Free Commission Agreement Template

COMMISSION AGREEMENT

England And Wales  ·  Commercial Agents Regs 1993  ·  SGSA 1982 S.13  ·  2026-05-01

This Commission Agreement (this "Agreement") is entered into as of 2026-05-01 between:

(1) Horizon Technologies Ltd (company number 12345678) of 200 Victoria Street, London, SW1E 5NE (the "Principal"); and

(2) Reynolds Sales Ltd (Limited Company), VAT GB987654321 of 15 Station Road, Birmingham, B1 2JT (the "Agent").

The Principal wishes to appoint the Agent to negotiate and/or conclude the sale of the Principal's Products/Services within the Territory, and the parties intend the Agent to act as a "commercial agent" within the meaning of regulation 2(1) of the Commercial Agents (Council Directive) Regulations 1993, on the terms of this Agreement.

The Principal hereby appoints the Agent on a Exclusive - sole agent in territory basis to promote the sale of SaaS software licences, implementation services and annual support packages for the UK SME market (Horizon CRM and Horizon Billing product lines) (the "Products") within the Territory of United Kingdom (the "Territory") for an initial term of 24 months commencing on 2026-05-01.

Status: Commercial Agent (within Regulations). The parties acknowledge that the Agent has continuing authority to negotiate the sale of the Products on behalf of the Principal and is therefore a commercial agent within the meaning of reg 2(1) of the Commercial Agents (Council Directive) Regulations 1993 (SI 1993/3053). The mandatory provisions of the 1993 Regulations shall apply and no provision of this Agreement shall derogate from them to the detriment of the Agent (reg 5, reg 19).

The Agent is an independent contractor and not an employee, worker (Employment Rights Act 1996 s.230) or partner of the Principal, and shall not hold itself out as such. The Agent shall be solely responsible for its income tax, National Insurance and (if registered) VAT.

The Agent shall: (a) use its best endeavours to negotiate and, where authorised, conclude sales of the Products within the Territory; (b) act dutifully and in good faith in its dealings with the Principal in accordance with regulation 3 of the Commercial Agents Regulations 1993, including (i) making proper efforts to negotiate and conclude transactions, (ii) communicating all necessary information available to it, and (iii) complying with reasonable instructions of the Principal; (c) carry out the Services with reasonable care and skill (Supply of Goods and Services Act 1982 s.13); (d) not (during or after the term) represent any competing principal in the Territory without the Principal's prior written consent; (e) comply with all applicable laws, including the Bribery Act 2010, UK GDPR/DPA 2018, competition law (Competition Act 1998 Chapter I) and any sector-specific regulations (for example, FSMA 2000 where the Products are regulated financial products); and (f) keep accurate records of all customer enquiries, orders, samples and promotional materials.

The Principal shall: (a) act dutifully and in good faith towards the Agent in accordance with regulation 4 of the Commercial Agents Regulations 1993; (b) provide the Agent with the necessary documentation, samples and information relating to the Products; (c) obtain for the Agent the information necessary for the performance of the agency contract, in particular notify the Agent within a reasonable period once it anticipates that the volume of commercial transactions will be significantly lower than the Agent could normally have expected (reg 4(2)(b)); (d) inform the Agent within a reasonable period of its acceptance, refusal, and any non-execution of a commercial transaction which the Agent has procured (reg 4(3)); and (e) supply the Products promptly in accordance with orders validly procured by the Agent.

The Principal shall pay the Agent commission calculated as follows: Percentage of sale value at the rate of 10% of net invoiced value (excluding VAT and discounts).

Entitlement. The Agent shall be entitled to commission on commercial transactions concluded during the period covered by the agency contract: (i) where the transaction has been concluded as a result of the Agent's action; or (ii) where the transaction is concluded with a third party whom the Agent has previously acquired as a customer for transactions of the same kind; or (iii) where the Agent has an exclusive right to a specific geographical area or group of customers and the transaction has been entered into with a customer belonging to that area or group — in each case as provided by regulation 7 of the Commercial Agents Regulations 1993.

Timing. Commission shall become due: On receipt of payment from customer, consistent with reg 10 of the 1993 Regulations (not later than the last day of the month following the quarter in which it became due, unless otherwise agreed). Commission shall be paid Monthly in arrears.

VAT. The Commission rate stated is exclusive of VAT. Where the Agent is VAT-registered, VAT at the prevailing rate shall be added on a valid VAT invoice in accordance with the Value Added Tax Act 1994 s.6.

The Principal shall supply the Agent, not later than the last day of the month following the quarter in which commission became due, with a statement of the commission due setting out the main components used in calculating the amount, in accordance with regulation 12(1) of the 1993 Regulations. The Agent shall be entitled to demand all information available to the Principal and necessary to check the amount of commission due, including extracts from the books (reg 12(2)-(3)).

The Agent shall use best endeavours to achieve a minimum sales volume of £150,000 net sales per quarter (the "Target") over the Term. If the Agent fails to achieve the Target: No penalty - target is aspirational.

Bonus / accelerator: Increased rate above target threshold. Any accelerated rate shall apply to commissionable value above the threshold only, unless expressly stated otherwise.

The parties acknowledge that under Peter Long and Partners v Burns [1956] 1 WLR 413 the Agent's entitlement to commission is determined by the true construction of this Agreement as a whole.

Pursuant to regulation 11 of the Commercial Agents Regulations 1993, the right to commission shall be extinguished only if and to the extent that it is established that the contract between the third party and the Principal will not be executed and that fact is due to a reason for which the Principal is not to blame. Any commission which the Agent has already received shall be refunded if the right to it is extinguished (reg 11(2)). In accordance with that regulation, the parties agree the following clawback mechanism: if a customer cancels, returns or charges back within 60 days from sale, the corresponding commission shall be clawed back and the Principal may set it off against commission otherwise due to the Agent.

Reporting. Principal provides monthly commission statement. The Agent may at any time demand that the Principal supply a statement under reg 12(1) and/or the information required to check commission under reg 12(2), which shall be provided within a reasonable period.

In accordance with regulation 8 of the Commercial Agents Regulations 1993, the Agent shall be entitled to commission on commercial transactions concluded after the agency contract has terminated if: (a) the transaction is mainly attributable to the Agent's efforts during the period covered by the agency contract and the transaction was entered into within a reasonable period after the contract terminated; or (b) the order of the third party reached the Principal or the Agent before the agency contract terminated. For the avoidance of doubt, the parties agree a practical pipeline period of Commission paid on deals closed within 90 days of termination.

Either party may terminate this Agreement by giving 3 months written notice to the other. Where this Agreement is for an indefinite period, the minimum statutory notice periods under regulation 15 of the Commercial Agents Regulations 1993 shall apply: one month for the first year, two months for the second year and three months for the third and subsequent years (reg 15(2)). Any longer periods agreed shall be equal for both parties (reg 15(3)).

Either party may terminate immediately by written notice where the other: (a) commits a material breach not remedied within 14 days; (b) becomes insolvent within the meaning of the Insolvency Act 1986; or (c) engages in any conduct which would justify summary termination at common law or under regulation 16 of the 1993 Regulations (immediate termination for fundamental breach).

On termination of the agency contract (otherwise than by reason of the Agent's serious default under reg 18), the Agent shall be entitled to: Compensation (default under Regulations) under regulation 17 of the Commercial Agents Regulations 1993.

Compensation (reg 17(6)-(7)). The Agent shall be entitled to compensation for the damage he suffers as a result of the termination of his relations with the Principal. Such damage shall be deemed to occur in particular where the termination takes place in circumstances: (a) depriving the Agent of commission which proper performance of the agency contract would have procured, whilst providing the Principal with substantial benefits linked to the activities of the Agent; or (b) which have not enabled the Agent to amortise the costs and expenses incurred for the performance of the agency contract on the advice of the Principal. In accordance with Lonsdale v Howard and Hallam Ltd [2007] UKHL 32, compensation shall be assessed by reference to the value of the agency at the date of termination — broadly, the price a hypothetical willing buyer would pay for the agency on a going-concern basis.

Notice of claim (reg 17(9)). The Agent loses the entitlement to indemnity or compensation if, within one year following termination, the Agent has not notified the Principal that it intends pursuing its entitlement.

For a period of 6 months following termination, the Agent shall not, within the Territory, act for any person whose business competes directly with the Products (UK SME CRM / billing SaaS vendors only). The parties acknowledge that under regulation 20 of the Commercial Agents Regulations 1993, a restraint-of-trade clause is valid only if and to the extent that (a) it is in writing, (b) relates to the geographical area or the group of customers and geographical area entrusted to the Agent and to the kind of goods covered under the agency, and (c) its duration does not exceed two years after termination. Any restriction held by a court to be wider than reasonably necessary for the protection of legitimate business interests shall be severable and read down to the minimum extent necessary (Competition Act 1998 Chapter I; restraint-of-trade doctrine).

Where the Agent processes personal data relating to customers or prospects on behalf of the Principal, the Agent shall do so only on the documented instructions of the Principal and in accordance with Article 28 of the UK General Data Protection Regulation and the Data Protection Act 2018 as amended by the Data (Use and Access) Act 2025 (Commencement No. 6 Regulations SI 2026/82, in force 5 February 2026). The Agent shall: (a) ensure the confidentiality of processing personnel; (b) implement appropriate technical and organisational measures (Art.32 UK GDPR); (c) assist the Principal with data-subject requests and DPIAs (Art.28(3)(e)-(f), Art.35); (d) notify the Principal of any personal data breach without undue delay (Art.33(2)); (e) not engage any sub-processor without prior written authorisation (Art.28(2)); and (f) on termination, delete or return all personal data (Art.28(3)(g)). The Agent shall not use customer data for its own marketing purposes without a separate lawful basis. Any international transfer of personal data shall be made only in accordance with Chapter V UK GDPR (UK adequacy regulations, IDTA or UK Addendum) and shall be assessed by reference to the "data protection test" introduced by Schedule 7 of the DUA Act 2025 (whether the recipient regime is materially lower than the UK standard, replacing the previous "essentially equivalent" test).

Where the Agent uses artificial-intelligence, lead-scoring or automated profiling tools to process prospect personal data, the Agent shall comply with the automated decision-making and profiling regime under Articles 22 to 22D UK GDPR as reformed by section 80 of the Data (Use and Access) Act 2025 (in force 5 February 2026 under SI 2026/82). In particular, where a "significant decision" (such as denial of credit, refusal of supply or denial of a discounted rate) is taken based solely or predominantly on automated processing, the Agent shall ensure data subjects receive (i) information about the decision, (ii) the right to make representations, (iii) the right to obtain human intervention, and (iv) the right to contest the decision. The Agent shall not use the Principal's customer or prospect data to train, fine-tune or otherwise improve any AI / ML model offered to third parties without the Principal's prior written consent.

The Agent shall comply with all applicable laws relating to anti-bribery and anti-corruption, including the Bribery Act 2010 (ss.1, 2, 6 and, in relation to commercial organisations, s.7) and HMG's adequate-procedures guidance. The Agent shall not directly or indirectly offer, give, solicit or accept any bribe, facilitation payment or other improper advantage in connection with the sale of the Products or any matter relating to this Agreement. The Principal may terminate this Agreement immediately upon reasonable suspicion of breach.

Without prejudice to the Principal's obligations under the 1993 Regulations, where commission is not paid by the due date the Agent shall be entitled to statutory interest on the overdue amount at 8% per annum above the Bank of England base rate together with the fixed sum compensation (£40 / £70 / £100 by reference to debt size) and reasonable recovery costs, in accordance with sections 5A and 6 of the Late Payment of Commercial Debts (Interest) Act 1998.

UK Late Payment Reform (forthcoming): The parties acknowledge the UK Government's late-payment reform package announced on 24 March 2026, which will (once in force, expected late 2026 / early 2027) cap payment terms imposed by a large Principal on a smaller Agent at 60 days (reducing to 45 days after further consultation), render the 8% statutory-interest entitlement mandatory and incapable of contractual exclusion, deem commission statements accepted if not disputed within 30 days of receipt, and confer enforcement powers on the Small Business Commissioner (including fines for persistent late payers). To the extent any term of this Agreement becomes inconsistent with that statutory regime, the statutory regime shall prevail.

Each party that is a UK-registered company, limited liability partnership, registered overseas entity or other body registered or required to be registered at Companies House warrants that: (a) each of its directors, members (in the case of an LLP) and registrable Persons with Significant Control ("PSCs") has had their identity verified with Companies House (whether directly or via an Authorised Corporate Service Provider) under sections 1110A to 1110F of the Companies Act 2006 as inserted by section 62 of the Economic Crime and Corporate Transparency Act 2023; (b) the identity verification regime commenced on 18 November 2025 (voluntary phase from 8 April 2025) and the 12-month transition for existing directors and PSCs concludes in mid-November 2026; (c) the signatory executing this Agreement on its behalf has the authority to do so and, where required by law, has personally completed identity verification under the above regime. A material misstatement (i) is a material breach of this Agreement, (ii) may constitute an offence under section 1112 Companies Act 2006 (false statement to the registrar) and (iii) may amount to a "relevant offence" for the purposes of section 199 ECCTA 2023.

Each party warrants that, where it constitutes a "large organisation" within the meaning of section 199 of the Economic Crime and Corporate Transparency Act 2023 (meeting at least two of: ≥250 employees, >£36m turnover, >£18m balance sheet), it maintains reasonable fraud-prevention procedures as required by that section (in force 1 September 2025) and that neither it nor, to its knowledge, any "associated person" within the meaning of s.199 has committed a "relevant offence" in connection with this Agreement or the Products. The Agent acknowledges that, in negotiating sales on behalf of the Principal, the Agent (and any of its sub-agents or employees engaged in the Services) may be an "associated person" of the Principal for the purposes of s.199, and shall not procure any sale by means of false representations, the dishonest concealment of material facts or other "relevant offence". The parties shall promptly notify each other of any actual or suspected fraud connected with the Products or commissionable transactions.

This Agreement and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it or its subject matter shall be governed by and construed in accordance with the law of England and Wales. The parties irrevocably agree that the courts of England and Wales shall have exclusive jurisdiction. The mandatory provisions of the Commercial Agents Regulations 1993 (where applicable) may not be derogated from by choice of a foreign law for an agency operating in the United Kingdom (reg 1(2); Ingmar GB Ltd v Eaton Leonard [2000]).

This Agreement constitutes the entire agreement between the parties relating to its subject matter and supersedes all prior agreements. No variation shall be effective unless in writing and signed by both parties. Failure or delay in exercising any right shall not constitute a waiver. If any provision is held unenforceable, it shall be severed and the remainder shall continue in full force. No person other than a party shall have any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date indicated.