CHAPTER 17
Sales Representative Contract associated with the sale of goods is a contract by which the company hires a local representative to sell its products. When operating overseas, a company should treat the hiring of a sales representative as carefully as if it were a marriage. The representative should be met personally, the relationship should be established over a period of time, and it should be monitored constantly. The hiring of a sales representative is a step up in commitment to selling in a foreign market—be certain you are ready to take this step.
ANOTHER COMMON CONTRACT
Sample: Contract for Services of Sales Representative This Agreement is made on [date] between [name], [a/an] [individual or type of entity and nationality or place of formation] of [address] (the “Manufacturer”), and [name], [a/an] [individual or type of entity and nationality or place of formation] of [address] (“Sales Representative”).
This clause should identify the parties signing the agreement. To ensure that there is no misunderstanding, the full name of each party and the party’s business address should be given. If a party is an entity, partnership, corporation, limited company, or otherwise, the type of entity should be disclosed here. In international contracts, the description of each party includes the party’s nationality. Examples of descriptions: “a Société Anonyme organized and existing under the laws of France,” “a partnership organized and existing under the laws of the State of California in the United States of America,” or “an individual who is a citizen of Singapore.”
COMMENT:
The parties acknowledge that the Manufacturer produces and sells [describe goods or the goods listed in Exhibit A attached to this Agreement] (the “Goods”) and seeks to engage the Sales Representative to offer and sell the Goods for the Manufacturer in [country]. Therefore, the parties agree as follows: C O M M E N T : Commonly called the recitals, this paragraph sets out the intent of the parties and sometimes the definitions, such as of the goods, of terms used in the contract. By tradition, the recitals are not numbered, but parties need not stick to tradition if numbers are more convenient for reference. A P P O I N T M E N T . The Manufacturer engages the sales representative to sell the
Goods for resale in accordance with the terms and conditions of this Agreement to persons and companies that are doing business in [country].
This clause assumes that sales are being made for purposes of resale. If the goods are to be sold to consumers at the retail level, additional clauses must be added to this agreement to cover obligations related to consumer sales. This clause should also be amended if the manufacturer is granting exclusive sales rights to the sales representative. For exclusive rights, the contract should provide that
COMMENT:
138
