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Barrister
Barrister, Attorney
Category: Business Law
Satisfied Customers: 36546
Experience:  16 years practicing attorney, JD, BA, MBA
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I have an independent contractor agreement with a company with

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I have an independent contractor agreement with a company with whom I occasionally do business. In past I have done more business with this company, however this year I have sent only 1 client who continually renews services with this company. The company says they are not paying me commission for this client because I have not sent them any new business in the last year. is this legal?
Hello and thank you for using JA! My goal is to provide you with excellent service and help with your legal problem.
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What does your independent contractor agreement say regarding referral compensation?
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Do you only get paid for each new referral or do you get continuing commissions on repeat business?
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Thanks
Barrister
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Customer: replied 4 years ago.

Within this industry, which is independent business loans(not bank related), yes some companies ( and this is one of those smaller companies that does) do say in IC agreement that if you dont send them a new customer within 6 months they can not pay you on a previous customer who renews.


 


Only the smaller funding companies are still doing this because I get the impression that the larger funding companies have had legal problems with this practice.


 


This is my client and it cost me money to generate this lead. Now they are in essence trying to steal this client away from me. Is there anything I can do? There are thousands of us ICs who are having this problem. THX

To be perfectly honest with you, if your contract with the other party basically says that you have to continue to produce in order to get the "residuals" for repeat business, then this would be legal as it is just a matter of private contract. Unless the contract specifically says that you will get a commission on all business that the lead generates, they only have to pay you under the terms you agreed to when you entered the original IC contract.
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So essentially it all boils down to the written agreement you entered into as that is what would control both parties legal duties to each other.
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I am sorry to provide you with bad news, but please understand that I do have an ethical and professional obligation to provide customers with legally correct answers, even when an answer is not favorable to the customer.

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Thanks
Barrister
Barrister and 2 other Business Law Specialists are ready to help you
Customer: replied 4 years ago.

Thank you.

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