Sales Rep Agreement

By downloading or copying this agreement, you agree not to distribute the agreement as a blank legal form or to create a download link directly to the agreement.

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Sales Rep Agreement

Below, we explain  the provisions of the model Sales Representative Agreement.

Introductory Paragraph. Insert the date, your name as Artist and the name of the sales representative or the sales representative’s company.

Appointment. This provision establishes whether your relationship with the sales representative is exclusive or nonexclusive, and establishes in what geographical areas the sales representative will represent your works. Exclusive means that while the agreement is in force, only the sales representative (not you or another sales representative) can represent the works: 1) within the territory you define, and 2) for those sources of revenue set out in the agreement. If the relationship is nonexclusive,  others (including you) could solicit potential deals within the territory and for those purposes.

Choose the type(s) of representation you desire, for example, retail accounts, wholesale accounts and so on, by checking the appropriate box. If you choose licensing rights, specify the type of licensing—for example, licensing for posters, postcards, T-shirts, buttons, caps and whatever else you and the sales rep envision. You can be as broad or as narrow as you want in defining licensing rights, for example: “all forms of merchandise licensing” or “fabrics”. Also choose “commissioned works” if your sales representative will represent you for purposes of getting you work on commission, for example, from collectors.

Territory. Insert a statement in the Territory section to reflect the regions in which you have granted rights, for example, “New York,” “New England” or “the world excluding North America.”

If you already have accounts in these territories, you should exclude them from the agreement by checking the optional provision and listing the accounts on Attachment A.

Two other optional provisions are provided to deal with sales made by the Artist, not the rep, within the Territory. You should only choose these optional provisions if your arrangement is exclusive. If your agreement is nonexclusive within the territory, you don’t need to account for sales that you make in the territory without the rep’s help.

Example: Hans has a nonexclusive contract for wholesale accounts with Joanie, his rep, in the southwestern United States. Hans solicits a wholesale account from a New Mexico gallery without Joanie’s help. He does not have to account to Joanie for the New Mexico revenue. However, if the arrangement with Joanie were exclusive, Hans would have to account to Joanie, since she has exclusive rights to represent him in the southwest.

Once you and the sales rep agree on one of these options, you’ll need to figure out a method of accounting for this nonrep income. Depending on your negotiating leverage, you and the rep might agree on:

  • no payment to the rep
  • full rep commission
  • payment of a portion of the rep commission, or
  • payment of the rep’s commission for sales after the initial order.

Obligations of Sales Representative. This section establishes the sales representative’s duties, namely evaluating opportunities, representing your work and negotiating deals. The “disclaimer” language is inserted to protect the sales representative from future claims that the sales representative promised or guaranteed that your work could be sold or licensed. This provision also guarantees that the sales representative is free to take on other clients.

Sales Representative Reimbursement. If you choose this optional provision, check the boxes indicating which expenses you will pay. If you must pay an exhibit fee to use the rep’s showroom, indicate that fee and when it should be paid, for example, “$50 monthly.” Insert an appropriate amount, for example, “$200,” in the section indicating that your approval is required for expenses.

Obligations of Artist. This section establishes the artist’s duties as well as the artist’s ownership of the artwork samples. In the event that printed materials are required, indicate what materials should be provided. If any additional duties are required of the artist, write this in the blank space.

Payments. Under this provision, the sales representative receives a percentage of all “Works Income.” This income is paid directly to the Artist, who then reimburses the sales rep within a fixed time period, for example, 30 days.

Commissions for sales reps range from 10-25%, although they are commonly in the 15-20% range. Commissions to licensing reps are typically between 20% and 33%.

The audit statement provides that each party can audit the other’s books. That way, you can check to see what the rep has been doing with the accounts and vice versa. Normally, the artist is responsible for all billings and collections. However, if you and the rep have a different arrangement, check the appropriate box.

Rights. The rep will not want any surprises—such as someone claiming that you don’t own the work or that your work infringes on someone’s copyright. For this reason, you should provide a guarantee that you own the artworks and that you have the right to sell and license them. This won’t completely prevent surprises, but it will help keep the sales rep free from liability if something unexpected does pop up.

Advertising. The rep may want to use your name, trademarks or picture in promotional ads at the rep’s booth at trade shows. Check the second option if you and the rep have agreed to allow you prior approval of any such uses.

Assignment. This provision prevents you and the sales rep from transferring contract obligations to someone else. For example, if the rep sold her business to another rep and wanted to transfer your account as part of the sale, your permission would be required.

Termination. What happens if you terminate the sales representative agreement but want to continue your business contact with a company with which you had previously made a deal through the sales rep? Under this provision, if you enter into a sales or licensing agreement with such a company within a fixed period of time after termination, you will have to pay the sales rep a fee for a certain amount of time(three to six months is common). You can also alter the sales representative’s fee for post-termination deals. For example, you can agree that the sales representative will get only one-half of the fees if any agreement is entered into after three months but before six months. The sales representative may insist that you change the agreement so that the sales representative is paid if you enter into a contract with anyone that the sales representative solicited. In that case, in order to be sure that the sales representative has solicited the client or company, request that the sales representative furnish you a list of persons who were solicited (and the dates of solicitation and the name of the person contacted). This list can be furnished at the time of termination, or you can request that the sales representative notify you periodically (say, every six months) of all solicitations during that period.

Miscellaneous/General Provisions. Here’s information about the miscellaneous provisions.

Attachment A. Write up a description of the works that the sales rep will be handling for you in the Attachment. As an alternative for listing specific works, you can include a statement such as, “All works created prior to and during the term of this Agreement” or “Any new artworks created during the term of this Agreement.” Also, if you are excluding some accounts, list them in Attachment A as well.