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VAR contract dispute
Posted by: Susan (Host IP Logged)
Date: June 27, 2009 10:44AM

I am interested in working with a medical company as a VAR and received their contract for review. This product has residual income possibilities by way of monthly fees clients pay for support. This is one of the most important features of the product and why I am considering this product.
The contract states that they can cancel our agreement at any time with or without cause and take over our client base and the monthly residuals. They reason that they may want to sell the company later and the new owner may want a direct sales force.
How can this clause be changed to protect me from building a client base and then losing it suddenly if their scenario should take place?

Re: VAR contract dispute
Posted by: Kuldeep Singh (Host IP Logged)
Date: July 01, 2009 05:51AM

Dear Susan, You have below mentioned two options

1)Negotiate with company officials for put some reasons for cancelation of contract, so you will take care for those resaons OR set some time frame , so that you can arrange some another principle company to cater the same clients, or if the buyer base created by yourself by investing your time & money then u will be entitled for compensation or royality.

2) You can do one thing more "Just go and ask contracting agency to put off this clause from contract........hehehehhe

best regards

Kuldeep Singh

Re: VAR contract dispute
Posted by: Bill (Host IP Logged)
Date: July 01, 2009 08:30PM

1.) Try for a contact with a specific time frame, i.e. a year, two years, with
an option to renew.

2.) Try to change the agreement to "for cause" not just at will for
termination of contract.

3.) Try to get a clause that says you get 120 days notice, or 90 days even,
to lessen the impact, should that occur.

4.) Agree to a specific performance to keep agreement in effect.

5.) Keep records of sales activities to prove "bad faith" if you build the
business and they pull the contract.

6.) If it looks too risky, walk away. You gain nothing by entering a one-
sided agreement where you have no protection for your work.

Is there existing business or is it all pioneer work? Building something from scratch is much more difficult/expensive than if there is existing business. Do they currently have direct reps in other area's? That would be a big red flag for me. How long have the other reps been on board, can you talk to them and get their impression of the company, and their loyalty to Independents?