Rep Agreement Act

The Rep Agreement Act: Everything You Need to Know

As a business owner, it’s likely that you’ve entered into agreements with sales representatives to help sell your products or services. These agreements are meant to be mutually beneficial, providing the representative with a commission while the business gains access to valuable sales channels.

However, disputes can arise when one party feels that the other has breached the terms of the agreement. To help prevent these disputes, the Rep Agreement Act was enacted in 1984.

What is the Rep Agreement Act?

The Rep Agreement Act is a federal law that applies to sales representative agreements. It is designed to provide a framework for these agreements, outlining the rights and responsibilities of both parties.

The act requires that written agreements be provided to sales representatives before they begin selling a product or service. These agreements must contain specific information, including the commission rate, payment terms, and termination provisions.

What are the benefits of the Rep Agreement Act?

One of the biggest benefits of the Rep Agreement Act is that it provides clarity for both parties. The act establishes clear guidelines for how sales representative agreements should be structured, which can help prevent disputes and misunderstandings.

The act also provides protection for sales representatives. For example, if a business terminates a sales representative without cause, the representative is entitled to receive a commission for sales that would have been made during the termination notice period.

What are the potential drawbacks of the Rep Agreement Act?

While the Rep Agreement Act provides many benefits, there are some potential drawbacks to consider.

First, the act only applies to agreements that are in writing. If you enter into an oral agreement with a sales representative, you may not be covered by the act.

Second, the act can be complex and difficult to navigate. If you’re not familiar with the legal requirements of the act, it’s possible to inadvertently breach the terms of the agreement.

Finally, the act may not apply in all situations. For example, if you’re selling products or services in a state that has its own sales representative agreement laws, those laws may take precedence over the Rep Agreement Act.


Overall, the Rep Agreement Act is an important law for businesses that work with sales representatives. By providing clear guidelines for these agreements, the act helps prevent disputes and protects the rights of both parties.

If you’re considering entering into a sales representative agreement, it’s important to consult with an experienced attorney who can help you navigate the legal requirements of the Rep Agreement Act. By doing so, you can ensure that your agreement is legally sound and provides the protection and benefits that you need.