Employment

Agency agreement template

Create and automate agency agreements more efficiently with this free template.

Our templates are for general information only. You should not rely on them, and Juro is not liable for any reliance on them. The templates might contain errors, including unlawful provisions and might create risks and liabilities if used. The templates are not legal advice, nor a substitute for it. By accessing any template, you accept these terms and agree that any use is at your own risk.

What is an agency agreement?

When one party authorizes another to act on their behalf — to sell products, negotiate deals, sign contracts, or represent them in a market — that relationship needs a contract. The agency agreement is that contract.

Understanding agency agreements

The party granting the authority is the principal. The party acting on their behalf is the agent. What makes this relationship legally significant is that the agent's actions can bind the principal, meaning that commitments the agent makes within their scope of authority are commitments the principal is held to. That's why getting the agreement right matters more than it might initially seem.

Agency agreements show up across a wide range of commercial contexts.

For example, a US software company expanding into European markets might appoint a local sales agent to represent them. A consumer goods brand might engage a sales rep agency to cover a specific territory. A startup founder might sign with a talent agency or a PR firm operating on their behalf. A manufacturer might use a commercial agent to solicit orders from customers it doesn't have the infrastructure to reach directly.

In each case, the agreement defines how that authority works, what it covers, and what it costs, among other key details.

Agency agreements vs. related contract types

Agency agreements are often confused with, or used interchangeably with, several other contract types. The distinction matters, because the legal consequences are different. Let's run through some distinctions now.

1. Agent vs. distributor

‍A distributor buys products from the principal and resells them independently, taking on the commercial risk of the resale. An agent, by contrast, solicits orders or negotiates on the principal's behalf but doesn't take title to the goods.

This distinction affects liability, revenue recognition, and — in some jurisdictions — statutory protections. If you're looking for a distributor relationship rather than a true agency, a distribution agreement is likely a better fit.

2. Agent vs. independent contractor

‍An independent contractor performs services for the principal but generally doesn't have the authority to bind them in contracts with third parties.

Agency agreements, particularly those granting broad authority, go further. It's worth being specific about the scope of authority in the agreement to avoid unintended liability.

3. Commercial agent vs. employee

In many jurisdictions, including across the EU and in the UK, commercial agents have specific statutory protections that don't apply to ordinary contractors or employees.

In the US, the distinction between an employee and an independent contractor is governed by state and federal law, and misclassification carries real risk.

The structure of the agreement should reflect the nature of the relationship, not just the label the parties prefer.

Non-exclusive vs exclusive agency agreements

An exclusive agency agreement grants the agent exclusive rights to represent the principal in specified transactions or areas. This means the principal cannot appoint another agent for the same purpose during the agreement's term.

On the other hand, a non-exclusive agency agreement allows the principal to engage multiple agents for the same purpose. It's crucial to understand which type you're entering into to ensure both parties' expectations are aligned.

When should you use an agency agreement?

Having an agency agreement template set up and ready to use is one thing, but knowing when to use it is another. You should consider using an agency agreement when you are:

Hiring a sales representative. If you're expanding your business into new territories, you might engage local agents to represent your products or services.
Engaging a real estate agent. When selling or leasing property, an agency agreement defines the terms of the agent's representation and compensation.
Collaborating with talent agents. In the entertainment industry, artists often sign agency agreements to secure representation for bookings, endorsements, and other opportunities.
Outsourcing specific tasks. Businesses might use agency agreements to outsource certain operations, like customer support or marketing, to specialized agencies.
Establishing partnerships. When exploring joint ventures or collaborations, an agency agreement can define each party's roles and responsibilities.

Key elements of an agency agreement

Parties involved. Clearly define the principal and agent, including their roles and responsibilities.
Scope of authority. Detail the agent's powers and limitations when representing the principal.
Compensation. Outline the agent's remuneration, whether it's a commission, flat fee, or a combination.
Duration. Specify the agreement's terms and any renewal provisions.
Termination. Define the conditions under which either party can terminate the agreement.
Confidentiality. Include clauses to protect sensitive information shared during the relationship.
Governing law. State the jurisdiction that will govern any disputes arising from the agreement.

How to manage agency agreements

Agency agreements often sit with sales or commercial teams rather than legal, which means they can end up less well-governed than higher-profile contract types.

The commission tracking, renewal management, and territory monitoring that should flow from a well-structured agency agreement often lives in spreadsheets, email, or — in smaller businesses — nowhere at all.

SaleCycle, a behavioral marketing company managing 650+ commercial contracts a year with a one-person legal team, is a good example of what that friction looks like at scale.

Before implementing Juro, their contracts were "bouncing between five different tools," with sales reps drafting their own clauses and no single source of truth.

As Andrew Elves, their General Counsel, described the before state: "Sales reps were drafting their own clauses to get deals over the line, with no visibility into what these were or how they would impact the business later down the line."

After moving to Juro, turnaround time dropped from up to 90 minutes per contract to five to ten minutes, with templates generated directly from Salesforce.

For businesses managing multiple agency relationships, keeping track of which agreements are exclusive, which territories are covered, when commissions fall due, and when agreements come up for renewal is exactly the kind of visibility a contract repository with AI-extracted data provides. Book a demo to see how it works, or join the community if you'd rather hear how other commercial legal teams approach it first.