Rep Agreements

What is the function of a manufacturers’ representative agreement? It is, quite literally, to get the manufacturer and representative “on the same page.”

This written agreement establishes mutually agreed upon goals and allows each party to manage the expectations of the other. And if the parties later remember those expectations differently, there is a written document to remind them of the terms to which each agreed.

A key element in establishing long-term relationships between reps and manufacturers is a balanced, win-win agreement. MANA’s specimen principal/representative agreement guidelines were written to help manufacturers and representatives create that kind of agreement.

Because each relationship is unique, arriving at a final agreement is a two-step process:

1.   Negotiating the terms of the agreement
2.  Putting those terms into correct legal language. 

We strongly recommend retaining an attorney for the second step. MANA members have access to a list of rep-savvy attorneys, and many MANA attorneys offer up to a one-hour initial consultation with MANA members without charge.

Full Time MANA Members Get Access To:
41 Page Manual for the Creation of a Rep-Principal Agreement
Sales Agency / Sub-Representative Agreement Guidelines
Sample Non-Disclosure Agreement
MANA's Guidelines for International Agreements

We also recommend frank dialog about the terms of the agreement before it is signed. If either party simply signs the other party’s agreement without reviewing it, the chances of achieving a balanced, win-win agreement are slim.

MANA’s specimen agreement includes the rationales behind each clause, which help each of the parties put themselves into the other’s shoes.

In cases where the principal has no existing business to share with the representative who is taking over the territory it may be appropriate for the principal to offer the representative a “Shared Territory Development Fee.” Holding back existing business as house accounts will often doom the new relationship before it even begins.

MANA recommends that you include the following clauses in your discussion with a rep-savvy attorney, all of which appear in the MANA specimen agreement

• Appointment and Acceptance
• Territory
• Products and Services
• Commission
• Computation and Payment of Commission
• Split Commissions
• Acceptance of Orders
• Terms of Sale
• Representative Relationship and Conduct of Business
• Term of Agreement and Termination
• Rights Upon Expiration or Termination
• Entire Agreement; Modification
• Survivability of Agreement
• Survivability of Indemnification
  Waiver
• Assumability of Agreement
• Disputes
• Notices

A fair and balanced agreement sets the stage for long-term and mutually profitable principal/representative relationships. Let MANA help you to get your relationships off on the right foot with win-win representative agreements.