PTRA - Power-Motion Technology Representatives Association

Contract Information

There are still some individuals working in this industry who go back to a time when the only contract needed between a manufacturer and a representative was a handshake.

In today's business world, with change taking place as rapidly as it does, managers often go to another company on short notice. Those companies that have not bound their business relationships to the clear definitions of written contracts may find themselves deep in controversy and litigation, which can take months or even years to unravel.

We are faced with these realities in our global business world:

•	Manufacturing firms are merging A company we started out doing business with five years ago can be an entirely different one today. And, the difference could very well be unfavorable.
•	People change faster than companies Most manufacturing companies have experienced significant changes in sales or marketing management (from district on up to headquarters) in the last five years.
•	We all have short memories What we started out promising to do, and being promised would be done for us, becomes more hazy and complex with each passing year. We have a tendency to forget (without reference to something in writing) what our original intent was when we first discussed our mutual responsibilities.
•	Our needs change Our outlook changes. Business gets more and more complicated. None of us is the same today as we used to be. And, as a result, our relationships fluctuate over the years.
•	Unlike many years ago, most representative firms today have become business entities Rep firms are operating on a long-term basis and providing their principals with continuity of management. Longer-term contracts ensure that continuity.
•	Government agencies constantly look over our shoulders Government requirements make it mandatory that we put everything into contract language to protect ourselves from future problems or any kind of litigation. So-called "Sales Representatives Protection Act" legislation has as its recurrent theme: "Put it in writing."

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What to say in the contract
What to cover? The sample contract that follows provides a set of guidelines that can serve you as it has served manufacturers and manufacturers' representatives in many industries. While it is not one-sided or biased, it can obviously be adapted to serve the particular needs of your industry segment. It provides recommendations and suggestions for contract language that will positively reinforce the best type of agreement.

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How to start
After the interview and mutual agreement that there is a healthy "mix," the manufacturer and rep should review this contract format together and discuss each area in detail, making notes as to changes, additions, deletions.

Following this preliminary approach, each party should then review the contract separately to see if there are any items not included that are required as part of their agreement.

Then both parties should call in counsel to review and finalize the agreement. This detailed, painstaking process is more meaningful than a handshake. And, it is a more professional approach that can add lasting value to business relationships.

Sample Contracts

The following documents are available in PDF format for your review.

Sales Representation Agreement — PTRA Specimen Only
Employment Agreement — PTRA Specimen Only
Sub-Representative Agreement — PTRA Specimen Only

WARNING: Professional advice should be obtained before using these specimen contracts. The Association is not engaged in rendering legal advice, and advises you to consult with your attorney before entering into any agreements.