Exclusive Agency Agreement

Posted in Marketing and Strategy Terms, Total Reads: 1487

Definition: Exclusive Agency Agreement

It is an agreement that binds a principal and an agent in an association and restricts them to make any similar deals with the other's competitors. It can involve a product, service, market or territory.

It usually provides the terms on which on an exclusive basis a principal engages an agent. Certain representations and guarantee is given, as the agent is a director of that company or that company. Limitations, powers and remuneration of the agent is set out for the period or term of the agency according to the specific tasks the agent will perform.

The parties agrees on:

1. Confidentially: Information that is disclosed by one Party to the other Party, if disclosed to the public will be considered breach of contract.

2. Effective date: From when the contract will become valid.

3. Net Product Sales: On purchase orders for Products payments actually received by the Company.

4. Grant of Right: Restrictions on Agents and Company’s activities and reservation of rights by company.

5. Trademarks: Ownership of trademarks acknowledgement by the agent on the Company’s exclusive ownership.

6. Obligations of Agents: Marketing and promoting the Products in the Territory, Participating in trade shows and exhibitions.

7. Expenses & Commissions: As compensation for its services during the Term, a commission of % of the Net Product Sales, will be paid to the Agent.

8. Non-Competition: Agent shall not, directly or indirectly, market, sell or promote the sale of competitor products.

9. Others terms are also mentioned in the contract in order to maintain a legally bound relation.


Hence, this concludes the definition of Exclusive Agency Agreement along with its overview.

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