Overseas Sales Agents

Posted on June 30, 2008 by Sheppard Mullin

Questions to ask When Evaluating the Agent's Contract

  • Is the agent's territory well defined?
  • Are products covered well defined?
  • Are fees contingent on "contract award" or "sales"?
    • Does "contract award" include funding and orders?
    • Are "sales" defined to include receipt of payment?
  • Will payment be made:
    • In the name of the business entity with which you are contracting?
    • In the country in which the services are being provided?
    • To the established business address of the agent set forth in the contract?
    • Directly into an in-country account in the agent's business name?
  • Is there a:
    • Disclaimer of any undisclosed principals?
    • Prohibition against fee splitting?
    • Representation with respect to FCPA compliance?
    • Warranty of compliance with all U.S. laws and regulations?
    • Requirement to file periodic reports of activities?
    • Requirement to report on contacts made on your behalf?
  • Do the fees appear reasonable:
    • Comparable to similar industry arrangements?
    • In comparison to activities and risks
    • Limited to amounts permitted under, or satisfy the conditions of, FMS or FMF agreements?

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