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Draw Against Commission Agreement Template for Philippines

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Key Requirements PROMPT example:

Draw Against Commission Agreement

"I need a Draw Against Commission Agreement for our real estate agency in Manila, where agents receive a monthly draw of 50,000 PHP against a 5% commission on property sales, with the agreement starting January 1, 2025."

Document background
The Draw Against Commission Agreement is essential for businesses operating in the Philippines that employ commission-based sales representatives or agents. This document type is particularly relevant when companies wish to provide their sales force with regular income through advances while maintaining a commission-based compensation structure. The agreement must comply with Philippine legislation, including the Civil Code of the Philippines and relevant labor laws, while clearly outlining the terms of the draw arrangement, commission calculations, reconciliation procedures, and repayment obligations. It's commonly used when recruiting new sales representatives who need income stability during their initial period, or for establishing long-term relationships with experienced sales professionals. The agreement protects both parties by clearly defining the financial relationship, performance expectations, and settlement terms.
Suggested Sections

1. Parties: Identification of the Principal and the Commission Agent with their complete legal names and addresses

2. Background: Context of the agreement, nature of the business relationship, and general purpose of the arrangement

3. Definitions: Definitions of key terms used throughout the agreement, including 'Draw', 'Commission', 'Sales', 'Products/Services'

4. Appointment and Scope: Terms of appointment of the commission agent and scope of authority

5. Draw Amount and Payment: Specification of the draw amount, payment frequency, and payment method

6. Commission Structure: Detailed explanation of commission rates, calculation method, and earning conditions

7. Draw Recovery and Reconciliation: Process for reconciling draws against earned commissions and recovery of excess draws

8. Minimum Performance Requirements: Sales targets or minimum performance standards required to maintain the draw arrangement

9. Reporting and Documentation: Requirements for sales reporting, documentation, and commission calculations

10. Term and Termination: Duration of the agreement and conditions for termination

11. Final Settlement: Process for final reconciliation and settlement of draws and commissions upon termination

12. Governing Law and Jurisdiction: Specification of Philippine law as governing law and jurisdiction for disputes

13. Execution: Signature blocks and execution formalities

Optional Sections

1. Non-Competition: Restrictions on the agent's ability to work with competitors, used when protecting market territory is important

2. Confidentiality: Provisions for protecting confidential information, used when sensitive business information will be shared

3. Training and Support: Details of any training or support provided by the principal, used when specific product knowledge or skills are required

4. Insurance Requirements: Insurance obligations of the agent, used when the nature of business requires specific coverage

5. Intellectual Property: Protection and usage of intellectual property, used when branding or proprietary information is involved

6. Territory Restrictions: Geographic or customer segment limitations, used when territory exclusivity is granted

7. Dispute Resolution: Alternative dispute resolution procedures, used when parties prefer mediation or arbitration over litigation

Suggested Schedules

1. Commission Rate Schedule: Detailed breakdown of commission rates, including any tiered structures or special promotions

2. Products/Services List: Comprehensive list of products or services covered by the agreement

3. Sales Territory Map: Geographic boundaries or customer segments assigned to the agent

4. Performance Metrics: Detailed performance standards and measurement criteria

5. Reporting Templates: Standard forms for sales reporting and commission calculations

6. Draw Calculation Examples: Examples illustrating how draws and commission reconciliation work

7. Required Documentation: List of required documents for sales verification and commission claims

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions


































Clauses






























Relevant Industries

Real Estate

Insurance

Financial Services

Retail

Manufacturing

Technology

Telecommunications

Pharmaceutical

Automotive

Consumer Goods

Direct Selling

Professional Services

Media and Advertising

Relevant Teams

Sales

Human Resources

Legal

Finance

Operations

Commercial

Compliance

Business Development

Compensation & Benefits

Accounting

Relevant Roles

Sales Director

Sales Manager

Sales Representative

Business Development Manager

Account Executive

Regional Sales Manager

Commission Agent

Sales Agent

Independent Contractor

Territory Manager

Channel Manager

Broker

Agency Manager

Compensation Manager

HR Director

Legal Counsel

Finance Director

Commercial Director

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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