A commission and performance-based contract template with built-in risk mitigation. Structure deals where your compensation is tied to measurable results while protecting your baseline income and intellectual property.
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Review each item before finalizing your agreement. Performance-based contracts carry unique risks that you should address upfront.
This Performance-Based Services Agreement ("Agreement") is entered into as of _______________ by and between:
Service Provider: _______________ ("Provider")
Client: _______________, operating as _______________ ("Client")
Each individually a "Party" and collectively the "Parties."
The Client engages the Provider to deliver professional services on a performance-based compensation model. The Provider shall receive a guaranteed base fee plus additional performance-based compensation tied to measurable improvements in _______________. This structure aligns the interests of both Parties and ensures the Provider is rewarded for delivering tangible results.
The Client shall pay the Provider a base fee of _______________ per _______________. The base fee is non-refundable and payable regardless of performance outcomes. The base fee shall be invoiced at the beginning of each _______________ period and is due within fourteen (14) days of invoice receipt.
Performance Metric: _______________
Current Baseline: _______________
Target: _______________
Commission Rate: _______________% of measurable improvement above the Baseline
Commission Cap: _______________ per _______________ period
Measurement Period: _______________
Performance compensation is calculated at the end of each Measurement Period. The commission applies only to improvements above the established Baseline and is subject to the Cap stated above.
Results shall be measured using mutually agreed-upon tools, platforms, or data sources. The Client shall provide the Provider with reasonable access to all relevant data, analytics dashboards, and reporting systems necessary to verify performance. The Provider shall submit a performance report at the end of each Measurement Period detailing the metrics achieved, the calculation methodology, and the resulting commission amount. The Client shall have ten (10) business days to review and dispute any reported figures before payment becomes due.
Base fees are payable _______________ in advance. Performance compensation is payable within fourteen (14) days of mutual agreement on the performance report for each Measurement Period. All payments shall be made via bank transfer or other mutually agreed payment method. Late payments shall incur interest at a rate of 1.5% per month on the outstanding balance.
This Agreement commences on _______________ and continues for an initial term of two (2) Measurement Periods. Upon expiration of the initial term, this Agreement shall automatically renew for successive periods equal to one (1) Measurement Period unless either Party provides written notice of non-renewal at least thirty (30) days before the end of the then-current term.
Either Party may terminate this Agreement by providing thirty (30) days' written notice to the other Party. Upon termination: (a) the Client shall pay all outstanding base fees through the notice period; (b) any accrued but unpaid performance compensation for completed Measurement Periods shall remain payable; (c) a pro-rata performance calculation shall be conducted for any partial Measurement Period; and (d) the Provider shall deliver all work product completed to date.
All pre-existing intellectual property of either Party remains the sole property of that Party. Work product created by the Provider specifically for the Client under this Agreement shall be assigned to the Client upon full payment of all fees due. The Provider retains the right to use general methodologies, frameworks, know-how, and techniques developed during the engagement, provided such use does not disclose the Client's confidential information.
Each Party agrees to maintain the confidentiality of all proprietary, financial, strategic, and business information disclosed by the other Party during the term of this Agreement. Confidential information shall not be disclosed to third parties without prior written consent, except as required by law. These obligations survive termination of this Agreement for a period of two (2) years.
The total aggregate liability of either Party under this Agreement shall not exceed the total fees paid or payable under this Agreement during the twelve (12) months preceding the event giving rise to the claim. Neither Party shall be liable for indirect, incidental, consequential, or punitive damages, including lost profits, regardless of the theory of liability.
This Agreement shall be governed by and construed in accordance with the laws of the State of New York, United States, without regard to its conflict of laws principles.
Any dispute arising out of or relating to this Agreement shall first be submitted to good-faith mediation. If mediation is unsuccessful within thirty (30) days, the dispute shall be resolved by binding arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules. The arbitration shall take place in New York, New York, and the decision of the arbitrator(s) shall be final and binding upon both Parties.
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