ASK ALISON: As a Rep, What Should I Look Out for in My Contracts? - Oct/Nov 2024

Question: As a Rep, What Should I Look Out for in my Contracts?

Answer:

That is a great question. A handshake deal may feel good, but a solid written contract is always better. It ensures you're protected and spells out the terms, leaving no room for misunderstanding.

1. Always Get It in Writing
   If it's not written, it may be hard to prove. Save a signed copy, and ensure any changes are also in writing.
   
   
2. Post-Termination Commissions
   Make sure you're paid commissions on deals closed while you worked to ensure that upon termination or resignation you receive them. 
   
   
3. Authorized Signatures
   Ensure the contract is signed by a corporate officer, not just an individual, and all changes are initialed.
   
   
4. Non-Solicitation Clauses
   Protect yourself with a clause preventing the company from poaching your sales employees, sales associates or sub-reps for 1-3 years after parting ways. 
   
   
5. Severance Pay
   Negotiate for extra severance as a safety net if the job doesn’t work out.
   
   
6. Litigation Location
   Watch out for clauses requiring you to sue in the company’s state—try to keep legal matters local to where you live.
   
   
7. Commission Clarity
   Ensure accurate records are kept on your commissions and negotiate to prevent rate cuts without your approval.
   
   
8. Exclusivity and House Accounts
   Confirm your exclusivity in your territory, how non-commissionable house accounts are treated, and for the duration of the contract that no new house accounts will be added after the working relationship commences.
   
   
9. Payment on Shipments
   Ensure you get paid on all accepted orders prior to termination that are shipped thereafter.
   
   

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Have a question for Ask Alison? Email Alison at acody@mafsi.org.