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You contact or are contacted by an international company to represent it (or maybe you already do). You are joyful of the opportunity and you are anxious to handle the products that this principal has available and think it will be an easy opportunity to sell the products to the potential customers that you currently call on, or on a new market you are interested in pursuing. So you approach the potential principal and after some discussions your agency and the potential principal want to set up a meeting to see if a deal with you to represent it makes sense to both of you.

The excitement of getting a new international principal to represent is something you have been working on because you are aware that your customers can use the products the potential new principal currently makes or can easily start to make, and you can find new and old customers that would use this potential principal’s items.

But let’s not get too excited yet. After a number of meetings with the potential principal, it proposes a contract with you that at first glance you find attractive. You like most of it and negotiate with the potential principal on several areas of the agreement, and finally the terms look acceptable to you.

However, all too often the paragraph that sets the terms of the dispute resolution is not examined carefully by the rep because the rest of the agreement looks good. This is a classic error because many of the international and domestic principals have dispute resolution provisions that are set in a U.S. or international jurisdiction that does not give the rep an even chance at success.

In the United States and in some international jurisdictions there are a number of places that claim to have statutes that protect the rep. So one must know what the statute says about that protection. Further, many contracts with international companies contain language that requires any dispute with the principal to be handled in a jurisdiction that is in the international principal’s country or is otherwise in a jurisdiction where it is difficult for the rep to successfully get relief. Please remember that you, as the rep, need to worry about what will happen to you if the principal defaults, because the incidents where the rep is at fault for something that adversely affects the principal are almost non-existent.

So, the moral of the story is that it is incumbent upon the rep to understand the importance of the clause that establishes where it is necessary to bring a claim to protect the rep’s interests.

MANA welcomes your comments on this article. Write to us at [email protected].