Does the Act Limit When a Sales Rep Agreement Can Be Terminated?
Yes. The most significant provision of the Act generally prohibits the principal from terminating a sales representative agreement without “good cause”, and then only after providing a 90-day advance notice period and a 60-day cure period. The definition of “good cause” is discussed below. After receiving the notice, the sales representative has 60 days to cure the problems specified in the notice. If the problems are not fixed during this time, the principal can move forward with the termination on the 90th day. If the problems are fixed, then the sales rep cannot be terminated. In a few serious cases, the principal may terminate the sales representative agreement immediately without providing the 60-day cure period. This topic should be discussed with legal counsel.
