Talking About the End at the Beginning:
The Critical Importance of Negotiating the Termination Clause
Thursday, February 21, 2019 @ 3 p.m. ET ∙ 2 p.m. CT ∙ 1 p.m. MT ∙ 12 p.m. PT
When sales reps enter into a new a contract with a principal, they’re most focused on what’s happening now, not what will happen when the relationship ends. Deep down, everyone knows that at some point the relationship will end, but no one likes to think about that when they’re looking forward to a bright, shiny new venture together.
Fast forward some years into the future. You’ve spent substantial time, money and resources to develop sales of the principal’s products in your territory. You’ve earned significant commissions, and your principal has profited handsomely from your efforts. Then, it happens:
- The principal changes ownership or sales philosophy and now wants to go direct.
- The principal decides you’re making too much money in commissions.
- The principal decides some other rep can sell even more than you do.
So now the principal wants to terminate your contract.
What disincentive does the principal have to not terminate you? How will you be compensated fairly if there is a termination? What about those soon-to-be issued orders on which you’ve spent the last 18 months working to design the product into the customer’s application? What about that long term agreement or blanket order your customer signed with the principal a few months ago? Will you get any commissions for your efforts after termination?
On this teleforum, we will talk about:
- Insights about the termination clause from attorneys who prepare and negotiate contracts between reps and principals, and who litigate post-termination disputes.
- Important discussions and steps to take before the contract is even drafted. Effective approaches to negotiating the termination clause and post-termination commissions.
- Preserving your rights if the principal makes a unilateral change mid-stream. The significance of state independent rep protection statutes to terminations.
Leslie Marell is a business and commercial law attorney with over 25 years’ experience as in-house and outside counsel. She represents OEMs, distributors, independent sales representatives, manufacturers and customers in the electronics, technology, manufacturing, oil and gas, health care, and medical device industries in a wide array of business transactions. Marell also conducts seminars throughout the United States to educate companies and their employees about the meaning of the clauses in their business agreements and how to negotiate them with their customers and suppliers. Contact: (310) 372-8663 or Leslie@marell-lawfirm.com.
Eric S. Engel has been a member of Conkle, Kremer & Engel, Professional Law Corporation in Los Angeles for more than 30 years. He is a trial and appellate business advocate for representatives and principals. His career highlights include being lead trial counsel for a terminated rep in the first precedent enforcing California’s right to three-times unpaid commissions, upholding the jury verdict of $2 million trebled to $6 million plus fees. Reilly v. Inquest Technology, Inc., 218 Cal.App.4th 536 (2013). Eric has negotiated resolutions of disputes between reps and principals, and worked with reps and principals to draft agreements to avoid future disputes. Contact: (310) 998-9100 or email@example.com.
The teleforum is free, but you do need to register at: www.saleswise.ca/mana
You will then receive all the information you need to join the call.
Even if you can’t attend, please register. That way, we will send you the recording link so you can listen at your convenience, and you won’t miss a thing.
To “attend,” the only requirement is to register in advance online. Then, on the scheduled date, just dial in from the office, the car (but not while driving, please) or anywhere, using the provided access number. (NOTE: The access number is NOT toll-free, but if you have an all-inclusive long-distance calling plan, there should be no cost.)
These teleforums are presented by Nicki Weiss of Sa1eswise and MANA.