Sales Representative Agreement (Nigeria)
SALES REPRESENTATIVE AGREEMENT
Federal Competition and Consumer Protection Act 2018 | Companies Income Tax Act (Cap C21, LFN 2004) | Personal Income Tax Act 2011 | Companies and Allied Matters Act 2020
THIS SALES REPRESENTATIVE AGREEMENT is made on [Agreement Date]
BETWEEN:
(1) [Principal Name] of [Principal Address], RC [Principal RC Number] (hereinafter referred to as the "Principal"); AND
(2) [Representative Name] of [Representative Address], RC [Representative RC Number] (hereinafter referred to as the "Representative").
1. APPOINTMENT AND TERRITORY
1.1 The Principal hereby appoints the Representative on a [Exclusivity] basis to solicit orders for the following products and services: [Products/Services] (the "Products") within the territory of [Sales Territory] (the "Territory"), commencing on [Commencement Date] for a term of [Agreement Term].
1.2 The Representative accepts the appointment and agrees to use its best endeavours to promote and sell the Products within the Territory throughout the term of this Agreement.
1.3 The Representative shall not hold itself out as an agent of the Principal for any purpose other than soliciting orders and shall not bind the Principal contractually without prior written authority.
2. COMMISSION AND TARGETS
2.1 The Principal shall pay the Representative a commission of [Commission Rate] on all sales of the Products to customers within the Territory that are attributable to the Representative's efforts. Commission is earned only on sales where full payment has been received from the customer.
2.2 Commission shall be paid [Payment Schedule]. The Principal shall provide a commission statement with each payment.
2.3 Minimum Sales Target: [Sales Target]. Failure to achieve the minimum target in two consecutive periods shall entitle the Principal to convert the appointment from exclusive/sole to non-exclusive or to terminate on written notice.
2.4 Withholding Tax: [Withholding Tax].
3. OBLIGATIONS OF THE REPRESENTATIVE
3.1 The Representative shall: (a) comply with the Principal's pricing and credit policies; (b) maintain adequate staffing and resources to service the Territory; (c) report to the Principal monthly on sales activities, customer feedback, and market conditions; (d) not make any representations about the Products beyond those authorised by the Principal.
3.2 The Representative shall maintain the confidentiality of all trade secrets, customer lists, pricing data, and other proprietary information of the Principal during and after the term of this Agreement.
3.3 The Representative shall comply with all applicable Nigerian laws, including the Federal Competition and Consumer Protection Act 2018, and shall not engage in any anti-competitive conduct in relation to the Products.
3.4 Independent Contractor: The Representative is an independent contractor and not an employee, agent, or partner of the Principal. Nothing in this Agreement shall be construed to create an employment relationship under the Labour Act (Cap L1, LFN 2004).
4. TERMINATION
4.1 Either party may terminate this Agreement on [Notice Period]. Either party may terminate immediately upon material breach unremedied within 14 days of written notice, or upon insolvency of the other party.
4.2 Upon termination, the Representative shall: (a) cease representing the Principal immediately; (b) return all samples, promotional materials, and confidential documents; (c) refrain from soliciting the Principal's customers in the Territory for [Non-Compete Period].
4.3 Commission accrued on sales concluded before the termination date shall remain payable to the Representative in accordance with this Agreement.
4.4 This Agreement is governed by the laws of the Federal Republic of Nigeria and the laws of [Governing State] State. Disputes shall be resolved by arbitration under the Arbitration and Conciliation Act (Cap A18, LFN 2004).
Principal (Authorised Signatory)
________________
Signature
Sales Representative
________________
Signature
What Is a Sales Representative Agreement (Nigeria)?
A Sales Representative Agreement in Nigeria sets out the rights, duties and consideration binding the parties to it.
Nigeria does not have a standalone Commercial Agents Act equivalent to the European Union's Commercial Agents Directive (86/653/EEC) that gives agents statutory rights to compensation on termination. Nigerian sales representative relationships are therefore governed primarily by the contract terms, and the agent's rights on termination depend entirely on the agreement rather than statutory protections. This makes precise contract drafting particularly important for sales representatives operating in Nigeria.
The Federal Competition and Consumer Protection Commission (FCCPC), established under the Federal Competition and Consumer Protection Act (FCCPA) 2018, regulates commercial relationships that may involve anti-competitive conduct — including exclusive territory arrangements that unreasonably restrict trade, resale price maintenance, and bid-rigging. Sales representative agreements that create exclusive territories or restrict the representative's ability to deal with competing products must be structured to avoid violating Section 61 (abuse of dominant position) or Section 59 (horizontal agreements) of the FCCPA 2018.
For foreign principals appointing Nigerian sales representatives, the Nigerian Investment Promotion Commission (NIPC) Act Cap N117 LFN 2004 is relevant where the representative arrangement effectively constitutes a 'place of business' in Nigeria, potentially triggering the obligation for the foreign principal to register with the NIPC and the CAC under the Business Facilitation (Miscellaneous Provisions) Act 2022.
The legal framework governing the Sales Representative Agreement (Nigeria) in Nigeria draws on several key statutes and regulatory bodies. Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Parties executing a Sales Representative Agreement (Nigeria) in Nigeria should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Companies and Allied Matters Act (CAMA) 2020 sets the foundational requirements.
When Do You Need a Sales Representative Agreement (Nigeria)?
A Sales Representative Agreement in Nigeria is required whenever a principal engages an individual or company to sell its products or services on its behalf within Nigeria.
A Sales Representative Agreement is needed when a Lagos-based FMCG manufacturer appoints a regional sales representative to cover the South-West geopolitical zone — Lagos, Ogun, Oyo, Osun, Ekiti, and Ondo States — to drive distribution of consumer goods to retailers, wholesalers, and supermarkets. The agreement defines territory, targets, commission rates, and reporting obligations.
A Sales Representative Agreement is required when a foreign pharmaceutical company (such as GlaxoSmithKline Nigeria or Pfizer Nigeria) appoints a Nigerian medical sales representative to promote prescription drugs to hospital pharmacies, teaching hospitals — including Lagos University Teaching Hospital (LUTH) and University of Nigeria Teaching Hospital (UNTH) — and private clinics. The agreement must address National Agency for Food and Drug Administration and Control (NAFDAC) regulations on pharmaceutical promotion.
A Sales Representative Agreement is needed when a technology company appoints a sales agent to market its software or hardware products to Nigerian corporate clients, government ministries, and state enterprises. The agreement addresses IP protection, demonstration of proprietary products, and lead qualification obligations.
A Sales Representative Agreement is required when a real estate developer appoints property sales agents — registered with the Lagos State Real Estate Regulatory Authority (LASRERA) — to market new residential or commercial developments. LASRERA registration is mandatory for real estate agents in Lagos under the Lagos State Real Estate Transaction Law 2021.
A Sales Representative Agreement is needed when a commodity trader appoints a commission agent to source agricultural produce — cocoa, sesame, groundnut — from farmers in Ogun, Oyo, or Kano State for export, documenting the agent's authority, commission rate, and obligations to comply with the Nigerian Export Promotion Council (NEPC) and Standards Organisation of Nigeria (SON) export quality requirements.
Parties in Nigeria should prepare a Sales Representative Agreement (Nigeria) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.
What to Include in Your Sales Representative Agreement (Nigeria)
A valid Nigeria Sales Representative Agreement must contain the following essential elements.
Parties: Full legal names, addresses, and CAMA 2020 RC numbers (for corporate representatives). Confirm the representative's legal status — individual, partnership, or limited liability company — as this affects tax withholding obligations under the Companies Income Tax Act (CITA) Cap C21 and the Personal Income Tax Act (PITA) Cap P8 LFN 2004.
Appointment and Territory: The scope of the appointment (exclusive or non-exclusive) and the defined geographic territory — stating the states or geopolitical zones covered in Nigeria. For exclusive appointments, address the FCCPA 2018 competition law considerations.
Products or Services: A precise description of the products or services the representative is authorised to sell, including any product line restrictions or minimum product range requirements.
Commission and Remuneration: The commission rate (percentage of net invoiced sales value), commission calculation methodology, when commission is earned (on booking, on delivery, or on collection of payment), currency of payment (NGN), and payment frequency. Address withholding tax deduction: companies pay WHT at 5% on commissions, individuals at 5%, remittable to FIRS or the relevant State IRS under CITA and PITA.
Performance Targets: Minimum sales targets by product line and territory, the consequences of failure to meet targets (removal of exclusivity, reduced territory, or termination), and the measurement and reporting period (monthly, quarterly, annually).
Authority and Agency: The scope of the representative's authority — whether the representative can conclude contracts on the principal's behalf (actual authority) or only introduce customers (introductory agent). For FMCG distribution, specify whether the representative acts as agent (on principal's account) or buys and resells (distributor).
Non-Compete and Confidentiality: Restriction on representing directly competing products during the agreement term, and post-termination non-compete restrictions (subject to reasonableness under Nigerian contract law). Confidentiality obligations regarding the principal's pricing, customers, and trade secrets.
Compliance: Obligation to comply with NAFDAC regulations (for pharmaceutical and food products), FCCPA 2018 competition rules, LASRERA requirements (for real estate agents), and Nigerian Consumer Protection Framework.
Termination: Notice periods for termination by either party, grounds for immediate termination (fraud, gross misconduct, insolvency), and the treatment of pipeline commissions on orders received before termination but fulfilled after the termination date.
Governing Law: Laws of the Federal Republic of Nigeria; dispute resolution by arbitration under the Arbitration and Conciliation Act (Cap A18, LFN 2004) or litigation at the Federal High Court or State High Court.
Additional compliance elements for a Sales Representative Agreement (Nigeria) used in Nigeria include: Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Forms-legal.com provides this template as a starting point for Nigeria-compliant documentation.
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Forms Legal. (2026). Sales Representative Agreement (Nigeria) (Nigeria) [Legal document template]. Forms Legal. https://forms-legal.com/nigeria/business/contracts/sales-representative-agreement-nigeria
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title = {Sales Representative Agreement (Nigeria) (Nigeria)},
year = {2026},
howpublished = {\url{https://forms-legal.com/nigeria/business/contracts/sales-representative-agreement-nigeria}},
note = {Free legal document template. Based on Companies and Allied Matters Act (CAMA) 2020}
}Frequently Asked Questions
A Sales Representative Agreement is legally binding and enforceable in Nigeria as a contract under Nigerian common law of agency and contract, provided the agreement satisfies the basic requirements of offer, acceptance, consideration, capacity, and certainty of terms. Nigerian courts — including the Lagos State High Court Commercial Division and the Federal High Court — regularly enforce commission agency agreements and have developed a body of precedent on disputes about territory, exclusivity, and commission calculations. Unlike in the European Union where commercial agents benefit from statutory protection on termination under the Commercial Agents Directive, Nigerian law does not provide statutory rights to compensation or indemnity for sales representatives on termination. The agent's rights on termination are therefore entirely determined by the contract terms, making precise drafting of termination provisions, notice periods, and post-termination commission rights essential in Nigerian sales representative agreements.
In Nigerian commercial practice, a sales representative (agent) and a distributor occupy different legal positions in the supply chain. A sales representative acts as agent for the principal, introducing customers or concluding contracts on the principal's behalf, earning a commission on sales. The representative does not take title to the goods — the contract of sale is between the principal and the end customer. A distributor, by contrast, buys goods from the principal at a wholesale price and resells them to retailers or end customers at a markup on the distributor's own account and at the distributor's own risk. The distributor takes title to the goods and bears the credit risk of the end customer. This distinction has significant commercial and tax implications: commission paid to a sales representative is subject to withholding tax and is an agency cost for the principal, while a distributor's margin is the distributor's gross profit subject to Company Income Tax (CIT) or Personal Income Tax (PITA) in the distributor's hands.
Commissions paid to sales representatives in Nigeria are subject to withholding tax (WHT) deducted at source by the principal. Under the Companies Income Tax Act (CITA) Cap C21 and the Personal Income Tax Act (PITA) Cap P8 LFN 2004, the withholding tax rate on commissions and agency fees is 5% for both corporate and individual recipients. The principal deducts 5% WHT from each commission payment and remits the deducted amount to the Federal Inland Revenue Service (FIRS) — for corporate recipients — or the relevant State Internal Revenue Service — for individual recipients — within 21 days of the end of the month in which the deduction is made. The sales representative receives a Tax Deduction Card (TDC) from FIRS confirming the WHT deducted, which can be used as a credit against the representative's annual income tax assessment. Failure to deduct and remit WHT makes the principal liable for the underpaid tax plus penalties and interest under the FIRS Establishment Act 2007.
A foreign company can appoint a Nigerian individual or company as sales representative without the foreign principal itself registering in Nigeria, provided the arrangement is genuinely an agency relationship and does not constitute the foreign principal carrying on business in Nigeria through a fixed place of business or dependent agent. Under Section 54 of CAMA 2020, a foreign company is required to register with the Corporate Affairs Commission (CAC) before it can carry on business in Nigeria. The Business Facilitation (Miscellaneous Provisions) Act 2022 and the CAC's interpretive guidelines have updated what constitutes 'carrying on business' in Nigeria. A foreign principal who merely appoints an independent Nigerian agent to solicit orders — without the agent having authority to conclude contracts or maintain stock — typically does not trigger the CAMA 2020 registration requirement. However, if the Nigerian representative has authority to negotiate and conclude contracts on behalf of the foreign principal, this may constitute a dependent agent permanent establishment triggering Nigerian CIT exposure for the foreign principal.
Exclusive Sales Representative Agreements in Nigeria must be assessed for compliance with the Federal Competition and Consumer Protection Act (FCCPA) 2018, which prohibits anti-competitive conduct. Section 59 of the FCCPA 2018 prohibits horizontal agreements between competitors that fix prices, share markets, or limit supply. Exclusive territory appointments are primarily vertical arrangements (between principal and representative at different levels of the supply chain), and Nigerian competition law generally treats vertical restrictions more leniently than horizontal arrangements. However, the Federal Competition and Consumer Protection Commission (FCCPC) may scrutinise exclusive appointment agreements where the principal has a dominant market position — defined under Section 67 of the FCCPA 2018 as more than 35% of a relevant market — particularly if the exclusivity forecloses competing products from the territory. Exclusive arrangements should include a reasonable term (typically one to three years), performance obligations, and a non-exclusive fallback provision to demonstrate pro-competitive justification.
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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