to the appointment of a single arbitrator to the appointment of two arbitrators, one to be appointed by each party and if there are two arbitrators, they shall before taking upon themselves the burden of reference appoint a third arbitrator who shall act as Presiding Arbitrator. This submission to the arbitrators shall be deemed to be a submission to arbitration within the meaning of the Arbitration and Conciliation Act, 1996 or any statutory modification thereof. The award of the arbitrator or arbitrators as the case may be, shall be final and binding on the parties.
20. This agreement shall be executed in duplicate. The original shall be retained by the company and duplicate by the agent. The agent shall bear the stamp duty and other expenses on the original and the duplicate of this agreement.
IN WITNESS WHEREOF the parties hereto have signed this agreement on the day
year first written above.
Dated this _______ day of _____________
Name & designation of First Party
1. Signature, Name and Address
Name & designation of second party
2. Signature, Name and Address