Sales Rep Agreement - Σύμβαση πωλήσεων επι προμηθεία

 Sales Rep Agreement - checklist

contents

1. the contracting parties

2. the products
3. the territory
4. markets
5. house accounts

6. exclusivity
7. compensation
8. payment
9. term
10. price of products
11. restraint of trade
12. performance
13. expenses
14. reporting requirements
15. scope of authority
16. intellectual property
17. confidentiality
18. operational issues
19. absence of an employment relationship
20. freedom to contract

1. the contracting parties

1.1. Company A

(Insert the compay’s contact details)
Name: ______________________________
Address: ______________________________
______________________________
______________________________
Tel: ______________________________
Fax: ______________________________
Email: ______________________________

1.2. The Sales Rep:
(Insert the Sales Rep’s contact details)
Name: ______________________________
Address: ______________________________
______________________________
______________________________
Tel: ______________________________
Fax: ______________________________
Email: ______________________________

1.3. If the Sales Rep is a limited liability company, should the Agreement bind any individuals?

    1.3.1. If the Sales Rep has no assets to speak of, it would not be fair for its shareholders to hide behind a shelf company.

    1.3.2. Consider binding them for selective clauses, such as the restraint of trade, confidentiality and intellectual property protection.
2. the products
2.1. Specify the Products that will be subject to the Agreement.
   2.1.1. What Products does Company A presently sell?
  2.1.2. What products are presently under development?
  2.1.3. What products may be developed in the future?
3. the territory
3.1. Specify the Sales Rep’s Territory.
4. markets
4.1. Specify the specific markets into which the Sales Rep may sell.
Note: This is only relevant if you wish to prohibit the Sales Rep from selling into certain markets.
5. house accounts
5.1. Are there any specific customers that are off limits to the Sales Rep?
6. exclusivity
6.1. Will the Sales Rep be Company A's exclusive Sales Rep for the specific products, in the specific territory and for the specific markets?
Obviously, with all of these variables, there are many permutations and combinations. Always opt for the simplest solution. The simplest solution is that the Sales Rep is a non-exclusive Sales Rep. The Sales Rep will have to earn exclusivity through their performance. If the Sales Rep does well, Company A will have no incentive to appoint other representatives. Company A should not grant exclusivity to a new Sales Rep in an as yet unproven relationship.
7. compensation
7.1. Base Commission.
7.2. Performance incentives.
7.3. Draw against commission.
8. payment
8.1. When is the compensation paid?
9. term
9.1. Specify the term of the Agreement.
A one-year term is recommended that would automatically renew on a year-to-year basis unless either party wished to cancel for any reason upon notice to the other party 90 days before any anniversary date. Better still would be a six-month trial period. Company A won’t encounter too much difficulty if it could cancel the agreement in six months or even a year. Generally, sales reps work at the pleasure of the party engaging them. They have no longevity. If the Sales Rep insists upon longevity, Company A should include objective performance criteria (see section 12).
10. price of products
10.1. Company A normally sets the price of the Products.
11. restraint of trade
11.1. Specify whether the Sales Rep can act for other companies in respect to the same products, markets and territory.
11.2. Will the restraint apply only during the term of the Agreement or for a period after the term?
12. performance
12.1. If the term of this Agreement is longer than one year, you must insert objective performance criteria. The purpose of objective performance criteria is to give Company A grounds for termination prior to the normal expiration date.
13. expenses
13.1. Will Company A be reimbursing the Sales Rep for expenses? If so, this issue needs to be covered.
Cover this simply. For example: The Sales Rep shall not incur expenses for Company A except with Company A's prior approval and the Sales Rep shall comply with Company A's expense reimbursement policy from time to time in effect.
14. reporting requirements
14.1. State what types of reports you want the Sales Rep to supply and their frequency.
15. scope of authority

15.1. Every sales rep agreement contains standard clauses that limit a sales rep’s power and authority to act for its principal. Remember that under the law, a principal can be held liable for the acts and omissions of its sales rep. That’s why these clauses are so important. See an example below:

All orders shall be at such prices and upon such terms as Company A may, from time to time, establish. All orders shall be subject to confirmation or rejection by Company A, in its sole and absolute discretion. After Company A confirms an order, Company A may agree with the customer to change the order. The Sales Rep has no authority to enter into agreements, or confirm orders, for Company A. The Sales Rep shall not change or cancel orders unless it has Company A’s written consent beforehand. The Sales Rep shall not make any representations or warranties to the customer, except as Company A may expressly authorise in writing. The Sales Rep shall always comply with Company A’s sales policies. The Sales Rep shall not receive payments for Company A without Company A’s written authorisation.
16. intellectual property
16.1. To what extent will the Sales Rep assist Company A in developing new products?
16.2. Whenever a person assists another person in creating a new product, you must deal with the issue of proprietary rights in the new product.
If the Sales Rep seeks to own or share rights to new product developments, this is a complex issue, but make sure that it is covered in the initial contract and not open to future negotiation. It is too risky in the sense that you may develop a product only to find later that the Sales Rep asserts a claim for compensation.
17. confidentiality
17.1. Is confidentiality relevant to this relationship? Will the Sales Rep have access to confidential information?
18. operational issues
18.1. Insert any key operational issues that you wish to enshrine in the Agreement.
The operational issues are critically important to get right. But you normally don’t enshrine them in a legal contract. They will happen anyway and besides, they quickly become dated as the relationship evolves. You can include a few key operational principles that you wish to enunciate to avoid any misunderstandings.
18.2. You could include a generic clause stating that the Sales Rep shall provide such services as are customarily provided by a sales representative who is appointed to promote, market and sell products for its principal.
18.3. You can mention some specific services that the Sales Rep will pro-vide.
18.4. You might also include the basic outline of how an order is processed.
19. absence of an employment relationship
19.1. Cover this with a standard clause.
20. freedom to contract
20.1. Cover this with a standard clause.

Prepared by: Robert Auerbach P.O. Box 34-555 Birkenhead, Auckland 1330 New Zealand Tel: +64-9-419-2214 Fax: +64-9-418-3651 E-mail: robert@auerbach.co.nz Website: www.marketnewzealand.com/auerbach

Disclaimer:

These checklists are provided for information purposes only and are no substitute for professional advice, which should be sought prior to entering into any transaction. New Zealand Trade and Enterprise (NZTE) has not verified these checklists and makes no representations as to the completeness, correctness, currency, accuracy or fitness for purpose of the information, or the person that prepared the information. Accordingly, NZTE will not be responsible for any damage or loss suffered by any person arising from the information whether that damage or loss arises from negligence or otherwise.