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Commission Split Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

Commission Split Agreement

"I need a Commission Split Agreement for my Saudi-based real estate company to establish a 60-40 commission sharing arrangement with independent property agents, including performance targets and monthly payment terms."

What is a Commission Split Agreement?

The Commission Split Agreement is essential for businesses operating in Saudi Arabia that wish to formalize arrangements for sharing commission earnings. This document is particularly relevant when multiple parties contribute to generating sales or business opportunities and need to agree on how resulting commissions will be divided. The agreement must comply with Saudi Arabian commercial law, including the Commercial Agencies Law (Royal Decree No. M/11) and relevant Sharia principles governing financial transactions. It typically includes detailed provisions for commission calculations, payment mechanisms, reporting requirements, and dispute resolution procedures. The document is commonly used in various commercial contexts, from real estate transactions to distribution arrangements, and must be structured to ensure enforceability within the Saudi legal framework while protecting all parties' interests.

What sections should be included in a Commission Split Agreement?

1. Parties: Identification of all parties to the agreement, including full legal names, addresses, and commercial registration details

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

3. Definitions: Key terms used throughout the agreement, including 'Commission', 'Gross Revenue', 'Territory', etc.

4. Appointment and Scope: Details of the commercial relationship and scope of activities covered by the commission arrangement

5. Commission Structure: Definition of commission rates, calculation methodology, and qualifying transactions

6. Payment Terms: Timing and method of commission payments, currency, and payment procedures

7. Reporting and Documentation: Requirements for sales reporting, documentation of transactions, and record-keeping obligations

8. Duration and Termination: Term of the agreement and circumstances under which it may be terminated

9. Confidentiality: Protection of confidential information and trade secrets

10. Compliance with Laws: Obligations to comply with Saudi laws, including anti-corruption and Sharia principles

11. Dispute Resolution: Process for resolving disputes, including jurisdiction and applicable law

12. General Provisions: Standard clauses including notices, amendments, and entire agreement provisions

What sections are optional to include in a Commission Split Agreement?

1. Non-Competition: Restrictions on competing activities, used when parties want to prevent competition during and after the agreement

2. Territory Exclusivity: Defines exclusive geographic areas or market segments, included when territorial rights are granted

3. Performance Targets: Minimum performance requirements and consequences for not meeting them, used for performance-based arrangements

4. Training and Support: Obligations for training and operational support, included when one party provides support to the other

5. Insurance Requirements: Specific insurance coverage requirements, included for high-risk activities or when required by Saudi regulations

6. Intellectual Property: IP rights and usage terms, included when branding or proprietary materials are involved

7. Force Majeure: Provisions for unforeseen circumstances, particularly relevant in long-term arrangements

What schedules should be included in a Commission Split Agreement?

1. Commission Rates Schedule: Detailed breakdown of commission rates for different products, services, or customer categories

2. Territory Definition: Detailed description of geographic areas or market segments covered by the agreement

3. Calculation Examples: Examples of commission calculations for different scenarios to avoid misunderstandings

4. Reporting Ƶ: Standard forms and formats for regular commission reports and documentation

5. Compliance Procedures: Detailed procedures for ensuring compliance with Saudi laws and regulations

6. Key Performance Indicators: Metrics and measurement methods for evaluating performance

7. Authorized Representatives: List of authorized representatives from each party who can act under the agreement

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

























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Relevant Industries

Real Estate

Insurance

Financial Services

Retail

Technology Distribution

Manufacturing

Professional Services

Automotive

Construction

Healthcare

Telecommunications

Energy

Import/Export

Relevant Teams

Sales

Business Development

Legal

Finance

Compliance

Operations

Commercial

Partnerships

Revenue

Channel Management

Contract Administration

Relevant Roles

Sales Director

Business Development Manager

Commercial Director

Chief Revenue Officer

Channel Manager

Sales Agent

Regional Manager

Account Executive

Partnership Manager

Legal Counsel

Compliance Officer

Finance Director

Contract Manager

Operations Manager

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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