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Commission Agreement
I need a commission agreement for a sales representative who will be working on a freelance basis, with a commission structure based on a percentage of sales generated. The agreement should include details on payment terms, confidentiality obligations, and a clause for termination with a 30-day notice period.
What is a Commission Agreement?
A Commission Agreement sets out how and when salespeople or agents will be paid for successfully closing deals in Qatar. It's a legally binding contract that spells out commission rates, payment schedules, and performance targets - typically used by real estate firms, insurance companies, and retail businesses.
Under Qatar's Commercial Code, these agreements must clearly define commission structures, specify when payments become due, and outline any conditions that could affect earning potential. They protect both the company and its sales representatives by establishing transparent terms for performance-based compensation, including how commissions are calculated and what happens if a client cancels or defaults.
When should you use a Commission Agreement?
Use a Commission Agreement anytime you're bringing on sales representatives, brokers, or agents who'll earn performance-based pay in Qatar. This contract becomes essential when structuring compensation for real estate agents, insurance brokers, retail staff, and business development professionals - especially before they start generating revenue.
The agreement proves particularly valuable during rapid business growth, when expanding into new markets, or launching commission-based roles. Under Qatar's Commercial Agency Law, having this formal structure helps avoid payment disputes, protects both parties' interests, and ensures compliance with local labor regulations governing variable compensation arrangements.
What are the different types of Commission Agreement?
- Sales Commission Contract: Core agreement for direct sales teams, detailing commission rates, targets, and payment schedules
- Commission Based Employment Contract: Comprehensive employment terms for staff paid primarily through commissions
- Referral Commission Agreement: Specifically for third-party referral partners and business introducers
- Sales Commission Letter To Employees: Formal notification of commission structure changes or updates
- Salesperson Employment Contract: Blends fixed salary with commission structures for hybrid compensation models
Who should typically use a Commission Agreement?
- Sales Organizations: Companies in Qatar that employ commission-based staff, including real estate firms, insurance agencies, and retail businesses
- Sales Representatives: Individual employees or contractors who earn commissions through successful sales or deals
- Legal Departments: In-house counsel who draft and review Commission Agreements to ensure compliance with Qatar labor laws
- HR Managers: Responsible for implementing and managing commission structures within employment frameworks
- Business Development Teams: Groups managing referral partnerships and commission-based collaborations
- Finance Teams: Staff who calculate, process, and track commission payments according to agreement terms
How do you write a Commission Agreement?
- Commission Structure: Define exact commission rates, payment thresholds, and calculation methods
- Performance Metrics: Outline specific targets, quotas, and measurement periods
- Payment Terms: Determine payment frequency, processing timeline, and handling of advances
- Party Details: Gather complete business information, registration numbers, and authorized signatories
- Legal Requirements: Review Qatar's labor laws on variable compensation and Commercial Agency regulations
- Compliance Check: Our platform generates compliant agreements tailored to Qatar's legal framework
- Review Process: Set up internal approval steps and documentation requirements
What should be included in a Commission Agreement?
- Party Information: Full legal names, commercial registration numbers, and authorized signatories
- Commission Structure: Detailed calculation methods, rates, and triggers for payment
- Payment Terms: Clear timelines, currency, and method of commission disbursement
- Performance Criteria: Specific targets, quotas, and measurement periods
- Territory Definition: Geographic scope and any exclusivity provisions under Qatar law
- Term and Termination: Agreement duration and conditions for ending the relationship
- Governing Law: Explicit reference to Qatar law and jurisdictional requirements
- Dispute Resolution: Local arbitration or court procedures as per Qatar regulations
What's the difference between a Commission Agreement and an Agency Agreement?
A Commission Agreement differs significantly from an Agency Agreement in several key aspects, though both involve business relationships in Qatar. While Commission Agreements focus specifically on performance-based compensation, Agency Agreements establish broader representative authority and responsibilities.
- Scope of Authority: Agency Agreements grant legal power to represent the principal in business dealings, while Commission Agreements only outline payment terms for sales achievements
- Legal Framework: Agency Agreements fall under Qatar's Commercial Agency Law with strict registration requirements, while Commission Agreements operate under general contract and labor laws
- Duration and Commitment: Agency Agreements typically involve long-term, exclusive relationships, whereas Commission Agreements can be more flexible and project-specific
- Protection Level: Registered agents enjoy stronger legal protections in Qatar, including compensation for termination, while commission-based relationships offer fewer statutory safeguards
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