1. APPOINTING AN AGENT/ SALES REPRESENTATIVE FOR THE U.S. (OR PART OF IT)
John R.F. Baer
Greensfelder, Hemker & Gale, P.C.
Chicago, Illinois USA

2. Entering the U.S. Market
Appointing an agent or sales representative any be the easiest way to enter the U.S. market
European companies often do not do It right way

3. EU Commercial Agency Laws
Very different from U.S. laws in many ways
Cover agents who can bind a principal as well as those who cannot bind
Termination compensation (indemnity)
These laws often are a shock to many American companies

4. U.S. Sales Representative Laws
35 States and Puerto Rico
Generally apply to principals who sell products at wholesale for resale and use independent sales representatives to solicit orders and compensate them on a commission basis
Some cover solicitation for services, and some cover employees paid on a commission basis

5. Other Elements of the Laws
Contract in writing and some require a signed receipt
Payment of commissions during term and on termination
Two require “good” or “just” cause to terminate
Critical: payment of commissions on termination must be timely. Failure could result in damages of two or three times the commissions due, plus attorney’s fees

6. The Common Law
The common law also affects sales representative contracts
Where contract is silent on post-termination commissions, the “procuring cause doctrine” may afford a representative compensation

7. Drafting the Agreement
Basic provisions
Critical: Payment of commissions on termination must be covered
Be careful to not make it a franchise

8. Organizing Contract Termination
Terminate the right way – follow the contract terms
Pay commissions due at time of termination promptly as required by the law
Pay commissions that become due after termination promptly as required by the law