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Understanding the Procuring Cause Doctrine and Its Legal Implications
Definition & Meaning
The procuring cause doctrine is a legal principle that determines entitlement to commissions based on the actions of a salesperson or agent in securing a sale. Under this doctrine, an employee is entitled to receive commissions from sales made to a buyer who is ready, willing, and able to purchase, regardless of whether the employee is still employed at the time the commission is paid. This doctrine is often applied when a contract does not specify the terms regarding post-termination commissions, emphasizing the importance of good faith and fair dealing in sales agreements.
Table of content
Legal Use & context
The procuring cause doctrine is primarily used in employment law, particularly in the context of sales and commission-based roles. It applies to situations where sales representatives or agents seek compensation for their efforts in facilitating sales, even after their employment has ended. This legal principle is relevant in civil law, particularly in disputes involving commission payments and contract interpretation. Users may find it beneficial to utilize legal templates from US Legal Forms to manage related documentation effectively.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
(Hypothetical example) A sales representative works for a company and successfully negotiates a deal with a client. Even if the representative leaves the company before the deal is finalized, they may still be entitled to a commission because their efforts were the procuring cause of the sale.
Relevant laws & statutes
Key cases related to the procuring cause doctrine include:
Reed v. Kurdziel, 352 Mich. 287 (Mich. 1958) - Established the principle that commissions are due based on the procuring cause.
Merryman Sales v. Mid-West Fabricating Co., 1999 U.S. Dist. LEXIS 618 - Affirmed the right to commissions after termination under Michigan law.
State-by-state differences
State
Procuring Cause Doctrine Application
Michigan
Commissions are due whether or not the representative completed the sale.
Wisconsin
Final consummation of the sale is generally not required for commission entitlement.
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
Comparison with related terms
Term
Description
Commission Agreement
A contract that outlines the terms under which commissions are paid.
Agency Relationship
A legal relationship where one party acts on behalf of another, often involving commission payments.
Common misunderstandings
What to do if this term applies to you
If you believe you are entitled to commissions under the procuring cause doctrine, consider the following steps:
Review your employment contract for any clauses related to commissions and termination.
Gather documentation of your sales efforts and any communications with clients.
Consult with a legal professional if you encounter disputes regarding commission payments.
Explore US Legal Forms for templates that can help you draft necessary documents.
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