Service Contract Advice Needed

October 19, 2013 11:18 AM

I have a business selling widgets and I want to hire a similar business in another state to distribute my widgets. I want to put a very simple service agreement but I have once concern.

What if I sign a contract with a firm that has one owner and six sales people, but then after I sign the agreement all or most of the six sales people get up an leave.

What can I write in my agreement that doesn't leave me with an agreement with only a shell of a company when I thought I would have the talent and resources of six people working in my interests?

posted by otto42 to Work & Money (3 answers total)

There's really no such thing as a "very simple" long-term service contract between two businesses in different states. Especially because the normal rule in contract law is that if you draft a contract, and then there's a dispute with the other party over what the contract requires, the contract will be construed in their favor, because the assumption is that if you had wanted it in your favor, you should have written it more clearly to favor you. What you're asking for here is legal advice specific to your situation, and none of us here can give that to you, especially knowing so little about the actual nature of your business and the deal you're negotiating, and definitely without knowing the laws of the two states involved. I really think you need to work with an attorney to create a fair agreement that protects your interests and your rights.
posted by decathecting at 11:29 AM on October 19, 2013

I think the term you're looking for is "minimum guarantees," which I would mention to your attorney when they draw up the contract. Not saying the sales and distribution company would agree to that, but it's common enough to ask.
posted by Marie Mon Dieu at 11:29 AM on October 19, 2013 [1 favorite]

What if I sign a contract with a firm that has one owner and six sales people, but then after I sign the agreement all or most of the six sales people get up and leave.

You should be signing a contract that financially incentives the firm to make sales. It's not really your business if they make targets with one sales person or six. This isn't intended to be snarky but if you want management control over the sales people, hire your own sales people.
posted by DarlingBri at 4:34 PM on October 19, 2013 [1 favorite]