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rvlaw
rvlaw, Attorney
Category: Business Law
Satisfied Customers: 8386
Experience:  NYC Trial Attorney 30+ years; Law professor ; BUSINESS LAW; CONTRACTS; TORTS; Arbitrator
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I am working with a company that is in the promotion of discount

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I am working with a company that is in the promotion of discount services. We have executed an agreement however I am now moving forward with another product from another company is represented by this company my question has to do with reduced commissions when promoting services from another company. The other company agreement is being provided by this company however I have elected to terminate the agreement which I have done by fax and by e-mail.

Please read part one which represents the terms of payment and reduced payments for utilizing another company's card. The other company's card is being provided by the company that i have this agreement with which has been terminated.

See Below Please and then scroll down further to see the notice I had sent, should the paperwork be dated after the termination and should I also seek confirmation in writing from this company or is it satisfactory that the termination closes the current agreement and that the new agreement with outlined commissions will be paid in full?





Reduced Commissions. If Group Endorses a non-USPC discount prescription card, then USPC shall pay Group the “Reduced Commission Amount” as set forth on Schedule “A” for a period of only six months from date of such endorsement, and no commissions thereafter will be due or payable. Should Group terminate this Agreement, other than for endorsing a non-USPC discount prescription card, by providing notice pursuant to Section 7, then, during any period in which commissions are payable to Group, USPC shall pay to Group only the “Reduced Commission Amount” set forth on Schedule “A” for each Paid Claim resulting from a Prescription filled after the earlier of: (i) the date Group provides notice of termination; or (ii) the date Group first Endorsed a non-USPC discount prescription card (in each case, the “Reduction Date”). Should Group replace, or attempt to replace existing business with a non-USPC discount prescription card, then no further commissions will be due or

payable to Group by USPC. Notwithstanding any of the foregoing, if the number of Paid Claims in any calendar month ending after the Reduction Date is less than the Minimum Monthly Paid Claims, at the sole and absolute discretion of USPC, no further commissions shall be due or payable to Group.

c. Commission Upon Termination. Upon termination of this Agreement (the “Termination Date”), USPC will continue to pay commissions to Group as provided under subsection 5.a or 5.b, as applicable. Notwithstanding the foregoing, no commissions shall be due or payable to Group for Paid Claims resulting from Prescriptions filled on or after the Termination Date if: (i) Group has breached this Agreement; (ii) after the Termination Date, Group has engaged in any marketing or distribution practices prohibited under Section 3.a; (iii) the number of Paid Claims in any calendar month ending after the Termination Date is less than the Minimum Monthly Paid Claims, or (iv) if Group replaces or attempts to replace existing business with a non-USPC prescription discount card.

6. Independent Contractor. Group is an independent contractor, and USPC shall have no right to direct or control the day-to-day activities of Group in the performance of its obligations hereunder. Neither Group nor USPC shall incur debts, obligations or liabilities on behalf of the other, and nothing in this contract shall be deemed to create an agency, joint venture, partnership or employment relationship.

7. Termination. Either party may terminate this Agreement at any time by giving the other party at least thirty (30) days’ prior written notice thereof. USPC may terminate this Agreement immediately by notice to Group at any time upon USPC’s sole and absolute determination that Group has breached this Agreement. Upon USPC’s determination that Group has breached this Agreement, USPC may, in its sole and absolute discretion, allow Group up to fifteen (15) days within which to cure such breach. Any such cure period shall begin upon notice to Group of the nature of the breach and the applicable cure period. If any breach is not cured within its applicable cure period, if one is granted, USPC may terminate this Agreement immediately by giving notice to Group at any time. Upon termination, Group shall promptly return any and all materials (including any website) furnished by USPC.

Dear Mr.,

As a follow up with your assistant yesterday I am writing as the Chief Strategic Officer of XYZ company to communicate the termination of the agreement with USPC effective June 1 2012. This measure is to eliminate any miscommunications or understandings about moving forward with other programs marketed/offered/signed agreements through FMC. Inc. to xyz and as a result will not impact the commission structure or payments of other programs that are contracted for.

I signed the letter and dated it and then sent it by fax and by e-mail.
Submitted: 2 years ago.
Category: Business Law
Expert:  rvlaw replied 2 years ago.

Hi and welcome to JA,

I need clarification of the following, It's not quite clear

".....another product from another company is represented by this company my question has to do with reduced commissions when promoting services from another company. The other company agreement is being provided by this company however I have elected to terminate the agreement which I have done by fax and by e-mail"

What is the alleged "breach" here?

Is the breach a requirement to afford you the right to cancel or is the right to cancel absolute with or without a breach?

Are you saying you have deals on two products with the same company?

Please read part one which represents the terms of payment and reduced payments for utilizing another company's card. The other company's card is being provided by the company that i have this agreement with which has been terminated.

What is the "card" ?

My rhetorical question............who wrote this agreement????? :-(

rich

Customer: replied 2 years ago.
Hi Rich,

The company offers a program for a discount pescription card program under their company name of USPC. The agreement states that if I am to use/promote a card from another company that commissions paid would be reduced from 1.50 to .25 per transaction.

I did sign a distributor agreement intially for this program; however we never trasacted any business for a variety of reasons. Thereafter another program was introduced to me that is a better fit from this company. I sent the termination agreement so that there would not be the opportunity to interpert that there was a breach in the intial agreement because I was now promoting a different branded card even thought it is being offered with a new contract to me from the same company( distributor)

My concern is that I start writing business and they may turn around and say you did not give us notice therefore we will only pay you the smaller commission as per our agreement. As a result I terminated the original agreement so that I would not be encumbered downstream. Please let me know if I have made this clear or you need additional information. Thanks Andrew
Expert:  rvlaw replied 2 years ago.

Did you offer the program under the name of USPC or are you saying that USPC developed a line that competes with yours? If the latter, does the agreement address that action on the part of USPC?

Customer: replied 2 years ago.

FMC is the company that offers the discount pescription card program for USPC. I ahve not contracted any sales for these products for a variety of reasons, however FMC does also distribute another differemtly branded card which we plan to move forward with. As a result I am seekign to clarify that by terminating the agreement with FMC for the USPC card and then entering into a new agreement for the other branded card will not be cause for FMC the holding company to say we are paying a reduced comission as per the agreement with USPC when FMC has agreed to offer the other branded card and will now contract a new seperate agreement. I hope I have clarified my question /concern. To summarize I have terminated the USPC agreement and will date the new agreement as of June 1 or June 4 so that there is not any downstream exposeure for FMC to say you did not tell us you were using an alternate card when they are providing the program to me and cannot change the commission structure that is not being offered in the new agreement which by the way will be at higher levels. I do not want to start sellign and find out that teh comissions have been comprimised from a previous agreement. Everything has been discussed and the first agreement has been terminated already.

Expert:  rvlaw replied 2 years ago.

Andrew,

I'm looking at this from a legal and practical point point of view:

1. You did terminate the original contract per Paragraph 7 although I think that paragraph is poorly written since it seems to give either side the right to terminate only upon a breach. However, since no business was conducted, there could have been no breach by either side

2. It seems like you have no intention of dealing with USPC so why be concerned about reduced commissions in the future?

3. Your agreement with FHC is totally independent from the USPC contract.

If there are other questions or concerns or if I missed an issue you need resolved, please get back to me.

rich

Customer: replied 2 years ago.
Ok then-so in other words since I terminated the agreement for the program with USPC there should not be any issue with comissions agreed to with a different program and that is administered by FMC the distributor because I gave termination notice and the new agreement will be signed by me after the termination notice was provided? In addition to the fact that FMC has offered the program with higher comissions in a seperate agreement so then there is not an issue abouut utilizing a competeing product because FMC is the distributor of both even though they are seperate programs. Sorry for the addition details I am just seekign clarity in my own mind-Thanks!
Expert:  rvlaw replied 2 years ago.

Correct unless there is a clause somewhere in the original agreement preventing you from utilizing a competeing product because FMC is the distributor of both even though they are separate programs.

 

 

No need to apologize. The facts were a little complicated, but I hope I made you feel comfortable about your position now. Come back and ask for me if you need any further clarifications or have any more questions. Good luck with the new deal.

 

 

rich

rvlaw, Attorney
Category: Business Law
Satisfied Customers: 8386
Experience: NYC Trial Attorney 30+ years; Law professor ; BUSINESS LAW; CONTRACTS; TORTS; Arbitrator
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