What Is A Sales Representative Agreement
In addition to these key provisions, there are several other clauses, such as the choice of law and separation you should include, so be sure to speak to your lawyer before concluding your distribution agreement. The first point that needs to be clarified in a distributor representative contract, even if it has already been discussed, is whether the representative is an independent contractor or a staff member. If you decide to set a sales quota for your representatives, you should also include this information in the agreement. Past performance is often a good indicator of reasonable minimum expectations for revenue targets. Finally, the agreement should specify what a representative should do after the termination. The agreement should require agents to stop presenting themselves as representatives of the company and to return the equipment provided by the company. They may also include a non-competition clause that prevents the employee from working for a competitor until a reasonable period of time expires. This will prevent the representative from sharing confidential information with your competitors. Depending on the situation, the representative cannot be reimbursed for the cost of labour. The agreement should indicate whether a representative`s fees can be reimbursed and set any restrictions on eligible expenses. Second, the duties and responsibilities of the representative are clearly defined.
Examples of such responsibilities may be: 8. Immediately return all materials and models provided by the company to the representative if one of the parties terminates this contract. The termination rules vary according to the Landers. While some states allow a distributor contract that gives your company the power to terminate distributor contracts at any time, other states require employers to give up to 90 days` notice. Check state rules before writing your sales contract or terminating an existing agreement. An independent contractor is a person who maintains the means and methods of the work to be done. On the other hand, if the employer controls not only the work that a person does, but also the way in which that work is done, that person is a worker. The agreement should also specify when the representative would receive compensation for his work. As a general rule, commissions are only paid after the product has been delivered to the customer. In certain circumstances, commissions cannot be paid to the agent. 7.
Providing a 30-day period for the company if the agent intends to terminate the contract. 6. Keep in touch with the company by phone, email or other agreed-upon means of communication at an appropriate frequency to discuss sales activities in the area. A significant portion of each representative agreement explains how the representative is paid. The agreement should determine how the commission is calculated, the basis of the commissions and that it is the only compensation that the representative will receive apart from bonuses or other incentives. Below are more details on the seven clauses that should be included in your commercial contracts. You can also specify other restrictions, for example. B where products can be sold. Representatives may be limited to a particular region or type of customer.
You can attach a list of existing clients that the representative can contact. The agreement should also indicate how often your company will send statements to the representative about the status of the commission account and will give the representative some time to object to the content of the statement. If your company sells a variety of products or services, you can indicate which products your representative can sell. If you want to restrict the products a representative can sell, you should attach a complete list of approved products to the agreement and update the list regularly when products change.