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Agency Agreement (Canada)

Agency Agreement

Date: [Effective Date]

This Agency Agreement (the "Agreement") is entered into as of [Effective Date] (the "Effective Date") by and between:

[Principal Name], [Principal Entity Type], with a mailing address at [Principal Address], [Principal City], [Principal Province] [Principal Postal Code], Canada (hereinafter the "Principal");

and

[Agent Name], [Agent Entity Type], with a mailing address at [Agent Address], [Agent City], [Agent Province] [Agent Postal Code], Canada (hereinafter the "Agent").

The Principal and the Agent are collectively referred to as the "Parties" and individually as a "Party."

RECITALS

WHEREAS, the Principal is engaged in the business of providing or selling: [Products/Services];

WHEREAS, the Principal desires to appoint the Agent to solicit orders and promote the Products/Services within the Territory on the terms set forth herein;

WHEREAS, the Agent has the expertise, resources, and commercial relationships necessary to effectively represent the Principal within the Territory;

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE 1 — APPOINTMENT AND SCOPE OF AUTHORITY

1.1

Appointment. The Principal hereby appoints the Agent as its [Exclusivity] sales agent for the solicitation of orders for the Products/Services within the Territory, and the Agent accepts such appointment.

1.2

Authority. The Agent is granted [Authority Type] authority, with a maximum binding limit of CAD $[Binding Limit] per transaction where applicable. The Agent shall not exceed the scope of authority granted herein. Any contract, commitment, or obligation entered into by the Agent that exceeds the authority granted under this Agreement shall not be binding upon the Principal unless expressly ratified in writing by the Principal.

1.3

Independent Contractor. The Agent is an independent contractor and not an employee, partner, or joint venturer of the Principal. Nothing in this Agreement shall create or be deemed to create an employment relationship. The Agent shall be solely responsible for its own tax obligations, including income tax remittances to the Canada Revenue Agency (CRA), Canada Pension Plan (CPP) contributions, and any applicable provincial tax obligations.

1.4

No Apparent Authority. The Agent shall not represent, warrant, or hold itself out as having any authority to bind the Principal beyond the scope expressly set forth in this Agreement. The Agent shall not create any obligation or liability on behalf of the Principal except as expressly authorized herein.

ARTICLE 2 — PRODUCTS/SERVICES AND TERRITORY

2.1

Products/Services. The Agent shall represent the following products and/or services of the Principal: [Products/Services].

2.2

Territory. The Agent’s authorized territory shall be: [Territory] (the "Territory"). The Agent shall not solicit orders or conduct promotional activities outside the Territory without the prior written consent of the Principal.

2.3

Exclusivity. This appointment is [Exclusivity]. If exclusive, the Principal shall not appoint additional agents within the Territory for the Products/Services during the term of this Agreement, provided that the Agent meets any applicable performance benchmarks.

ARTICLE 3 — FIDUCIARY DUTIES AND AGENT OBLIGATIONS

3.1

Duty of Loyalty. The Agent owes a fiduciary duty of loyalty to the Principal. The Agent shall act in good faith and in the best interests of the Principal at all times, shall avoid conflicts of interest, and shall not derive any undisclosed benefit or secret profit from the agency relationship.

3.2

Duty to Account. The Agent shall account to the Principal for all monies, property, and benefits received or held on behalf of the Principal. The Agent shall not commingle the Principal’s funds or property with the Agent’s own funds or property and shall maintain accurate books and records.

3.3

Duty of Care. The Agent shall exercise the skill, care, and diligence that a reasonably prudent agent would exercise in comparable circumstances. The Agent shall use commercially reasonable best efforts to promote and solicit orders for the Products/Services within the Territory.

3.4

Duty to Obey. The Agent shall follow all lawful and reasonable instructions and directions given by the Principal regarding the performance of the Agent’s duties under this Agreement.

3.5

Compliance with Laws. The Agent shall comply with all applicable federal, provincial, and municipal laws, regulations, and bylaws, including but not limited to the Competition Act (R.S.C., 1985, c. C-34), the Consumer Packaging and Labelling Act (R.S.C., 1985, c. C-38), and any applicable industry-specific regulations. The Agent shall not engage in any anti-competitive practice, price-fixing, market allocation, or bid-rigging.

3.6

Reporting. The Agent shall provide the Principal with monthly written reports detailing sales activity, orders solicited, customer inquiries, market conditions, and any material developments within the Territory.

3.7

Representations. The Agent shall not make any unauthorized representations, warranties, guarantees, or price concessions on behalf of the Principal. All marketing and promotional materials used by the Agent must be approved by the Principal in writing.

ARTICLE 4 — PRINCIPAL OBLIGATIONS

4.1

The Principal shall provide the Agent with product information, marketing materials, price lists, and such training as is reasonably necessary for the Agent to perform its duties.

4.2

The Principal shall process and fulfil orders procured by the Agent in a timely and commercially reasonable manner.

4.3

The Principal shall notify the Agent promptly of any material changes to pricing, product availability, specifications, or terms of sale.

4.4

The Principal shall indemnify the Agent against any claims, losses, or damages arising directly from defective products or services supplied by the Principal, provided that the Agent has not contributed to such defect through its own negligence or unauthorized conduct.

ARTICLE 5 — COMMISSION AND PAYMENT

5.1

Commission Rate. The Principal shall pay the Agent a commission of [Commission Rate]% of the net invoice value of orders procured by the Agent within the Territory that are accepted by the Principal and paid for by the customer. All commission amounts are expressed in Canadian dollars (CAD).

5.2

Payment Terms. Commissions shall be payable [Payment Terms].

5.3

No Commission on Unpaid Orders. No commission shall be payable on cancelled, returned, or uncollected orders, unless non-collection is attributable to the Principal’s act or omission.

5.4

Commission Statements. The Principal shall provide monthly commission statements with sufficient detail for the Agent to verify amounts owed. The Agent shall have the right to audit the Principal’s books and records pertaining to commissions once per calendar year upon thirty (30) days’ written notice, at the Agent’s expense.

5.5

Post-Termination Commissions. Upon termination of this Agreement for any reason, the Agent shall be entitled to commissions on orders procured by the Agent prior to the effective date of termination, provided such orders are accepted and paid for by customers within ninety (90) days following termination.

ARTICLE 6 — GST/HST AND TAX MATTERS

6.1

The Agent acknowledges that commission payments may be subject to the Goods and Services Tax (GST) or the Harmonized Sales Tax (HST) under the Excise Tax Act (R.S.C., 1985, c. E-15). Where applicable, the Agent shall charge and collect GST/HST on commission invoices and remit such amounts to the Canada Revenue Agency (CRA) in accordance with applicable law.

6.2

The Agent represents that its GST/HST registration status has been accurately disclosed to the Principal. If the Agent is registered (GST/HST No. [Agent GST Number]), commission invoices shall include the Agent’s GST/HST registration number and the applicable tax amount as a separate line item.

6.3

The Agent is solely responsible for all income tax, CPP self-employment contributions, and any other statutory remittances arising from commission income. The Principal shall not withhold or remit any amounts on the Agent’s behalf.

6.4

Where the Agent collects or handles payments from customers on behalf of the Principal, the Agent shall collect and remit all applicable GST/HST on such transactions in accordance with the Principal’s instructions and applicable law.

TERM AND TERMINATION

8.1

Term. This Agreement shall commence on the Effective Date and continue for a period of [Term] (the "Initial Term").

8.2

Renewal. Upon expiry of the Initial Term, this Agreement shall [Renewal Type].

8.3

Termination for Convenience. Either Party may terminate this Agreement at any time upon sixty (60) days’ written notice to the other Party. Canadian common law requires that reasonable notice be provided to an agent upon termination; the Parties agree that sixty (60) days constitutes reasonable notice for the purposes of this Agreement.

8.4

Termination for Cause. Either Party may terminate this Agreement immediately upon written notice if the other Party: (a) commits a material breach and fails to cure such breach within fifteen (15) days of receiving written notice specifying the breach; (b) becomes insolvent, makes an assignment for the benefit of creditors, or has a petition in bankruptcy filed against it under the Bankruptcy and Insolvency Act (R.S.C., 1985, c. B-3); (c) is convicted of a criminal offence that materially affects the agency relationship; or (d) engages in fraud, dishonesty, or wilful misconduct.

8.5

Obligations Upon Termination. Upon termination or expiry: (a) the Agent shall immediately cease all activities on behalf of the Principal; (b) the Agent shall return all property, materials, documents, and Confidential Information of the Principal; (c) the Principal shall pay all earned and accrued commissions in accordance with this Agreement; and (d) all rights and obligations that by their nature are intended to survive termination shall survive.

CONFIDENTIALITY AND PRIVACY

9.1

Confidential Information. The Agent shall maintain in strict confidence all Confidential Information of the Principal, including but not limited to trade secrets, customer lists, pricing strategies, business plans, financial information, and proprietary processes. The Agent shall not use Confidential Information for any purpose other than the performance of its duties under this Agreement.

9.2

Survival. Confidentiality obligations shall survive the termination or expiry of this Agreement for [Confidentiality Period]. Trade secret protection obligations shall survive indefinitely.

9.3

PIPEDA Compliance. To the extent that the Agent collects, uses, stores, or discloses personal information of the Principal’s customers, employees, or other individuals in the course of performing its duties, the Agent shall comply with the Personal Information Protection and Electronic Documents Act (S.C. 2000, c. 5) ("PIPEDA") and any applicable provincial privacy legislation (e.g., PIPA in Alberta and British Columbia, An Act Respecting the Protection of Personal Information in the Private Sector in Quebec).

9.4

The Agent shall: (a) collect personal information only for purposes reasonably necessary to fulfil the Agent’s obligations under this Agreement; (b) obtain consent for collection, use, and disclosure of personal information as required by PIPEDA; (c) implement appropriate physical, organizational, and technological safeguards to protect personal information; (d) promptly notify the Principal of any privacy breach; and (e) upon termination, return or securely destroy all personal information in its possession.

9.5

Anti-Spam Compliance. Any electronic commercial messages sent by the Agent on behalf of the Principal shall comply with Canada’s Anti-Spam Legislation (CASL) (S.C. 2010, c. 23), including the requirements for consent, identification, and unsubscribe mechanisms.

INDEMNIFICATION AND LIABILITY

11.1

Mutual Indemnification. Each Party shall indemnify, defend, and hold harmless the other Party from and against all claims, damages, losses, costs, and expenses (including reasonable legal fees) arising from: (a) the indemnifying Party’s negligence or wilful misconduct; (b) a breach of any representation, warranty, or obligation under this Agreement; or (c) a violation of applicable law by the indemnifying Party.

11.2

Limitation of Liability. NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, OR PUNITIVE DAMAGES, INCLUDING LOSS OF PROFITS OR BUSINESS OPPORTUNITIES, WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

11.3

Agent’s Liability. The Agent shall be personally liable for any loss, damage, or liability caused by the Agent’s actions that exceed the scope of authority granted under this Agreement, or that result from the Agent’s breach of fiduciary duties.

NOTICES

All notices required or permitted under this Agreement shall be in writing and shall be deemed delivered: (a) upon personal delivery; (b) one (1) business day after deposit with a nationally recognized courier service (e.g., Canada Post Xpresspost, Purolator, FedEx); or (c) upon confirmed receipt if sent by email. Notices shall be sent to the following addresses:

To the Principal: [Principal Name], [Principal Address], [Principal City], [Principal Province] [Principal Postal Code], Canada. Email: [Principal Email]

To the Agent: [Agent Name], [Agent Address], [Agent City], [Agent Province] [Agent Postal Code], Canada. Email: [Agent Email]

Either Party may change its notice address by providing written notice in accordance with this section.

GENERAL PROVISIONS

13.1

Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Province of [Province] and the applicable federal laws of Canada.

13.2

Dispute Resolution. Any dispute, controversy, or claim arising out of or relating to this Agreement shall be resolved by [Dispute Method].

13.3

Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior negotiations, representations, warranties, commitments, offers, and agreements, whether written or oral.

13.4

Amendment. No amendment, modification, or waiver of any provision of this Agreement shall be effective unless made in writing and signed by both Parties.

13.5

Severability. If any provision of this Agreement is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, such provision shall be severed and the remaining provisions shall continue in full force and effect.

13.6

Assignment. Neither Party may assign or transfer this Agreement or any rights or obligations hereunder without the prior written consent of the other Party, except that the Principal may assign this Agreement in connection with a merger, amalgamation, or sale of substantially all of its assets.

13.7

Waiver. The failure of either Party to enforce any right or provision of this Agreement shall not constitute a waiver of such right or provision.

13.8

Force Majeure. Neither Party shall be liable for any delay or failure to perform its obligations under this Agreement to the extent that such delay or failure is caused by circumstances beyond its reasonable control, including but not limited to acts of God, natural disasters, pandemics, government orders, strikes, or civil unrest.

13.9

Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Electronic signatures shall be deemed valid and binding in accordance with applicable federal and provincial electronic commerce legislation.

13.10

Language. The Parties have required that this Agreement be drawn up in the English language. Les parties aux présentes ont exigé que la présente convention soit rédigée en langue anglaise.

IN WITNESS WHEREOF, the Parties have executed this Agency Agreement as of the date first written above.

Party 1

________________

Signature

Date: ________________

Party 2

________________

Signature

Date: ________________

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What Is a Agency Agreement (Canada)?

An Agency Agreement in Canada appoints an agent to act for the principal within defined authority and sets the agent’s duties and commission, governed primarily by common-law agency principles.

Under Canadian agency law, the scope of the agent's authority is critical. An agent may have actual authority (expressly granted in the agreement or implied from the nature of the role), apparent authority (arising from the principal's representations to third parties), or ratified authority (when the principal retroactively approves unauthorized actions). The distinction matters because the principal is legally bound by any contract the agent enters within the scope of their authority, even if the specific transaction was not expressly approved. Section 15 of Ontario's Sale of Goods Act (R.S.O. 1990, c. S.1) governs when an agent's acts bind the principal in goods transactions, and the Mercantile Law Amendment Act (R.S.O. 1990, c. M.10) addresses subagency and del credere agency arrangements.

The agreement must also address GST/HST obligations under the Excise Tax Act (R.S.C. 1985, c. E-15). If the agent's commission or service fees exceed $30,000 in annual revenue, the agent must register for GST/HST and charge the applicable rate on their services. The CRA treats agent commissions as taxable supplies, and both parties need clarity on whether commission amounts are stated inclusive or exclusive of GST/HST.

The legal framework governing the Agency Agreement (Canada) in Canada draws on several key statutes and regulatory bodies. Under the Canada Business Corporations Act (R.S.C. 1985, c. C-44), Corporations Canada maintains the federal registry. Section 12 of the CBCA governs corporate name requirements. The Competition Bureau enforces the Competition Act (R.S.C. 1985, c. C-34). Provincial securities commissions — including the Ontario Securities Commission (OSC) and British Columbia Securities Commission (BCSC) — regulate capital markets. The Federal Court of Canada has jurisdiction under the Federal Courts Act. Parties executing a Agency Agreement (Canada) in Canada should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Canada Business Corporations Act (R.S.C. 1985, c. C-44) sets the foundational requirements.

When Do You Need a Agency Agreement (Canada)?

A Canadian Agency Agreement is needed when a business appoints a sales representative to sell its products or services on its behalf in a specific territory. Unlike a distributorship — where the distributor buys goods and resells them at their own risk — an agent supports transactions between the principal and third-party buyers without taking ownership of the goods, making the legal structure fundamentally different.

Real estate brokerages operate under agency agreements governed by provincial real estate legislation, such as Ontario's Real Estate and Business Brokers Act, 2002 (REBBA) and British Columbia's Real Estate Services Act. Insurance agents and brokers act under agency agreements regulated by provincial insurance acts and the Canadian Council of Insurance Regulators.

Manufacturers expanding into Canadian markets often appoint agents to represent their products rather than establishing direct sales operations, particularly when entering a new province where local market knowledge and established relationships are essential. Talent agents in the entertainment industry, literary agents representing authors, and sports agents negotiating player contracts all operate under agency agreements.

Without a written agency agreement, disputes over the scope of authority, commission calculations, and post-termination client ownership become extremely difficult to resolve. Courts may impose fiduciary duties based on the conduct of the parties, but the scope and limitations of those duties will be uncertain.

Parties in Canada should prepare a Agency Agreement (Canada) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under the Canada Business Corporations Act (R.S.C. 1985, c. C-44), Corporations Canada maintains the federal registry. Section 12 of the CBCA governs corporate name requirements. The Competition Bureau enforces the Competition Act (R.S.C. 1985, c. C-34). Provincial securities commissions — including the Ontario Securities Commission (OSC) and British Columbia Securities Commission (BCSC) — regulate capital markets. The Federal Court of Canada has jurisdiction under the Federal Courts Act. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.

What to Include in Your Agency Agreement (Canada)

A thorough Canadian Agency Agreement must identify both the principal and agent with full legal names, addresses, and business registration numbers (if applicable). The scope of authority must be precisely defined — specifying whether the agent has general authority (broad power to act on behalf of the principal) or specific authority (limited to particular transactions, territories, or product lines). Any restrictions on the agent's authority, such as price floors, contract value limits, or geographic boundaries, must be clearly stated.

The compensation structure should specify the commission rate or fee schedule, the calculation methodology (percentage of gross sales, net sales, or a flat per-transaction fee), payment timing, and whether commissions are earned at the time of sale, delivery, or payment collection. Address trailing commissions — whether the agent is entitled to commissions on repeat orders from clients introduced during the agency term, and for how long after termination.

Fiduciary duty clauses should explicitly state the agent's obligations of loyalty (no conflicts of interest), disclosure (reporting all material information to the principal), confidentiality (protecting trade secrets and client lists under common law and any applicable PIPEDA obligations), and accounting (maintaining accurate records of all transactions).

Termination provisions should specify the notice period required, whether termination for cause allows immediate termination without notice, and the agent's rights upon termination — including any compensation for goodwill or pipeline deals. Include a non-competition and non-solicitation clause if applicable, noting that Canadian courts apply reasonableness tests from Elsley v. J.G. Collins Insurance Agencies Ltd. [1978] 2 SCR 916 to restrict such clauses. The governing law should reference the applicable Canadian province, and a dispute resolution mechanism — mediation, arbitration, or litigation — should be specified.

Additional compliance elements for a Agency Agreement (Canada) used in Canada include: Under the Canada Business Corporations Act (R.S.C. 1985, c. C-44), Corporations Canada maintains the federal registry. Section 12 of the CBCA governs corporate name requirements. The Competition Bureau enforces the Competition Act (R.S.C. 1985, c. C-34). Provincial securities commissions — including the Ontario Securities Commission (OSC) and British Columbia Securities Commission (BCSC) — regulate capital markets. The Federal Court of Canada has jurisdiction under the Federal Courts Act. Forms-legal.com provides this template as a starting point for Canada-compliant documentation.

Sources & Citations

Statutory citations link to official government sources.

  1. R.S.C. 1985, c. E-15CA official
  2. R.S.C. 1985, c. C-44CA official
  3. R.S.C. 1985, c. C-34CA official

Cite this page

Reference this free template in an article, syllabus, or research note:

APA

Forms Legal. (2026). Agency Agreement (Canada) (Canada) [Legal document template]. Forms Legal. https://forms-legal.com/canada/business/contracts/agency-agreement-canada

MLA

"Agency Agreement (Canada) (Canada)." Forms Legal, 2026, https://forms-legal.com/canada/business/contracts/agency-agreement-canada.

BibTeX
@misc{formslegal-agency-agreement-canada,
  author       = {{Forms Legal}},
  title        = {Agency Agreement (Canada) (Canada)},
  year         = {2026},
  howpublished = {\url{https://forms-legal.com/canada/business/contracts/agency-agreement-canada}},
  note         = {Free legal document template. Based on Canada Business Corporations Act (R.S.C. 1985, c. C-44)}
}

Frequently Asked Questions

Based on Canada Business Corporations Act (R.S.C. 1985, c. C-44) — Template last modified June 2026Verify the source →

This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer

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