A sales representative is an individual who is either contracted or employed by a company (referred to as the principal) to solicit orders for goods. This person earns their income, either entirely or partially, through commissions based on the sales they generate. This definition is established under Michigan's Sales Representative Act.
The term "sales representative" is commonly used in commercial law, particularly in contracts and employment law. Sales representatives play a vital role in the sales process, and their relationships with principals are often governed by specific agreements. Users may encounter forms related to employment contracts, commission agreements, and sales representation agreements, which can often be managed using templates available through US Legal Forms.
Here are a couple of examples of abatement:
Example 1: A company hires a sales representative to promote and sell its software products. The representative earns a commission based on the sales they close.
Example 2: A clothing brand contracts a sales representative to attend trade shows and generate orders from retailers. The representative receives a percentage of each sale made through their efforts.
In Michigan, the Sales Representative Act outlines the rights and obligations of sales representatives and their principals. This act provides a framework for understanding commission structures and the responsibilities of both parties.
| State | Key Differences |
|---|---|
| Michigan | Defined under the Sales Representative Act with specific rights regarding commissions. |
| California | Similar protections exist, but additional labor laws may apply to commission structures. |
| New York | Sales representatives may have different commission rights based on specific industry regulations. |
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
| Term | Definition | Key Differences |
|---|---|---|
| Independent Contractor | A person hired to perform a specific task or project. | Sales representatives often have ongoing relationships with principals and may earn commissions. |
| Employee | A person who works for a company and receives a salary or hourly wage. | Sales representatives may not be traditional employees, as their pay is often commission-based. |
If you are considering becoming a sales representative or hiring one, it's essential to draft a clear contract that outlines the terms of the relationship, including commission structures. You can find templates for sales agreements on US Legal Forms. If your situation is complex, consulting a legal professional may be beneficial to ensure compliance with applicable laws.
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A sales representative typically works directly for a company, while a sales agent may represent multiple companies.