This commissionaire agreement template is used in an intercompany transaction between a principal and commissionaire. The commissionaire undertakes the typically sales and marketing functions to sell products in its own name, but on behalf of the principal owning these products. These functions include but are not limited to preparation of marketing plans, selecting prospective customers, providing sales forecasts and solicit, negotiate the terms of and enter into sales arrangements with customers. The principal, as a rule, ships and invoices the customer directly (commissionaire does not acquire title to the products).

The commissionaire will only incur limited risks. In essence, it only incurs the risks that relate to the sales and marketing operations it is engaged for by principal. Typical risks that are borne by the principal under this commissionaire agreement template are inventory, bad debt, warranty and currency risk.

The commissionaire does not undertake entrepreneurial activities which would result in the development of marketing intangibles. The Appendix to the agreement template also contains an extensive example on the calculation of the at arm’s length margin for the commissionaire’s functional and risk profile.

This agreement template is used to state the rights and responsibilities and to substantiate the at arm’s length character of the transaction between a typical principal and commissionaire. Common terms in this agreement template inter alia cover the duties of commissionaire, title and storage, customer invoicing, commissions, insurance, record keeping, confidentiality, indemnification and termination.