When sales reps enter into a new contract with a principal, they’re understandably most focused on what’s happening right now:

• Will it be an exclusive?
• What will the territory be?
• What will the carve-outs be?
• What will the commission rates be?

Few sales reps focus on what will happen when the relationship will end. And make no mistake, it will end — the question is when and what will happen when it does.

Fast forward some years, when some of the excitement of the new relationship has subsided. You’ve spent huge amounts of time, money and resources to develop sales … Read the rest

The Scenario

You had a good year — you finally got that huge OEM account with AcmeCo qualified and the purchase orders are starting to roll in. You figure your hard work over the past 18 months is finally starting to pay off and you’re looking forward to your well-earned reward.

The problem is your principal is starting to think hard about all those commissions you’re about to make. A little friction is starting to build as your principal seems to be a bit slow in making payments on the new AcmeCo purchase orders, making excuses rather than payments. The … Read the rest

This is the second of two articles covering the subjects of restraint of trade and trade secrets. This article examines trade secret protection.

Yet another potential hurdle in the rep’s efforts to avoid or limit the principal’s desire to restrain post-termination competition arises in the form of the need to protect trade secrets, which is recognized in some manner by every state. Most states have adopted statutes that are based on the Uniform Trade Secrets Act (UTSA), and as of 2016 there is a new federal Defense of Trade Secrets Act, so there are some common features of trade secrets … Read the rest

This is the first of two articles covering the subjects of restraint of trade and trade secrets. The second part, which will appear in the November issue of Agency Sales, examines trade secret protection.

“Legally Speaking” articles in Agency Sales magazine have often emphasized the importance of carefully crafting the terms of independent sales representatives’ contracts with principals to avert any number of potential problems. Where possible, reps should use their own terms of agreement. But realistically, principals often want to impose their own terms. Reps naturally focus on the commission terms, territory, and exceptions such as house accounts … Read the rest

“Oh yeah? Prove it!” Among schoolyard taunts, that one has a germ of truth. If you can’t prove you’re right, you probably won’t win. If you probably won’t win, there’s usually little sense in starting the fight — you’ll waste your time and money.

So if you’re an independent representative or a principal in a fight, how do you prove you’re right? Evidence. For lawyers, evidence is ammunition — if we have enough of the right kinds of evidence, we can win the battle for you. And if the other side understands that you have the evidence, a reasonable settlement … Read the rest