Consultancy agreement for a sales consultant on commission

A sales consultant paid on commission is engaged to bring in business and paid only when they do, which makes the definition of a sale, the moment commission is earned and the treatment of deals that close after the consultant leaves the whole of the agreement. It also has to say whether the consultant is a commercial agent with the statutory rights that status carries, what authority the consultant has to commit the business, and on what basis the consultant is engaged. Acting for the client or for the consultant, I draft it for £595 fixed and deliver within five working days. The agreement describes a self-employed engagement; HMRC's Check Employment Status for Tax tool decides status case by case, and no drafting guarantees it.

Who this is for

Businesses in England and Wales engaging freelance salespeople, business development consultants or introducers on commission, and consultants who sell for several businesses and want an agreement that secures their commission.

What matters in a commission-based sales consultant's agreement

What the consultant does and does not do

The agreement should define the role: identifying prospects, presenting the business's products or services, negotiating within parameters the business sets, and passing orders to the business for acceptance, or merely introducing prospects, with a territory, a product range and any targets; it should say that the consultant does not accept orders, give warranties, agree terms outside the parameters, collect money or hold stock unless the agreement expressly allows it, and that all contracts are between the business and the customer.

Commission, when it is earned and how it is calculated

The agreement should define commission as a percentage of the net invoiced value (excluding VAT, discounts, returns and credit notes) of sales to customers the consultant introduced or negotiated, say when it is earned (on the customer's payment, not on order), how it is calculated and reported, when it is paid, the clawback where the customer does not pay or cancels, the treatment of repeat orders and renewals, and how commission is shared where another salesperson was involved; interest under the Late Payment of Commercial Debts (Interest) Act 1998 applies to commission the business pays late.

Whether the consultant is a commercial agent

A self-employed intermediary with continuing authority to negotiate the sale of goods on the business's behalf is a commercial agent under the Commercial Agents (Council Directive) Regulations 1993, with rights to information, to commission on transactions concluded during and after the agency, to minimum notice, and to compensation or an indemnity on termination under regulation 17 that cannot be excluded; the Regulations do not apply to agents for services. The agreement should say which the arrangement is, and where the consultant is a commercial agent, should comply with the Regulations rather than attempt to contract out of them, with the choice between compensation and indemnity made expressly.

No authority to bind, and the sales rules

The agreement should state that the consultant has no authority to bind the business except within written parameters, that the business may refuse any order, that the consultant must represent the products accurately and comply with Part 4 of the Digital Markets, Competition and Consumers Act 2024 where selling to consumers, with the Privacy and Electronic Communications (EC Directive) Regulations 2003 on marketing calls and messages, and with the Bribery Act 2010 in dealings with prospects' staff, and that the consultant uses the business's approved materials and prices.

Status and the obligation to pay only on results

A consultant paid only on results, free to work for other non-competing businesses, working their own hours from their own premises with their own equipment, and under no obligation to achieve a minimum activity, is self-employed in substance, and the agreement should record those features; a consultant required to attend the business's office, work set hours and report daily under a manager is closer to an employee whatever the agreement says, with the rights under the National Minimum Wage Act 1998 and the Working Time Regulations 1998 that a worker has. Where the consultant works through a company for a medium or large client, the off-payroll working rules in Chapter 10 of Part 2 of the Income Tax (Earnings and Pensions) Act 2003 apply to the determination, made with HMRC's tool.

Termination, accrued commission and restrictions

The agreement should run until terminated on notice, with commission on sales introduced before termination paid for a stated period after it or on orders accepted within a stated window, which for a commercial agent the Regulations require in any event; it should impose confidentiality on customer and pricing information, a non-solicitation of customers the consultant dealt with for a reasonable period, and a non-compete only if the business can justify one, drafted no wider than its legitimate interest, with the consultant's own liability limited to the commission received and the business's customer data handled under the UK GDPR as the business's controller data.

What it costs

Consultancy or contractor agreement, £595. Drafted for your business. Five working days.

Template set for repeat use, £895. One master agreement plus a short-form schedule you can reuse for every engagement. Five working days.

Buying online forms the engagement on payment. The scope is what the consultancy and contractor agreements page describes, you accept the Terms of Service at checkout, and I email you within four working hours to get started. If you would rather ask something first, email me.

What you get

• A clear, express assignment of intellectual property to your business
• Confidentiality provisions that protect your business information
• Restrictive covenants drafted at a scope a court will uphold
• Clear treatment of status, so the arrangement is not accidentally something else
• Payment, deliverables and termination provisions that match how you work
• A reusable structure, so the next engagement costs you nothing

What is not included

• Employment status determinations and off-payroll working assessments, which need your accountant
• Tax advice
• Disputes with a contractor you have already engaged
• Immigration and right to work compliance

Questions I am often asked

Our consultant introduced a customer who ordered three months after the consultant left. Is commission due?

If the agreement provides for commission on orders within a stated window after termination, yes; if the consultant is a commercial agent, the Regulations require it for transactions mainly attributable to their efforts. The agreement sets the window.

Do we have to pay compensation when we end a commission-only agreement?

If the consultant is a commercial agent selling goods, yes, by compensation or indemnity, and it cannot be excluded. If the consultant sells services, the Regulations do not apply and the agreement governs. The agreement says which.

Can we require the consultant to work exclusively for us?

You can, but exclusivity with set hours and close control makes the arrangement look like employment, and the consultant may be a worker with minimum wage and holiday rights. The agreement reflects the degree of freedom the business is prepared to give.

Related guidance and services

• Consultancy and contractor agreements, £595, the service this page describes
• Contract review, £495
• Employment contracts and handbooks, £595
• Referral partner agreement for a SaaS business

This page is general guidance for businesses in England and Wales, not advice on your own circumstances. Last reviewed: October 2026. Email geoffrey@caesar.co.uk.