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Sales Agent Agreement Termination

Sales Agent Agreement Termination: What You Need to Know

A sales agent agreement is a contract that is entered into between a company and its sales agent. The agreement outlines the terms and conditions of the sales agent’s employment with the company, including the terms of termination.

Despite the best efforts of both parties to remain in the agreement, there may come a time when the agreement needs to be terminated. This could be due to a number of reasons, such as a change in business priorities, the agent’s performance, or disagreements between the company and the agent.

Whatever the reason for the termination may be, it is important to follow the correct procedures to ensure that it is legal and does not result in any legal action being taken against the company. Here are some guidelines to follow when terminating a sales agent agreement.

Review the Agreement

The first step in terminating a sales agent agreement is to review the contract to ensure that the termination is in compliance with the terms of the agreement. The contract should outline the notice period required for termination, the reasons for which the contract can be terminated, and any other conditions that must be fulfilled before termination can occur.

Provide Notice

Once you have reviewed the agreement and have determined that the termination is in compliance with the contract, you must then provide notice to the sales agent. The notice should be in writing and should clearly state the reason for termination, the date on which the termination will take effect, and any other pertinent details.

If the notice period required by the contract is not met, the company may be liable for breach of contract and may be required to pay damages to the sales agent.

Conduct an Exit Interview

Upon termination, it is important to conduct an exit interview with the sales agent. This is an opportunity to provide feedback on the agent’s performance, to answer any questions the agent may have, and to ensure that the agent has returned all company property and documents.

Final Payment

The sales agent should be paid any outstanding commission or other payments due to them at the time of termination. Failure to do so may result in legal action being taken against the company.


Terminating a sales agent agreement is never an easy decision to make, however, following the correct procedures can ensure that the process is legal and does not result in any legal action being taken against the company. By reviewing the agreement, providing notice, conducting an exit interview, and making final payments, the termination process can be handled professionally and with minimal disruption to the business.