TheCompliance Hub.
Legal documents & agreements

Direct selling agreement.

Review the selling model, roles, customer obligations and terms relevant to the arrangement.

Scope before commitment Requirements explained
01 / THE BIG PICTURE

The right support.
With the details in view.

A direct selling agreement describes the relationship between a business and the people selling its goods or services through the proposed model. The commercial terms need to match actual sales practices, customer protections and applicable direct selling rules. Drafting should follow a model review; an agreement cannot legitimise a prohibited scheme or unsupported earnings claims.

First, establish what applies

Documents should reflect the transaction, parties, location and applicable law. Drafting, legal advice, disputes, execution, stamping and registration need appropriate professional review; a template alone does not complete those steps.

What the scoped work can cover

  • Direct seller agreement draft
  • Model and customer-process issue list
  • Seller onboarding and policy checklist
02 / GET READY

A useful brief.
A stronger starting point.

Bring these inputs and existing records to the drafting discussion. They help turn a standard format into a document that reflects your situation.

  1. 01

    Entity details, products and proposed selling model

  2. 02

    Seller eligibility, onboarding and conduct policies

  3. 03

    Compensation, commissions and customer payment flow

  4. 04

    Return, refund, grievance and customer-contact processes

  5. 05

    Marketing claims, online channels and termination proposals

Share sensitive records only through an agreed secure channel after the engagement is confirmed. Do not send passwords, OTPs or signing keys.

03 / HOW IT MOVES FORWARD

One step.
Then the next.

A clear sequence, with room to resolve the details that are specific to your business.

  1. 01

    Review the model

    Understand how sales, recruitment, payments and rewards operate in practice.

  2. 02

    Map customer responsibilities

    Review product information, returns, complaints and seller conduct requirements.

  3. 03

    Draft seller terms

    Connect permitted selling activity, compensation and exit terms with the reviewed model.

  4. 04

    Check implementation

    Identify policy, disclosure, training and regulatory review actions beyond the agreement.

Scope, fees and timing are agreed after review. Document readiness, professional review and any authority queries affect the schedule. Statutory charges, testing, execution and other third-party costs are identified where relevant.

04 / BEYOND THIS STEP

Keep the next
responsibility in view.

Review seller communications, compensation changes and complaint patterns; update the agreement when the selling model or applicable rules change.

Explore obligations beyond your core business
05 / A LITTLE MORE CLARITY

Good questions.
Useful answers.

01Does signing an agreement approve the selling model?+

No. The business model and practices must independently comply with applicable rules.

02Can sellers promise guaranteed earnings?+

Marketing and earnings representations require careful substantiation and legal review; the agreement should not authorise misleading claims.

03Are customer policies separate?+

Yes. The seller arrangement must be consistent with the business’s actual customer information, grievance and return processes.

OFFICIAL STARTING POINTS

Reviewed 20 October 2026. Requirements and effective dates should be rechecked for the actual application or transaction.

Department of Consumer Affairs — Acts & RulesIndia Code — Indian Contract Act