This Percentage Agreement Contract is designed for use in Malaysia when parties wish to establish a commercial relationship based on percentage calculations of revenue, sales, or other defined metrics. The document is commonly used in various business arrangements including commission-based sales, revenue sharing, royalty agreements, and performance-based compensation structures. It ensures compliance with Malaysian legal requirements while providing a clear framework for calculating percentages, making payments, and maintaining proper records. The agreement is particularly relevant in today's dynamic business environment where flexible compensation and revenue-sharing models are increasingly common. It includes essential provisions for audit rights, dispute resolution, and termination, all aligned with Malaysian commercial law principles.
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1. Parties: Identifies and provides full details of the contracting parties
2. Background: Sets out the context and purpose of the agreement
3. Definitions and Interpretation: Defines key terms and establishes interpretation rules
4. Scope of Agreement: Outlines the basic arrangement and relationship between the parties
5. Calculation of Percentage: Details how the percentage will be calculated, including the base amount definition
6. Payment Terms: Specifies payment timing, method, and currency
7. Records and Audit Rights: Sets out requirements for maintaining records and rights to audit
8. Representations and Warranties: Standard warranties from both parties
9. Term and Termination: Duration of agreement and termination provisions
10. Confidentiality: Protections for confidential information
11. Governing Law and Jurisdiction: Confirms Malaysian law applies and jurisdiction for disputes
12. General Provisions: Standard boilerplate clauses including notices, amendments, etc.
1. Intellectual Property Rights: Include when the percentage agreement involves licensing or use of IP
2. Minimum Guaranteed Payments: Include when there's a minimum payment guarantee regardless of percentage calculation
3. Performance Obligations: Include when specific performance standards must be met
4. Territory Restrictions: Include when the agreement is limited to specific geographic areas
5. Marketing and Promotion: Include when parties have specific marketing obligations
6. Force Majeure: Include when parties want specific provisions for unforeseen circumstances
7. Non-Competition: Include when restricting parties from competing activities
8. Assignment and Sublicensing: Include when transfer rights need to be specifically addressed
1. Schedule 1 - Calculation Methodology: Detailed formula and examples of percentage calculations
2. Schedule 2 - Payment Details: Bank account and payment processing information
3. Schedule 3 - Reporting Template: Standard format for regular financial reporting
4. Schedule 4 - Key Performance Indicators: Metrics and targets if performance-based elements exist
5. Schedule 5 - Excluded Items: List of items excluded from percentage calculations
6. Appendix A - Required Documents: List of documents required for verification and audit
7. Appendix B - Contact Details: Key contact persons and their details for both parties
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