A sourcing agent contract should say what the agent will do, what you will pay, and who the agent works for. At a minimum, it should cover scope, fee, costs billed at cost, sign-off points, confidentiality, a ban on payments from factories, and how either side can end the agreement.
It does not need to be long. A short, clear agreement that both sides understand is worth more than a long one nobody reads.
The clauses that matter most
- The scope lists the services covered, the products and the deliverable at the end of each one.
- The fee clause sets how much and when the agent is paid, whether a fixed fee, a retainer or a per-container fee.
- The costs clause lists third-party costs, such as laboratory tests, couriers and independent inspections, billed at cost with receipts.
- The sign-off points say which steps need your written approval before the agent moves on.
- The confidentiality clause protects your specs, suppliers and prices, or a separate NDA does.
- The independence clause says the agent takes no payment, gift or fee of any kind from factories.
- The transparency clause says you will always know the factory's legal name, see original lab reports and pay the factory directly.
- The term and termination clause sets how long the agreement runs and how either side can end it.
Independence and transparency
The independence clause is the one many agents leave out. Without it, an agent can take a payment from the factory as well as your fee, and you may never know. Ask for the clause in writing. Then back it up with the practical checks in checking that your agent takes nothing from factories.
Transparency belongs in the contract too. The purchase contract for goods should be between you and the factory, not the agent. That keeps your claim rights with the company that made the goods.
Responsibility and liability
Be clear about what the agent is responsible for. An agent can be responsible for doing its work carefully, such as running an inspection to the agreed scope and reporting honestly. It does not normally guarantee the factory's goods, because it does not make or sell them.
Expect the contract to limit the agent's liability, and read that limit carefully. Also check which country's law applies and how disputes are resolved. A local lawyer in your country can review the draft before you sign.
Practical details
Add how and how often the agent reports, who your named contact is, and how fast they reply. State who owns the reports, photos and scorecards, which should be you. Say what happens to samples and documents if the agreement ends. Our article on starting with a sourcing agent shows where the contract fits in the process.
Next step
Our short agreement sets out scope, fee, costs billed at cost and sign-off points, and states that we take nothing from factories. To see how it would look for you, book a free sourcing review.