Exclusive Agency Contract (India) by OLL
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MODEL OF AGENCY CONTRACT
This agreement is executed on this.........................................................................................day of....................................................between..................................................... (principal)
(hereinafter called “the principal”) of the one part and........................................... (agent)
(hereinafter called “the agent”) of the other part.
Whereby it is agreed between the parties as follows:
1. That the agent is hereby appointed as the sole agent of the principal for the
town............................... (in the District of) (hereinafter called “the agency town”) for
the purpose of making sales of the products/goods of the principal for a term of.............................. years commencing from the date hereof on the terms and conditions set forth hereunder.
2. That the agent shall not, while selling the products/goods of the principal make any representation in the trade or give any warranty other than those contained in the principal’s printed price list.
3. That the agent shall be allowed to deduct and retain as his agency commission with
himself.................per cent of the list price of all products/goods sold on behalf of the principal. The agent shall keep a record of all sales and shall regularly remit to the principal on each Saturday all sums received by the agent in respect of such sales less.................. per cent his agency commission. All sales shall be made for cash against delivery of goods unless the principal’s consent in writing to give credit to any particular purchaser be in any case first obtained and in the case of such credit sales the principal may direct for such increase in the price of his products/goods over and above the current list price of the principal.
4. That the agent shall not make purchases on behalf of or in any manner pledge the credit of the principal without the consent in writing of the principal.
5. That the agent shall, at the expense of the principal, take on rent and occupy for the purpose of the agency, suitable premises with prior approval of the principal and shall keep insured for full value against all available risks, all the goods entrusted to his custody by the principal under this agreement and on request, shall produce to the principal, receipts, for the rent, rates and taxes of the said premises and for the premiums on insurance policies showing that the same have been paid on or about their respective due dates. That the agent shall bear all expenses relating to or incidental to the said agency.
6. That the agent, while selling to persons in the trade, shall obtain the purchaser’s
signature to an agreement to the following effect:
(i) That the said products/goods of the principal shall not directly or indirectly be re-sold outside the agency district.
(ii) That the said products/goods of the principal shall not be re-sold to the public below the price list for the time being.
7. That the agent shall, in all his commercial dealings and on documents and on the
name-plate or letter-head indicating his place of business, describe himself as selling
agent for the principal.
This is a preview. The full template is free on GitLaw.
This template outlines an exclusive agency relationship where a principal appoints a sole agent to sell products within a specific territory. It covers critical aspects including commission structures, sales restrictions, stock management, and non-compete obligations post-termination.
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About this template
What is this template?
This is an exclusive sales agency contract governed by Indian law. It includes specific provisions for liquidated damages in Rupee amounts and mandatory arbitration under the 1996 Act. It is not an employment contract or a simple purchase order for goods.
When should you use it?
Use this when granting a representative the sole right to sell products in a defined Indian territory while retaining ownership of the stock. Use a Distribution Agreement instead if the representative is buying the stock outright to resell it.
What's inside
| Clause | Name | What it does |
|---|---|---|
| 1 | Appointment of Sole Agent | Appoints the Agent as the exclusive representative for the Principal's products in a specific town and district for a set number of years. |
| 3 | Agency Commission and Remittance | Allows the Agent to retain a percentage commission on sales and requires weekly remittance of remaining funds every Saturday. |
| 4 | Credit Sales and Pledging Credit | Prohibits the Agent from making purchases or pledging the Principal's credit without prior written consent. |
| 8 | Liquidated Damages | Imposes a fixed sum in Indian Rupees as liquidated damages for every article sold in breach of pricing or territorial restrictions. |
| 9 | Stock Maintenance and Inspection | Requires the Principal to maintain stock at a specific Rupee value and grants a right to perform unannounced stock checks. |
| 15 | Non-Solicitation and Non-Compete | Prohibits the Agent from soliciting customers or engaging in similar business for one year following the termination of the agreement. |
| 17 | Summary Termination | Permits the Principal to terminate immediately if the Agent is guilty of misconduct, bankruptcy, or unauthorized absence for a specified period. |
| 18 | Arbitration | Mandates that disputes be settled via arbitration under the Arbitration and Conciliation Act 1996 with an appointed arbitrator. |
Who it's for
- an Indian manufacturer appointing an exclusive distributor for a specific municipal district
- a commercial principal seeking to restrict an agent from selling competing goods for twelve months post-termination
- a business requiring weekly financial remittances and mandatory stock insurance from its sales representative
How long it runs and how it's signed
Law it's drafted under
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