Beware of Principals Invoking Force Majeure to Avoid Paying COVID-19 Sales Commissions

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Demand for the sale of some products skyrocketed to record levels as a result of the unforeseen COVID-19 virus.

Manufacturers’ representatives who were fortunate to have product lines in PPE, medical equipment and other high demand Covid related products experienced significant spikes in their sales this past year. While increased sales should result in increased commissions, this was not always the case for some Covid related sales commissions. While most principals will continue to pay the earned commissions to their representatives, some may be tempted to invoke a force majeure clause contained in some sales commission agreements as a legal … Read the rest

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