Corporate, Commercial Law and Dispute Resolution · Contracts, Commercial Law and Transactions
Commission agreement regulates a commercial-intermediary relationship between a principal and a commission agent and should clearly identify the transactions to be performed, remuneration and reimbursable expenses. Precise drafting is particularly useful where goods are sold through an intermediary or another legal action is performed for the principal's commercial benefit.
Purpose of the Agreement
The commission agent is undertaking one or more transactions for remuneration on instructions from the principal. The arrangement may cover sale of property belonging to the principal or other agreed legal actions.
Rights and obligations arising from transactions with third parties should be addressed directly because the commission agent is the party interacting with those counterparties in the performance of the arrangement.
Subject Matter
Transaction scope is the central contractual element. The agreement should contain enough detail to identify the legal actions expected from the commission agent and the nature of the transaction to be carried out.
Remuneration and Expenses
Commission agent is entitled to the agreed remuneration for performance. The contract should also define which expenses incurred during execution are reimbursable and what evidence is required for repayment.
Unsold Goods and Settlement
Where goods are accepted for commission sale, the agreement should specify the procedure for returning unsold items, applicable deadlines and the documents used to confirm the return.
Terms Worth Defining Clearly
transactions and legal actions included in the mandate;
commission fee and payment procedure;
reimbursable expenses and supporting documents;
return of unsold property;
rights and obligations of each party;
liability and dispute-resolution mechanisms;
confidentiality and protection of commercial information.
Commission contract structure should make the intermediary's authority, compensation, expenses and settlement procedure predictable before third-party transactions begin. Clear operational terms help the principal control the commercial result while giving the commission agent a defined basis for performance and payment.
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Price: Commission Agreement under Ukrainian Law