In many business partnerships, negotiations and transactions are often handled by representatives of the company.  This is very common when it comes to transactions between manufacturers and suppliers.  In such arrangements, the manufacturing company and the supplying company will assign representatives who will handle a variety of tasks together.

In many cases, the representatives may choose to formalize their relationship through a representative agreement.  A representative agreement is basically a contract that covers many different business issues, such as disclosure and confidentiality, non-litigation clauses, and terms for negotiation.  Representative agreements typically last only as long as the parties will be working together.

What are the Advantages of Using a Representative Agreement?

In many cases, a representative agreement can have several distinct advantages for the parties involved in the partnership, including:

  • Facilitates communication during negotiations and other important stages of the partnership undertakings
  • Helps avoid a premature termination of the representatives’ relationship
  • Helps reduce legal expenses and management resources when the partnership formally terminates

In order to reap the full benefits of a representative agreement, the agreement should be put in writing and signed by all the important actors in the relationship.  This creates a document for reference which can be referred to in the future.  Also, written contracts are much easier to enforce than oral agreements.

What if a Representative Agreement is Violated?

In the event that a representative agreement is violated, basic breach of contract principles may apply.  The non-breaching party may be entitled to a number of different options when it comes to remedies.  This will depend on the specific terms of the agreement, as well as the nature of the violation.

In general, damages may be awarded to compensate the non-breaching party for economic losses caused by the broken agreement.  Or, equitable remedies such as an injunction may be available, which may require the breaching party to take action in fulfillment of their contractual duties.  Standard contract defenses will usually apply as well.

Do I Need a Lawyer for Help With a Representation Agreement?

Representative agreements can be beneficial for manufacturers and suppliers, and in some cases the agreement may even be necessary for the efficient operation of the partnership.  If you need assistance with drafting, reviewing, modifying, or enforcing a representative agreement, you may wish to contact a lawyer for advice.  An experienced contract attorney in your area can assist you with the agreement, and can represent you in court if legal action becomes necessary.