Agency Agreement

An agency can be created orally or by conduct under the Indian Contract Act, but a written agreement is strongly recommended to clarify scope, commission, and termination rights and to mitigate disputes.

Exclusive arrangements can incentivise the agent but may raise competition and dependency risks. Non-exclusive appointments give the principal more flexibility but may dilute the agent's commitment. Consider market power, business strategy, and competition law while deciding.

In most cases, agency commission is treated as a supply of services and attracts GST when the agent is registered. The template allows you to configure whether GST is currently applicable and to update if registration thresholds are crossed.

Reasonable non-compete obligations during the term are more likely to be enforceable, particularly where the agent has access to confidential information. Post-termination non-competes are generally restricted, so non-solicit and confidentiality clauses are preferred.

You should clearly define chargeback rules in the agreement, including when commission is reversed for cancellations, returns, credit notes, or bad debts, and how long after initial sale adjustments can be made.