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Richard - Bizlaw
Richard - Bizlaw, Attorney
Category: Business Law
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Experience:  30 years of corporate, litigation and international law
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Summary: Is agents commission payable in these specific circumstances. Please

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Summary: Is agent's commission payable in these specific circumstances.

Please assume the following facts: Joe used to work for our company, in various capacities. We had an oral agreement with him that we would pay him a 10% commission for any projects that he brought in. It was also agreed that if a project he had brought in, in turn brought us another project, that second project would earn him the commission. It was never expressly discussed, but had you asked me at that time, I would have said it only applies as long as Joe was associated with the company, or actively introduced a new client to us after he left the company.

One of the projects which Joe brought in, was a movie which we produced. The movie had worldwide distribution. An overseas viewer Jack, saw the movie. Thereafter he looked at our website, and researched us as a producing company, in comparison with every other producer in our area. We put in a bid for the work, but Jack was still hesitant. What clinched the deal was the fact that we would not produce this on our own, but as co-producers with a certain big-name movie director. I can safely say that without our co-producer as a partner in the bid, we would not have landed the job. His written proposal signed by both of us, and his reputation and persuasive technique, clinched the deal.

Now that Joe has heard of the new project, he is claiming commission. He no longer has any connection with our company, and did nothing actively in relation to Jack. His argument is that -- since Jack saw the first movie (the project which Joe had brought us), the new project also entitles him to commission. ASSUME for the purposes of this answer, that Jack had not heard of our company until he saw the first movie.

I contend that there are a number of intervening factors which negate Joe's claim.

Firstly, I say it was implied that the commission deal required Joe to still be involved with the company. It seems ludicrous that the mere sight of the movie by a remote party, who has no connection with Joe, can earn Joe commission ad infinatum.

Secondly, Jack did his own research about us.

Thirdly, our company as such did not land the job -- it is a co-production -- assume as fact, that for certain reasons, our company alone could not do this job.

Fourthly, assume as fact that if our co-producer's reputation were not as it is, and if he had not written a persuasive proposal, we would not have landed the job.

Question -- are we liable to pay Joe any commission.
Submitted: 5 years ago.
Category: Business Law
Expert:  Richard - Bizlaw replied 5 years ago.

bizlaw :

The commission agreement was made when he was employee. Unless there is some specific agreement that the arragment would continue in the future, the commission arrangement ended when he left your employ. Also, someone seeing your work does not make the person who brought the work initially become the procuring agent because a stranger decided to use you because of the work they say. You owe this person nothing. If the person wants to sue let him as I do not think his case would survive a motion to dismiss on the facts you laid out.

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