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A Bad Rep? They sell your products, but their contracts can sell you down the river.

By Jacquelyn Lynn

Opinions expressed by Entrepreneur contributors are their own.

Whether they are employees or independent contractors, salesrepresentatives can expand your market and boost the bottom line-orthey can cost you a bundle in commission disputes and lost sales.You can avoid those problems with well-drafted sales representativeagreements, says James B. Sherman, an attorney with the law firmWessels & Pautsch PC in Min-neapolis. Sherman, who specializesin representing management in labor and employment cases, sayshe's amazed at how frequently companies fail to clearly definethe terms of their relationships with sales reps at the outset andthen run into problems later.

"A well-drafted rep agreement is critical," saysSherman, adding that companies in many states face severepenalties, including attorney's fees and punitive damages,should a sales rep prevail in a commission dispute. The key pointsany rep agreement should cover include:

The rep's duties.Clearly describe what you expect the rep to do to avoid anyperformance-related disputes.

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