Brokerage Contract Law and Legal Definition

A brokerage contract is a written contract by which a broker is employed as an agent to make contracts in the name and on behalf of the principal. It will contain details of the terms of the business relationship between a broker and his/her principal. Upon receiving signature from both parties, a brokerage contract becomes a working document to which both parties must abide. Non fulfillment of conditions stipulated in a contract would make the contract null and void. A broker usually receives a commission under the brokerage contract. It is also called as a brokerage agreement, dealer agreement, or a broker agreement.

A typical brokerage contract would cover issues such as acquisitions, proprietary investment opportunities, sale, mergers, re-capitalizations, management buyouts, financing or other typical business issues.