As per Direct Selling Rules 2021, issued by the Government of India under the Consumer Protection Act, every direct seller must have a written contract with the direct selling company they represent.
This direct seller contract is not optional. It is a legal requirement meant to protect both the direct selling company and the direct seller. Without a contract, your association with the direct selling company is not valid under law, and you won’t have any legal standing in case of disputes.
What Does the Contract Contain?
The contract between the direct seller and the company usually includes:
- Terms and conditions of the business
- Rights and responsibilities of the seller
- Commission and payout structure
- Termination clause – when and how the company or the seller can end the agreement
- Return and refund policy
- Code of conduct or business ethics
- Compliance with the Direct Selling Rules, 2021 and Consumer Protection Laws
This contract is also called a Direct Seller Agreement or Distributor Agreement, and it acts like a rulebook for your direct selling business.
Is an Online Contract Valid?
Yes! Many companies offer digital direct seller contracts through their websites or mobile apps. As long as it’s legally signed (even digitally) and both parties have access to it, it’s valid. But make sure to read the direct seller contract carefully before signing. Never join a direct selling company that doesn’t give you a proper agreement.
What If There’s No Contract?
If you’re working with a direct selling company that hasn’t provided a contract:
🚫 You are not protected under the law.
🚫 The company is violating Direct Selling Rules.
🚫 You may face problems with payments, refunds, or disputes.
🚫 Authorities can take action against such companies.
Always demand a copy of the agreement and keep it safe.
So, do direct sellers need to sign a contract with the company?
Yes, 100%. It’s not just a formality — it’s your legal shield and business passport in the direct selling industry.
If you’re a direct seller or planning to become one, make sure the company provides you with a clear, legal, and transparent agreement. It’s your first step toward building a safe and successful direct selling career.
Need expert legal guidance for your direct selling business?
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