The Importance of the Termination Clause


The negotiation of a manufacturers’ representative agreement is an essential step to begin the sales relationship of the principal and the manufacturers’ representative. While most every representative understands the importance of negotiating the terms concerning how their commissions will be calculated and paid, it is just as important to negotiate how the sales relationship can terminate. This is commonly referred to as a termination clause.

Negotiating the termination clause at the outset can be the most important term of the entire sales relationship for the manufacturers’ representative. Without a strong termination clause, a rep may find themselves with little to … Read the rest