Occasionally, a sales representative becomes involved in a serious dispute with a principal. By “serious” I am referring to a dispute with potentially significant negative financial consequence to the representative. Examples of such would be a reduction in an agreed commission rate, the reduction or elimination of a representative’s territory, termination of the relationship, or an outright refusal to pay earned commissions. If informal negotiations prove unsuccessful, the parties will be faced with arbitration, litigation, or mediation as the means to resolve the dispute. This article discusses the features of these three types of dispute resolution.

Mediation refers to negotiations … Read the rest

Many of our sales representative clients initially give very little consideration to the perceived “boiler-plate” clauses that appear near the end of their principals’ “standard” sales representative agreements. Their focus is on the granted territory, the commission rate, designation of house accounts and similar provisions which all reps deem of most importance. Nearly every sales representative agreement that I have seen contains an indemnification clause; but often the sales rep has not even read it, considering this clause to be just another unimportant “boiler-plate” provision. We counsel our clients that such perception is false. The existence and scope of the … Read the rest