It’s an old, even classic dilemma for independent sales reps, but it continues to play out across the country. Fueled by his own sweat equity over long hours and on his own nickel, an industrious rep scores a big customer contract for a principal. Rather than treating the rep to a steak dinner and a pledge to honor its contract by commissioning the rep on this new-found business, a notice of termination is issued. The principal then brushes off the rep: “We’ll pay you everything we owe you as of today, and best of luck in your future endeavors. What’s that? The new contract won’t be signed until tomorrow? You don’t say!”
In a sales rep contract drafted without attorneys and recently described by an appellate court as “doggone messy,” a pet supply manufacturer and its independent sales representative agreed the rep could be terminated “for cause” only under certain circumstances. As is so often the case, once the rep, Profit Pet, grew sales and the relationship was prospering, the principal, Dogswell, sought to tighten the contract terms and exercise more control. Not surprisingly, Profit Pet resisted, leading to its termination.