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 … Read the rest
Getting together with other people who will be involved with a manufacturers’ representative (manufacturers’ rep) as an employee or independent contractor (sub-rep) should be done with forethought by both the manufacturers’ rep and sub-rep from the beginning when they are first considering an alignment of resources.
The manufacturers’ rep who will usually be the one who has the direct relationship with the principal should have a full understanding with the sub-rep and the sub-rep should know what is expected of him or her.
First, let us look at the relative experience the sub-rep has in the field the manufacturers’ rep … Read the rest
Because of the growing representation of foreign entities by United States, Canadian, Mexican or South American sales representative firms (rep firms) it is important for rep firms to read and understand all of the terms of an agreement submitted by a foreign entity and for the rep firm to protect itself under the agreement. It is also important to understand the difficulties that may arise when suing and/or collecting on a judgment against a foreign entity. Some of these issues are highlighted below:
There are often subtle, but critical, distinctions in the language used in and the ultimate … Read the rest
I am a traditional trial lawyer based in the United States and primarily engaged in general business litigation. A sub-specialty of our firm is sales representative law. Many of our cases involve contract interpretation and performance issues, including customer/supplier warranty disputes. I was in practice a long time before international law and the international arbitration of disputes became important to our clientele. With globalization in the ever-shrinking world, however, our clients’ dealings with companies from around the world have increased rapidly and, as would be logical, disputes with these companies became as statistically common as with domestic companies.
As part … Read the rest
Not too long ago, the usual scenario for a start-up rep firm and/or for that matter established ones, whether it is one-person or a firm with multiple sales personnel, was to gravitate towards an industry familiar to them as a result of having worked in or with that industry in some fashion. And, most often, the initial principals were almost always domestic companies.
Today, however, most reps have been exposed to an opportunity to represent a foreign principal and many have undertaken this representation. The differences between repping a domestic principal and a foreign principal can be dramatic and often … Read the rest
Most reps are familiar with the term “non-compete provision,” but many do not understand the impact a pre- and post-termination non-compete can have on a rep’s business.
To some extent, all non-competes inhibit the rep’s ability to run its business. The scope is usually defined by the specific prohibitions, e.g., length of time, geographic territory, the principals and/or customers, hiring of personnel and other matters. Sometimes there is a non-compete or other prohibition that can be imposed on a principal (e.g., granting the rep the exclusive right to sell).
Most jurisdictions, at least to some extent, allow
As part of the evolutionary process and in anticipation of inevitable disputes, the desire, if not the requirement, of at least some parties to agreements is to have a method of dispute resolution with which they are familiar, usually in the jurisdiction in which they reside. Thus many of the proposed or executed contracts presented to our firm by our clients contained provisions for dispute resolution under foreign laws and in various foreign courts or by international arbitration. These contract terms are often alien to the clients’ (and many lawyers’) way of thinking and past experiences. While some of the … Read the rest