Once the damage has been fully covered, the collaboration between the two parties can go on. Even if the breach causes a financial loss for the sales organization, the agent should have a clause in his or her contract that allows the payment of the damages, either directly or through sales commissions. To protect against giving the sales organizations too much leeway in deciding what constitutes a material breach, sales agents should insist on having clear definitions of material breaches written in the sales agreement. The main risk from a sales professional's perspective is that the sales organization will have the right to withhold any owed commissions even if it hasn't sustained any financial damages. Any sales agent should carefully revise his or her sales agreement to make sure that they are not breaking any clauses that may constitute material breaches. Some of the specified breaches are the breaking of credit card regulations, any attempts to fraud, and the violation of an exclusivity clause. Many contracts for sales agents clearly specify what can be considered a material breach. Actions That Constitute Material Breaches Even if the two parties have collaborated for a long time, if the agent breaks the exclusivity clause and works with a different organization, the law fully backs the immediate termination of the contract. In collaborations between sales professionals and sales organizations, typically a break of the exclusivity clause results in immediate cancellation of the agreement. Much stricter rules are applied when it comes to exclusivity clauses.
#BREACH DEFINITION PROFESSIONAL#
If a sales professional wrongfully reports sales numbers to a sales organization one time, three years into their collaboration, the time and resources invested by both parties in all that time is enough for this isolated incident to be forgotten. If the two parties have collaborated well over a significant period of time, a single breach of the less crucial clauses in the contract would likely not be grounds for termination. They also haven't collaborated enough to have future earnings depending on their collaboration. In this situation, such a breach would be a clear sign that the professional will not have a productive relationship with the sales organization in the long-term future. Also, the two parties haven't yet invested time and resources in the agreement.įor example, if a sales professional associates with a sales organization and breaks an agreement clause in the first month of partnership, the organization is entitled to immediately cancel the entire contract. The main reasoning for that is the likelihood that, if the relationship started on such bad terms, it is very unlikely that the situation will significantly improve in the future.
In the initial stages of the relationship between two parties, even minor breaches of the contract's clauses may constitute a valid enough reason for the termination of the contract.
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