Sample Sales Promoter Agreement Format

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Sales Promoter Agreement


This Agreement Executed at ……. on this _________, 2013, applicable retrospectively with effect from ________, 2013.

M/S  ____________________, a Company incorporated under the Companies Act 1956, and having its Regd. office at ___________________________________ with its Steel Manufacturing works at ___________________________________________ and Central Marketing office at _______________________________________________________________, (hereinafter referred to as “the Company” which expression shall, unless it be repugnant to the subject or context thereof include its successors and assigns) or the Party of FIRST PART


M/s ___________________, a Proprietor/Partnership firm, having its principal place of business at ________________________________________________, ________   and represented through Shri _____________________, S/o ________________________, (Proprietor/Partner) (Hereinafter referred to as “Sales Promoters in short SP”, which expression shall, unless it be repugnant to the subject or context thereof include its successors and assigns) or the Party of SECOND PART”


The Company Manufactures and sell HR Coils, under the registered trade mark in the name of _____________________ (The Steel) is having its plant in the state of Mumbai as at __________.

The Company is producing the HR Coils of various grades and market its HR Coils produced under brand of “____________________” and for the said purposes, the Company has decided to establish or expand its marketing network and depots in various States in India.
Shri __________________, S/o _____________________, a Proprietor/Partner of M/s ___________________ had approached the company to get itself associated,  indicated having sound financial background, having sufficient experience in the similar field in the past in organizing and  promoting the brand and enhancing the business, in dignified manner.

In order to enhance the business of the company, he has agreed to select, approve and recommend the company, suitable parties having himself fully satisfied as to their potential, financial background and good credentials to be appointed as dealers/stockist (i.e. Dealers/ Stockists) for company’s products in his/their area of operation and also agrees to stand surety/ guarantee for collection and recovery of all dues and charges and requisite concessional forms (if any), or differential amount as against with interest upto, within a stipulated period and in failure to do so, has undertaken to make good same from his own resources.

The Company has accepted the request, and agreed to appoint M/s ___________________, as Sales Promoters, for marketing its products in the area described as per schedule attached herewith “A” (Area/City/town/District/Region) ______ district in the State of Mumbai through net work of dealers/Stockiest categorized as “Trade Sales” in the marketing parlance and M/s ___________________ has agreed to act as such, subject to the terms and conditions agreed between the parties, as set out hereunder:


1          Appointment and duration

1.1        The Company hereby appoints M/s ___________________, as one of the “Sales Promoters” of the Company for “____________________” Brand for the territory of/at as per schedule attached herewith “A” (Area/City/town/District/ Region-specify territory) and having their main office at __________________________________________.

1.2          The appointment of SP is valid for the period of 2 (Two) years effective from               __.__.2013 to __.__.2015, which may be extended/ executed further for a similar period or for such period as may be mutually agreed. This agreement can be terminated by giving one month notice from either side.  However, the Company reserves the right to terminate this agreement without any notice for breach of any of the terms and conditions thereof and without any compensation.

2.         Security deposit and interest

2.1          The “Sales Promoters” has agreed to Deposit with the company an amount of 25.00 Lac as Security Deposit for due satisfactory performance of this Agreement in the form and in the manner acceptable to the Company. The Company is at liberty to enhance the amount of Security Deposit at any time, during the tenure of the agreement. The Security Deposit made by “SP” in Demand draft or Cheque will bear the interest @ 14% per annum, which is subject to change by Company without any prior intimation. The payment of Interest will not accrue as payable if the SP fails to conducts reasonable business as undertaken under this agreement. The payment of interest is subject to applicable TDS as may be in force from time to time.

2.2        The Company shall be at liberty to adjust the outstanding of whatsoever liability of dealer/stockist to which the SP undertaken to stand by the surety/guarantor for timely payment for the supplies, while recommending the company to appoint. The Interest payment shall payable only on the balance amount of security deposit, if any.

2.3      The SP shall not be entitled to claim any supplies against such deposit and shall pay separately the amount due against supply of HR Coils. However  in case the SP/ its subsidiary or associates companies/sister concern has defaulted for any payment due to the company, the company shall be free, to set-off and adjust same from the security deposit of SP.

3.            Documents relating to the Sales Promoters – and associated dealer/ stockiest, Credentials and financial

3.1          The “Sales Promoters” has agreed to provide to the Company the complete particulars of constitution of his concern/firm/company, including certified copy of the Partnership Deed/ Memorandum/Articles of Association, as applicable, Income Tax PAN numbers with the return under Income tax and/ or other relevant proof evidencing the financial strength, VAT Registration nos. of the state, proof of address of all the partners/directors or any other documents required by the Company and shall intimate promptly any changes therein with documentary evidence thereof so as to make it updated.

  1. Sales Promoters- Obligations
4.1         The “Sales Promoters” is authorized to handle the activities and book orders for HR Coils in the allotted areas for and on behalf of the company from associated stockists/dealer. The SP shall devote full time and its best efforts to promote the sales of its HR Coils and shall plan to procure/give order of require quantity regularly. The dispatches of HR Coils will be made from the factory or from godown/depot as per logistic requirement and actual supply of HR Coils shall however depend upon overall availability of HR Coils with the company and no claim in this respect shall be entertained.

4.2        The “Sales Promoters” shall employ required number of relevant and experienced field personnel, who will work exclusively and devote full time and efforts to promote company’s products. The Sales Promoters shall provide to its employees, all the informative communication systems like mobile phones etc. to make them always and easily accessible to others and also deploy necessary office staff for preparing documents, keeping records, collection of payments & deposit of cheques, reconciliation of accounts etc.

4.3        The SP shall recommend and forward the applications of prospective Stockiest/Dealers having sound financial background, experience and credentials in trade, in consultations with the company’s representative subject to meeting all eligibility criteria(s) as per prevalent company’s policy/ guidelines and shall arrange to collect and deposit with the company minimum of Rs.1500000/- in urban areas and Rs.1000000/- in Rural areas or such higher sum, in that respect, as fixed by the company, from time to time, as security deposit from each of them.

4.4        The Company shall pay the interest @ 12% per annum on the security deposit to the Stockist/Dealers which are subject to change by Company without any prior intimation and same shall be liable to be adjusted against any dues of the company.

4.5        The SP shall remain in constant touch with the Stockist/Dealers and shall render all necessary help and guidance to them for continual improvement in market share, realization, customers’ satisfaction and brand image of the product. The SP shall not appoint any of his direct family members as Stockist/Dealers without prior written approval of the Company.

4.6        The SP will procure order(s)/ for HR Coils as per the approved rates in writing from the company's competent authority. The Supply Orders are to be procured by SP from time to time on terms and conditions of staggered delivery of material, but on agreed and approved prices by the Company’s Competent Officer.

4.7        The Sales Promoters shall keep proper record as required by respective VAT Authorities or any other Govt. Authority and shall send daily report of orders procured, deliveries made and amount received to the concerned office of the company and keep them updated on all the development in the market/trade.

4.8        The SP or their representative and staff shall be fully responsible to ensure that cheques/drafts are received from the parties in the name of the company only and are credited in correct account of the Company promptly, in case of any wrong deposit/ loss of any cheque/draft the SP shall be fully responsible for all consequences arising out of the same and shall make good to the company value thereof. The SP shall make monthly reconciliation of bank account and reconciliation of sales, collection and outstanding of the Sales Promoters account and send the same to the company within five days of the subsequent month.  The SP shall maintain the books as per ISO norms. The company shall also provide the statement of account of the customers periodically and it is the responsibility of SP to obtain the copy of account from the company’s office and to   reconcile these and after obtaining balance confirmation, to send the original statement to office of the Company.

4.9         As per Company’s policy, it is clearly understood by Sales Promoters that all sales shall be on against payments made by cheque/DD in the name of the company and that the SP as well as all the authorized Stockist/Dealers shall be normally making payment towards value of HR Coils and all other related charges i.e on taking delivery.

4.10       If any authorized stockiest/dealers is not in a position to adhere to the payment terms due to temporarily liquidity crunch or due to any other reason, then if supply are to be made to such parties , the SP will be required to make the payment to the company so as to comply with stipulated payment terms.

4.11       The Sales Promoters shall be responsible for collections of declaration forms for sale of HR Coils to the buyers at concessional rate of tax (if any) & if such forms are not collected within 30 days, the additional liability including interest & penalty, if any shall be recovered from Sales Promoters.

4.12       However it is clearly understood between the parties hereto that on “SP” making payment on behalf of such Stockist/Dealers, the incentive related to timely payment/ Cash Discount in respect of said quantity/ value shall be credited to the “SP” and the concerned Stockist/Dealers will have no right whatsoever to claim same again from the company in respect of same transaction.

4.13       The Company or its handling agent will prepare the Invoice and delivery Challans for the goods supplied to the Stockist/Dealers, in their respective name(s) as per applicable law. The Company would send the invoices and the Account reflecting the all the entries of business conducted to the dealer concern for the supplies executed to him. In this regard, the SP concerned is also under obligation to verify the account of all the dealers from the local regional office of the company from time to time. The company would not be responsible, if the SP fails to point out the error or omission within 10 days of closure of month.

4.14       However, in case the company assigns the right of recovering the outstanding sum from the defaulting stockist/dealer to the SP, he shall be solely responsible for collecting payment through legal mode for and on behalf of the Company from Stockist/Dealers, in the name of “____________________” through Account Payee cheques/ demand draft and deposit the same in company’s bank account immediately. In no case Company Staff will be involved or held responsible for any transaction related to the payment of the supplies or order booked.  

4.15       No payment shall be collected and no payment shall be made to the company’s representative by the SP or by their staff in Cash and if SP or their staff do so, it shall be deemed as infringement/violation of the terms and conditions of the agreement and the agreement shall be liable to be terminated with immediate effect.

4.16      The SP shall take prompt and immediate steps to safeguard and secure the interests and rights of the company in case any purchaser fails to take delivery of HR Coils offered to him or dispatched to him. The SP shall take all measures to prevent any loss to the company and shall immediately inform the company regarding such loss or damage and the steps taken by them. The expenses incurred in connection with return of HR Coils, if any, shall be decided by the company on merit and shall be binding on SP.

4.17       The SP shall always uphold the prestige, brand image, reputation and goodwill of the Company and its products. The SP further ensure that no unsocial or unfair practice like adulteration, pilferages etc. are indulged in.  

4.18       The SP shall install and maintain the signboards, furniture, computers and fixtures and lighting arrangements if provided by the company. All expenses incurred on account of manpower, office maintenance, electricity, telephone, computer operator and any other expenses related to procurement of order, collection, and deposit of cheques, maintenance of records, communication and related operations shall be responsibility of SP & will be borne by SP.

4.19      The SP will obtain License, VAT related and other authorizations as may be required for operation of Office related to running of this business.  SP will remind for renewal of licenses, etc. to the Company and extend all possible helps, wherever necessary. Thereafter it will be SP’s duty and responsibility to ensure that all provisions of various laws are duly complied with, so far these relate to operations/ sale of HR Coils. SP will advise company for renewal of various licenses / authorization and proper compliance of various other laws well before the due date.

4.20       The Sales Promoters will not directly or indirectly divulge or publish any trade information, technical data or secrets or the marketing information to any one.  The Sales Promoters will keep a watch and see that the company’s products are well catered and retail outlets are opened over at remote places to the marketing zones(s). 

4.21       Any sum of money due and payable to the SP (including security deposit) under the agreement may be appropriated by the company and set off against any claim of the company for the payment of any sum of money arising out of any other agreement made by the SP with the company.

4.22       Company may revise upward/downward rates of Remuneration based on the various factors, including but not restricting the actual efforts and results, extent of expenses incurred, quality of services etc. at its sole discretion from time to time and same would not be called in question or agitated by SP.

4.23       All claims of SP, same will be good for payment only when duly approved by the competent authority. Lodging of claims does not entitle the SP the right of payment against the claim.

5.     Commission

5.1          The “Sales Promoters” will be paid remuneration, in consideration for his all operations in terms of this agreement, (inter-alia including the procurement of orders, promoting HR Coils manufactured by the company in his area, collection of payment, provision of infrastructure facility) at the rates mentioned in schedule indicated in Annexure forming part of this agreement which may be amended from time to time.

5.2          Applicable Service Tax and Education Cess / surcharge if any, would be reimbursed on actuals on submission of required proof as described in Service Tax Laws. TDS as applicable would be deducted from the payments made to SP at prevailing rates. Any other Tax levied, if any, would be borne by SP.

6.     Termination of Agreement 

6.1              This agreement can be terminated by the Company in the event of expiry of duration of agreement, or earlier upon any change in the constitution of SP’s firm (or promoters/ directors of the company) without prior approval of the company and/or when such changes are not acceptable   (or) If SP or SP’s firm or a partner of HA’s firm becomes insolvent or enter into any composition with creditors or commits any offence. Such termination of the agreement would not result into absolving the firm or the partners of their liability and the company would be entitled to proceed against the SP as well as all its past and present Partners / Directors in their personal capacity for breach of contract and can claim punitive damages.

6.2        In case of misconduct, negligence, unsatisfactory sales, inefficiency, non-performance, breach of any terms and conditions of this agreement on the part of the SP or any act of the SP which is  detrimental to the interests and / or working of the company, the company shall have the rights without assigning any reason, to terminate this agreement with immediate effect and notice /compensation thereof. SP shall be liable to make good any loss or damage caused to the company on account of the misconduct, negligence, inefficiency and breach of any terms and conditions of the agreement etc including punitive damages.

6.3        That on the termination of this agreement for whatsoever reason, the SP shall forthwith deliver to the Company all books of accounts, all records, cheques, bills of exchange or other securities, office equipment, furniture and fixtures, computer, printer and other accessories as may have been received, during normal course of business from the company.

7.         Amendments etc

7.1           All amendments/changes in the agreement issued from time to time by way of formal communication by the competent authority of the company duly accepted by SP shall form part of this agreement. 

8.         Effect of Partial Invalidity

8.1        The invalidity of any part of this agreement will not and shall not be deemed to affect the validity of any other part. In the event any provision of this agreement is held to be invalid, the parties agree that the remaining provision shall, deemed to be in full force and effect as if they had been executed by both that parties subsequent to the expungement of the invalid provision.

9.       Force Majeure Clause

9.1     Both the parties shall be released from their respective obligations in the event of any act of God, Emergency, war, Prohibitive Government Regulations, Strike, Agitation or any other Cause beyond the Reasonable control of the parties which renders the performance of the Agreement impossible whereupon:-
a.             All amounts due to the Company by SP shall be paid immediately.

b.             The SP shall forthwith cease dealing in and carrying on the business in the products of the Company or represent the company in other capacity whatsoever.

10.       Arbitration

10.1      Any disputes, differences and doubts whatsoever which may arise between the parties hereto during the continuance of this Agreement touching this Agreement shall be resolved amicably preferably within 30 days, failing which, the unresolved issues shall be referred to arbitration of a sole arbitrator, appointed by the Company, whose decision and Award shall be final and binding on both the parties. Such arbitrator shall have the power to make interim Award/s summary direction if so necessary. The arbitration will be in English language. All such arbitration proceedings shall be held at …… in Mumbai shall be in accordance with and subject to the provisions of the Arbitration and Conciliation Act, 1996 or any statutory modification(s), re-enactment thereof for the time being in force.

11.      Jurisdiction

11.1 This agreement is subject to exclusive jurisdiction of the courts at ______________, Mumbai where registered office of the Company is situated.

In witness whereof the parties have hereto affixed their signature on the date stated in this agreement in the presence of the following witnesses.

For                                                                                                       For M/s __________________

AUTHORIZED SIGNATORY                                                                   PROPRIETOR/PARTNER


    1.                                                                                         1.

    2.                                                                                         2.

ANNEXURE –of Agreement of Sales Promoters DT.__.__.2013 forming part of contractual obligations between the parties.

BETWEEN ______________ AND M/s ___________________, ______




Area of Operation
______ districts
Security Deposit
(The rate of interest applicable as per Clause 2.1 of Agreement)

25 Lac
Targeted Quantity
 MT Per month




Rate PMT

For achieving the monthly target of HR Coils (Qty. actually sold and billed)

Rs. /- PMT
For not Achieving the monthly target of HR Coils (Qty. actually sold and billed)

Rs. /- PMT









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