What is an agency fee and how is it paid? How to draw up an agency agreement?

Remuneration under an agency agreement is a source of income for the agent. In order to receive the expected amount of money from the principal and protect yourself from possible risks, it is necessary to correctly formulate the remuneration condition. For example, you need to insist on including in the contract a condition on the payment of an advance or the right to withhold remuneration from the amount received from a third party. It is advisable to provide for the possibility of additional profit on transactions with third parties.

If the amount of remuneration is not set, the agent will not be able to receive the expected amount. If the remuneration is calculated in a complex way (for example, it depends on the amount of income and expenses of the principal), then the likelihood of errors in the calculation will increase. If the procedure for paying remuneration is not established, the agent will receive funds only after he submits a report on the actions performed.

○ What is an agent's fee?

Agency fee is the amount that an agent receives for providing the principal with the services specified in the contract.

A remuneration clause must be included in the agreement.

“The principal is obliged to pay the agent remuneration in the amount and in the manner established in the agency agreement.” (Article 1006 of the Civil Code of the Russian Federation).

If the agent's labor price is not specified, then his services are still paid. The amount of remuneration in this case is determined based on the cost of similar services in the region where the counterparties operate.

“In cases provided for by law, prices (tariffs, rates, rates, etc.) established or regulated by authorized state bodies and (or) local government bodies are applied.” (Clause 1 of Article 424 of the Civil Code of the Russian Federation).

Although the agent is guaranteed remuneration under all circumstances, failure to include a payment clause is extremely disadvantageous to him. If the amount of remuneration cannot be determined at the conclusion of the contract, it is advisable for the agent to insist that the amount to be paid is determined by the parties in additional agreements based on the results of providing reports to the principal on agency activities.

In addition, the contract specifies the procedure for payment of remuneration; if it is not provided for, then it is considered that the principal is obliged to pay for the agent’s services within a week from the date of provision of the reporting documentation.

“If there are no conditions in the agreement on the procedure for paying the agent’s remuneration, the principal is obliged to pay the remuneration within a week from the moment the agent submits to him a report for the past period, unless a different procedure for paying the remuneration follows from the essence of the agreement or business customs.” (Article 1006 of the Civil Code of the Russian Federation).

Responsibility

The sales agent monitors the fulfillment of the obligations of the parties - the supplier and the buyer. This means that his tasks also include collecting payments.

For example, the goods have been delivered, but the client says that payment can only be made in the evening. The sales agent waits for the allotted time and goes to collect the money.

Thus, his day can end at 6, 8, or even 10 pm. It should be remembered that a sales agent is a financially responsible person.

Expert opinion

Volkov Viktor Vladimirovich

Lawyer with 8 years of experience. Specialization: civil law. More than 3 years of experience in developing legal documentation.

This is mentioned in the contract that he concludes with the employer. The specialist bears property liability for shortages, unpaid deliveries on time, etc.

○ How to conclude an agency agreement?

Agency agreements, depending on the types of instructions to agents, may have some features, but in general they have a standard set of details.

✔ Information about the parties, place and time of conclusion of the contract.

This is mandatory information for any contract, since without it it is impossible to establish business relations between counterparties, challenge an agreement, or determine jurisdiction. Thus, each contract must have:

Name and number.
The place of detention is written on the left under the name.
The date of conclusion is indicated on the right under the title.
Information about the parties - who is the principal and who acts as the agent.
Contact details are recorded at the end of the document.

✔ Subject of the agreement.

The subject matter is one of the most important terms of the agreement. The subject in our case may be the performance of legal and other actions by an agent on his own behalf or on behalf of the principal. It is also necessary to specify the subject - providing a specific service, work, assistance. For example, purchasing equipment, searching for a market, selling goods.

✔ Rights and obligations of the parties.

Rights and obligations are prescribed based on the subject of the transaction.

The principal always owns the rights:

Request a report on the agent's work.
Require that the agent, when concluding transactions with third parties, does not deviate from the standard agreements of the principal.
Require that the agent not enter into agency agreements with anyone else.
Determine the categories of goods with which the agent works.
Identify key counterparties with whom the agent enters into contracts in favor of the Principal, and establish territorial restrictions.
Demand compensation for damage for failure to preserve transferred valuables.
Raise objections to the agent's report.

Agent Rights:

Demand remuneration for work.
Demand full compensation for expenses incurred in connection with the fulfillment of the obligation.
Request the required amount of information from the agent.

The rights correspond to the corresponding obligations of the parties.

✔ Procedure for remuneration and reporting.

As already mentioned, the contract must define how much the agency fee costs.

Since the agent’s remuneration and reimbursement of expenses are calculated based on the work done, the agent submits a report to the principal at certain time intervals.

“During the execution of an agency agreement, the agent is obliged to submit reports to the principal in the manner and within the time limits provided for by the agreement. If there are no relevant conditions in the contract, reports are submitted by the agent as he fulfills the contract or upon termination of the contract.” (Clause 1 of Article 1008 of the Civil Code of the Russian Federation).

✔ Force majeure and disputes.

No one is immune from the occurrence of unforeseen difficulties that exclude the possibility of fulfilling contractual terms. In view of this, it is necessary to stipulate in contracts the occurrence of what circumstances releases the parties from fulfilling their obligations under the transaction, how to confirm the occurrence of these events and in what period the parties must warn the counterparty about them.

It is also recommended to specify the procedure for resolving disputes in the contract. In this case, you need to choose an independent person, authoritative for both parties, whose decision will be fundamental to resolving the conflict.

✔ Sample contract.

An agency agreement for the purchase of goods may look like this:

(2534 downloads)

The contract specifies the main points mandatory for this type of agreement. The sample document can be used in business activities by inserting your data and changing the subject of the agreement.

In addition to the purchase of goods, the contract may also stipulate other responsibilities of the agent.

Strengths of a specialist

The following qualities are important in the work of sales agents:

Cheerfulness. Specialists, as a rule, perfectly understand the essence of their activities. A positive outlook helps them communicate effectively with clients. In those phenomena where others see only problems, experts notice advantages. This helps to quickly search and find solutions to various problems.
Energy. This quality is of particular importance for a sales agent. Specialists can take on complex tasks and, by solving them, inspire others. Sales agents can work long hours and very intensely. This distinguishes them from specialists in other fields.

Non-conflict and stress resistance. The job of a sales agent involves communicating with people. Clients are not always in a good mood. This must be taken into account when building interaction.
Logical thinking. The ability to analyze a situation and draw the right conclusions allows you to make the right decisions and find an individual approach to different clients. This, in turn, ensures success.

○ How is the amount of remuneration determined?

There are several ways to determine the cost of an agent's services.

Firm bet. It is set in the form of a specific remuneration amount. For an agent, this situation can be twofold. On the one hand, he can be sure that he will receive the specified amount, on the other hand, no reward is expected for quality work done, for example, for concluding a contract with a third party on more favorable terms than expected.
As a percentage of a transaction with a third party. It is beneficial to establish such a remuneration when it comes to the agent’s search for buyers to sell the principal’s products. If the agent is required to perform other actions, an agreement is concluded on mixed terms: in the form of a fixed rate and a percentage.
Payment of the difference between the amount specified in the contract and the amount of the transaction concluded in fact. At the same time, the agent must be sure that he will be able to convince a third party to enter into an agreement on more favorable terms than the principal would do.
Other ways. Other options for determining the payment amount may be established. For example, depending on the principal's profit.

Positive points

The positive aspects of the agreement include saving effort and time, because you do not have to go to various authorities on your own, stand in queues, run to banks and notaries.

The entire process is already carried out by the agent.

If you do not want to advertise your achievements, rights to land or other resources, you can enter into an agreement in which the agent will act on his own behalf, and not on your behalf.

Then in all databases he will appear as a tenant, landlord or in another status.

○ Advice from a lawyer:

✔ What to do if no deductions have been made under the agency agreement? Reports were submitted on time, but there was no reward.

The agent's services are always paid, so he can file a claim against the principal in court. But before starting a dispute, it is advisable to write a claim to the counterparty, demanding payment of the amount due.

✔ Can such an agreement be concluded remotely?

Yes. Nowadays, many contracts are concluded in this way. To do this, it is necessary to reflect in the agreement the provision that it comes into force after affixing seals by both parties. First, one party must put its stamp and signature of the manager, then the documents are scanned and sent to the counterparty, who in turn puts a seal and sends the finished documents to the first party. As a result, both the agent and the principal must have agreements with seals and signatures of both parties.

Video

Specialist Yuri Baykov will tell you in detail what an agency agreement is and how to draw it up correctly.

Published by: Vadim Kalyuzhny , specialist of the TopYurist.RU portal

Employers' opinions

Many employers believe that specialists do not need any special training. A sales agent learns all the necessary skills in the process of performing assigned tasks independently.

There is, however, another opinion. Employers, in particular, note that all the tasks that a sales agent performs, the responsibilities, capabilities of a specialist, as well as the intricacies of communicating with clients and establishing interaction between them require careful explanation.

Employee training, according to these employers, is a rather serious process. They believe that every sales agent should undergo training.

The duties of a specialist require not only creative, innovative thinking, but also certain knowledge. In particular, employees must understand many of the psychological subtleties of human nature, technical characteristics of products, requirements for drawing up contracts, and so on.

What are the disadvantages of being an agent?

There are a lot of them too.

No guaranteed salary.
No right to leave.
Lack of payment due to temporary disability (in other words, you have to get sick solely at your own expense).
The risk of the principal not recognizing the transaction.
In the event of termination of the contract, payments are made only for work actually performed; compensation for reduction is not provided.
Contributions to the Social Insurance Fund for subsequent payments in connection with unemployment, accidents, and parental leave are mandatory if provided for by agreement of the parties.

pros

Free work schedule . For most people, especially young people, this point is key. The ability to independently plan your workday and not push yourself into tight time frames is a very convincing argument. Of course, sometimes you still have to attend certain meetings, trainings, and other events necessary to perform your duties efficiently.

Form of payment . This point can be attributed to both the pros and cons of the contract. If you do not like to sit in the office allotted hours and look forward to the end of the working day in order to receive the salary agreed upon in the employment contract, then working as an agent is definitely suitable for you. Payment under an agent agreement implies payments for the amount of work performed. This is a good incentive for people who have an active lifestyle and a desire to earn money. We can say that the upper limit of earnings is determined by the agent himself, as well as the lower one.

Possibility of additional income . This type of contract allows you to have several jobs and, accordingly, several sources of income.

No work-out in case of contract termination . As you know, when leaving a job, an employee who has entered into an employment contract is obliged to work for a certain time, usually 2 weeks. The terms of the agency agreement provide for its termination without similar obligations.

Formation of your own base of potential clients . It is quite possible that as time passes, you will want to engage in certain activities not as an agent, but on your own. By interacting with a variety of different people, you can gain the right connections and the right client base.

No need to invest your own funds . The principal finances the agent and pays him a certain percentage of the transaction amount. If you are an agent for the sale of any product, then you do not need to invest your own funds in its purchase; the customer purchases the product himself and provides it to the agent for sale.

There is no need to observe labor discipline . There is no need to follow the internal labor regulations of the organization, adhere to the dress code and do other not so pleasant things. For example, getting up early in the morning when you really want to sleep, and riding in crowded public transport to a job you don’t really like.

Penalty for non-use of cash registers

Responsibility for non-use of cash registers is established in Article 14.5 of the Code of Administrative Offenses of the Russian Federation.

The amount of the fine depends on the revenue that was not recorded through the cash register (Part 2 of Article 14.5 of the Code of Administrative Offenses of the Russian Federation). Thus, for non-use of CCT the following will be fined:

cashier - in the amount of 1/4 to 1/2 of the unaccounted amount, but not less than 10,000 rubles;

organization - from 3/4 to one size of the amount of the “unbroken” purchase, but not less than 30,000 rubles.

Repeated non-use of cash registers will be punished more severely only if the amount of payments past the cash register amounted to 1 million rubles or more (Part 3 of Article 14.5 of the Code of Administrative Offenses of the Russian Federation).

The head of the company can be disqualified for a period of one to two years, and the activities of individual entrepreneurs and organizations can be suspended for up to 90 days.