Exclusive Representative Contract

An exclusive representative contract is a must if you intend to hire a sales staff to sell your product. The sales representatives are representing your company and hold a large responsibility. To protect yourself and your business, it is essential to have all sales representatives sign an exclusive contract before you commence the professional relationship.

Exclusive Sales Representative Agreement and Guide

Sales representatives on your team are essential to the success of any company. A sales force will stand as the face of your company. Those representing your business should be selected very carefully.

It is essential that your products are marketed well so that there is a positive impact on your brand. Your sales representatives need to know which products they can sell and where they can be sold.

If your company is still small or just starting, you can opt to utilize independent sales representatives. Independent sales representatives are paid only on commission. There is no monetary investment on your part. Instead, they are paid after your business is paid. You can both build and grow as a team as your business becomes more successful.

Keep in mind that any agreements made verbally can ultimately be disputed and lead to a bad relationship. You all need to certify your roles in a written contract before you make cold calls. Since the product you produce is your business’ foundation, it needs to be entrusted to the best representative.

There are some additional factors to consider when providing a sales representative agreement to your sales staff:

  • Since the sales staff is the public face of your business, all parties need to carefully review the roles and responsibilities that come along with the job.
  • All parties need to spend some considerable time reviewing the sales representative agreement. This will lessen the chance that someone did not fully understand some or all of the agreement.
  • You need to review the laws of your state regarding independent contractors. You need to make sure that you are aware of what they are and are not entitled to.
  • Before the agreement is signed, know what your goals are. Is this agreement designed to protect your information? Is the commission fair to the sales staff with the amount of time and energy needed to sell your product? Go over your terms and conditions to ensure they are meeting the needs of your business.
  • Sign two copies of the agreement.
  • Maintain your copy for your records so that you can revisit the terms later on if necessary.
  • You may want to have your agreement notarized to limit any changes to the signature of the other party.

There are some specific agreement instructions that you need to follow when you write your agreement:

Include an introduction. Include the date of your agreement, the names of every person party to the contract, and indicate the type of business you own, such as an LLC, corporation, and the like.

  • Section one should include the purpose, appointment, and exclusivity. This appoints the sales representative for the company and states that the appointment is exclusive. It will also limit the duties of the representative to specific territories and products. The product can be either an actual product or a service provided by your business.
  • Section two includes confidential information. It clearly defines what is confidential with regard to your business and details that the representative should never disclose that information.
  • The third section discusses the nature of your relationship. It states that he or she is not employed by your company nor is a partner. This is important to include because it relates highly to insurance coverage, benefits, taxes, and liability. Go over your state’s laws regarding independent contractors.
  • Section four discusses territories. It will put limits on the geographic area where the efforts of the sales representative need to be used.
  • The fifth section describes the customers the sales representative needs to seek out. It can be individuals or businesses.
  • Section six refers to the sale price of products. It explains that the company is responsible for naming the price and terms of sale by the sales representative.

If you need help with drafting your exclusive representative agreement, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law, and average 14 years of legal experience, including work with or on behalf of companies like Google, Stripe, and Twilio.