Document background
The Commission Guarantee Agreement serves as a risk mitigation tool in commercial relationships where commission-based payments are involved. This document type is commonly used in the Philippines when there's a need to secure commission payments, particularly in sales, agency, or distribution arrangements. It provides security to commission earners by having a third party (usually a financial institution or parent company) guarantee their commission payments. The agreement must comply with Philippine civil and commercial laws, including the Civil Code of the Philippines and relevant banking regulations. It's particularly valuable in situations where the commission earner requires certainty of payment, such as high-value sales transactions, real estate deals, or long-term distribution arrangements. The document typically includes detailed provisions on calculation methods, claim procedures, and conditions that trigger the guarantee.
