What should an agency contract include?

A complete agency contract includes the parties, the appointment and scope of authority, the territory and products covered, the commission or fee structure, each party’s duties, the term and termination terms, indemnification and liability, confidentiality, and governing law. The scope-of-authority and commission clauses prevent the most common disputes.

Is an agency contract the same as an agency agreement?

Yes. "Agency contract" and "agency agreement" refer to the same document — a contract that grants an agent authority to act for a principal. The terms are used interchangeably. Whichever label you use, the substance and the clauses you need are identical.

How do I write an agency contract?

Identify the principal and agent, define the appointment and whether it is exclusive, set the scope of authority with clear limits, build the commission structure, lay out both parties’ duties, add term and termination terms, and cover confidentiality, indemnification, and governing law. Start from a template, fill in your specifics, and have both parties sign.

Do I need a lawyer for an agency contract?

For a standard commission-based agency arrangement, a clear template filled in carefully is usually enough. A lawyer’s review is worth it for high-value arrangements, cross-border agencies (some countries give agents statutory compensation on termination), or unusual authority and liability terms. Using a template or generator gets you a solid draft to work from either way.

Agency Contract Template: A Step-by-Step Guide

Q: What is an agency contract?

An agency contract is a legally binding agreement in which one party (the principal) authorizes another (the agent) to act on its behalf in dealings with third parties — for example, a sales agent taking orders or a booking agent negotiating terms. The defining feature is representation: within the authority granted, the agent’s actions can bind the principal.

A free agency contract template you can copy and customize, plus step-by-step guidance on authority, commission, and termination. Everything to draft one yourself.

An agency contract lets one party act on another's behalf — a sales agent landing orders for a manufacturer, a booking agent negotiating dates for a performer, a rep signing deals in a company's name. Because the agent can bind the principal, the contract has to be clear about exactly how far that authority goes and how the agent gets paid.

This page gives you a free, fill-in-the-blank agency contract template you can copy and customize, then walks through how to complete each section. If you want a deeper conceptual breakdown of every clause and how courts treat agency relationships, our full guide on how to write an agency agreement covers that; this page is built around the template itself.

What Is an Agency Contract?

An agency contract is a legally binding agreement in which a principal authorizes an agent to act on the principal's behalf in dealings with third parties. Within the authority the contract grants, the agent's actions can commit the principal — that representation is what sets an agency contract apart from an ordinary service contract.

You will see the same document called an "agency contract" or an "agency agreement." They mean the same thing. Whichever term you use, the clauses you need are identical: a defined scope of authority, a clear commission structure, and clean termination terms.

Agency contracts turn up across sales, real estate, talent and booking, procurement, and marketing. The label matters less than the substance: if one party can act in the other's name, you are in agency territory, and the contract needs to treat it that way.

Agency Contract Template

Copy the template below and replace everything in [BRACKETS] with your details. Delete any clause that does not apply, and add specifics wherever the template is general — vague language is what causes agency disputes.

Agency Contract

This Agency Contract (this “Agreement”) is entered into as of [DATE] between [PRINCIPAL LEGAL NAME], of [ADDRESS] (the “Principal”), and [AGENT LEGAL NAME], of [ADDRESS] (the “Agent”).

NOW, THEREFORE, in consideration of the mutual covenants set forth herein, the Principal and the Agent agree as follows:

1. Appointment. The Principal appoints the Agent as its [EXCLUSIVE / NON-EXCLUSIVE] agent to [DESCRIBE THE AGENCY — E.G., SOLICIT ORDERS FOR THE PRINCIPAL’S PRODUCTS] within the Territory defined below. The Agent accepts the appointment and agrees to act in the Principal’s best interests.

2. Territory and Products. The Agent is authorized to act on the Principal’s behalf within [GEOGRAPHIC TERRITORY AND/OR CUSTOMER SEGMENT] with respect to [THE SPECIFIC PRODUCTS OR SERVICES].

3. Scope of Authority. (a) The Agent is authorized to [LIST WHAT THE AGENT MAY DO — E.G., SOLICIT AND ACCEPT ORDERS UP TO $[AMOUNT], NEGOTIATE PRICES WITHIN A RANGE OF [X], INTRODUCE CUSTOMERS].(b) The Agent may not, without the Principal’s prior written approval: [LIST LIMITS — E.G., AGREE TO DISCOUNTS ABOVE [X]%, SIGN CONTRACTS ABOVE $[AMOUNT], MAKE REPRESENTATIONS BEYOND THE PRINCIPAL’S PUBLISHED MATERIALS].

4. Commission. The Principal will pay the Agent a commission of [X]% of [THE BASIS — E.G., NET ORDER VALUE]. Commission is earned [WHEN — E.G., WHEN THE CUSTOMER PAYS THE PRINCIPAL] and paid [SCHEDULE — E.G., WITHIN 30 DAYS OF THE END OF EACH MONTH]. Commission on cancelled or returned orders [IS REVERSED / IS NOT PAYABLE].

5. Duties of the Agent. The Agent will use reasonable efforts to promote the Principal’s products, follow the Principal’s pricing and policies, keep accurate records, not represent competing products, and pass all customer information to the Principal.

6. Duties of the Principal. The Principal will provide product information and support, honor orders the Agent properly secures, pay commission on time, and [FOR EXCLUSIVE AGENCIES: NOT SELL DIRECTLY INTO THE TERRITORY WITHOUT COMPENSATING THE AGENT].

7. Term and Termination. This Agreement begins on [START DATE] and continues for [INITIAL TERM], then [RENEWS AUTOMATICALLY UNLESS EITHER PARTY GIVES [X] DAYS’ NOTICE / EXPIRES]. Either party may terminate for cause immediately on material breach, or for convenience with [X] days’ written notice. On termination, the Agent is owed commission on orders [SECURED BEFORE / PAID BEFORE] the termination date.

8. Confidentiality. The Agent will keep the Principal’s customer lists, pricing, and business information confidential during and after the term and will not solicit the Principal’s customers for [PERIOD] after termination.

9. Indemnification. The Agent will indemnify the Principal against claims arising from the Agent exceeding its authority or making unauthorized promises. The Principal will indemnify the Agent against claims arising from defective products or marketing materials the Principal supplied.

10. Independent Contractor. The Agent is an independent contractor, not an employee, and is responsible for its own taxes and expenses except as expressly stated in this Agreement.

11. Governing Law. This Agreement is governed by the laws of the State of [STATE], and any dispute will be resolved in [VENUE].

12. Entire Agreement. This Agreement is the entire agreement between the parties and supersedes any prior understanding or agreement between them. It may be amended only by a written amendment signed by both parties.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

Principal

Signature: ______________________ Date: __________

Name / Title: [NAME AND TITLE]

Agent

Signature: ______________________ Date: __________

Name / Title: [NAME AND TITLE]

How to Fill In the Template: Step by Step

Step 1: Name the parties. Use full legal names and entity types. Be explicit about who is the principal and who is the agent — the roles carry different obligations and liabilities.

Step 2: Set the appointment and exclusivity. Decide whether the agency is exclusive (one agent for a territory) or non-exclusive. If it is exclusive, expect to attach performance targets so you are not locked into a non-performing agent.

Step 3: Draw the boundaries. Define the territory and products precisely. "The East Coast" invites arguments; name states, regions, or specific accounts.

Step 4: Define authority — and its limits. This is the clause that prevents most disputes. Spell out what the agent can do and what needs your sign-off, with dollar thresholds where they apply. An agent who appears to have broad authority can bind you even beyond what the contract says, so make the limits clear.

Step 5: Build the commission structure. State the rate, the basis, when commission is earned (at order, at delivery, or at payment), how cancellations and returns are handled, and whether trailing commissions apply after termination. The "when is it earned" wording drives your cash flow — pin it down.

Step 6: Set term and termination. Pick an initial term, decide on renewal, and write clear exit terms including what the agent is owed for pipeline deals at termination.

Step 7: Add the protective clauses. Confidentiality, non-solicitation, indemnification, and governing law. For cross-border agencies, governing law matters even more, since some jurisdictions grant agents statutory compensation on termination that you cannot contract away.

Step 8: Sign with authority. For a company, the signer must have authority to bind the entity. Date it and keep a signed copy on each side.

Agency Contract vs. Related Documents

Reaching for the wrong document is a common and costly mistake. Use an agency contract only when the person will genuinely act in your name. If they will not, a lighter document fits better:

A sales commission agreement focuses on how a salesperson is paid, without granting authority to bind the company.
A referral agreement covers someone who only introduces leads for a fee — no authority to negotiate or close.
A plain service agreement covers a vendor delivering work who cannot commit you to anything.

If the person will represent you and act in your name, the agency contract is the right tool. If they will only refer, sell on commission without authority, or deliver a service, choose one of the alternatives.

Common Mistakes to Avoid

Leaving authority undefined. "The Agent may act on the Principal's behalf" is not a scope. Without limits, you invite unexpected obligations and apparent-authority claims.

Skipping the "when is commission earned" question. An agent who thinks they earn at order and a principal who pays at customer payment are heading for a fight. Write it down.

Ignoring trailing commissions. If you do not address repeat orders after the relationship ends, you leave the most contentious money question open.

Granting exclusivity with no targets. Exclusivity without minimum-performance terms can lock you into a non-performing agent for years.

Treating it like a generic service contract. Agency carries representation and liability that ordinary service work does not. A boilerplate template that ignores authority and indemnification leaves the principal exposed.

Related guides

Generate Your Agency Contract with Contractable

A strong agency contract comes down to three things done well: a clearly bounded scope of authority, a commission structure with no gaps, and clean termination terms. The template above gives you the structure, but tailoring the authority limits, commission timing, and protective clauses to your specific arrangement is where the real work is. Contractable builds a customized agency contract in minutes from a plain-language description of your deal, with those clauses already set for your situation — so you can appoint an agent with the boundaries in writing from day one. No lawyers or legal background required.