Sales expert witness Glen Balzer is a widely published author on distributor and representative relationships and agreements, as well as sales organizations and commissions. Here he writes on traits of successful representative agreements.
Prepare for the future. Partnerships are born during a phase of euphoria. They develop during a phase of expansion and excitement. They mature during a long period of hard work. They unwind for a number of reasons, most of which are quite natural. Upon termination, both supplier and representative must be able to go about their own respective businesses. Spell out clearly the conditions under which either party may terminate the agreement and the responsibilities of both parties after notice of termination.
The supplier and representative must both have the ability to terminate the representative agreement for cause and convenience. Sometimes termination for cause achieves instant agreement between the parties, as in cases where the representative or supplier becomes insolvent. Getting both parties to agree that a particular cause is valid is often difficult. Gaining agreement as to which party is responsible for cause is routinely more difficult. Termination for convenience eliminates an avoidable and unnecessary argument.