The Direct Sales Agreement is a crucial document for companies operating direct selling businesses in Malaysia. It must comply with the Direct Sales and Anti-Pyramid Scheme Act 1993 and other relevant Malaysian legislation, including consumer protection and data privacy laws. This agreement is essential when establishing formal relationships with direct sellers who will market and sell products directly to consumers. It covers critical aspects such as licensing requirements, mandatory cooling-off periods, commission structures, territorial rights, and compliance obligations. The document is particularly important for companies in consumer goods, health and wellness, and similar sectors where direct selling is a common distribution model. It should be regularly reviewed and updated to ensure continued compliance with evolving Malaysian regulations.
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1. Parties: Identification of the Direct Sales Company and the Direct Seller, including registration/license numbers
2. Background: Context of the agreement and brief description of the direct sales business
3. Definitions and Interpretation: Definitions of key terms used throughout the agreement
4. Appointment and Territory: Terms of appointment as direct seller and defined sales territory
5. Duration and Cooling-off Period: Term of agreement and mandatory 10-day cooling-off period as per Malaysian law
6. Direct Seller Obligations: Core responsibilities including sales conduct, reporting, and compliance requirements
7. Company Obligations: Company's commitments regarding product supply, training, and support
8. Products and Pricing: Details of products to be sold and pricing structure
9. Commission Structure: Detailed breakdown of commission calculations and payment terms
10. Marketing and Promotion: Guidelines for marketing activities and use of company materials
11. Compliance with Laws: Obligations to comply with direct sales, consumer protection, and other applicable laws
12. Confidentiality: Protection of confidential information and trade secrets
13. Data Protection: Compliance with Personal Data Protection Act 2010 requirements
14. Termination: Grounds and procedures for termination of the agreement
15. Post-Termination Obligations: Obligations and restrictions following agreement termination
16. General Provisions: Standard contractual provisions including notices, amendments, and governing law
1. Performance Targets: Include when specific sales targets are required as condition of continued appointment
2. Training Requirements: Include when mandatory training programs are part of the arrangement
3. Inventory Requirements: Include when direct seller must maintain minimum stock levels
4. Digital Platform Usage: Include when sales involve use of company's digital platforms or apps
5. Insurance: Include when specific insurance coverage is required
6. Non-Compete: Include when restricting involvement with competing businesses
7. Downline Structure: Include for multi-level marketing arrangements
8. International Sales: Include when cross-border sales are permitted
1. Schedule 1: Product List: Comprehensive list of approved products for sale
2. Schedule 2: Commission Structure: Detailed commission rates, bonuses, and calculation methods
3. Schedule 3: Territory Map: Geographical definition of assigned sales territory
4. Schedule 4: Marketing Guidelines: Approved marketing practices and materials
5. Schedule 5: Code of Conduct: Required standards of business conduct
6. Appendix A: Registration Forms: Required forms for direct seller registration
7. Appendix B: Training Manual: Basic training requirements and procedures
8. Appendix C: Return Policy: Procedures for product returns and refunds
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