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Damien Bosco
Damien Bosco, Attorney
Category: Business Law
Satisfied Customers: 2556
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HP is offering my employees a sales incentive if they sell

Customer Question

HP is offering my employees a sales incentive if they sell a certain product. It's small (0.50/unit) but the quantities can be larger (6000 per order). The question is that we are reselling to another company who is selling to US Govt. my understanding is this is a normal scenario and perfectly legal but I am looking for an objective party to confirm.
Submitted: 2 years ago.
Category: Business Law
Expert:  Damien Bosco replied 2 years ago.
Hello and Welcome! My name is***** am a licensed attorney. I have assisted hundreds of others with their legal questions. I am happy to help you!
What is your concern?
Customer: replied 2 years ago.
I want to know if allowing my employees to accept this sales incentive is legal. I don't believe this violates "Anti-kickback" or any other laws but want to confirm.
Expert:  Damien Bosco replied 2 years ago.
So are you saying your employees sell competing products with HP? And HP is giving better terms? Or are you saying that the ultimate buyer is the government and that could be a concern? The thing is I don't see a concern Siam trying to narrow down the issue.
Expert:  Damien Bosco replied 2 years ago.
So I am trying ..
Customer: replied 2 years ago.
No, we are buying from HP and reselling to the Government. HP is offering my employees a sales incentive payment per unit when we close the deal. I want to verify that there is no conflict in doing this since ultimately the customer is the Government. Are you familiar with Govt contracting law?
Expert:  Damien Bosco replied 2 years ago.
Hi Jeremy:
In government contracts there is a higher duty of good faith and good dealing. The duty of good faith and fair dealing is part of every contract unless it is expressly excluded. Notably, although the duty can be excluded from commercial contracts in some states, it is rarely if ever excluded from government contracts. Likewise, when a court applies the duty to either type of contract, the boundaries of a permissible application are defined by parties’ intent and their reasonable expectations in entering the contract.
What this all means is that if you believe that you are not acting in good faith and fair dealing, then possible a lawsuit could ensue. So, if the government believes that your company is searching for the best product and price, but your sales people are pushing a product only because of incentives and not because of the value of the product, this could rise to an uncomfortable situation. Otherwise, it should be okay as long as the product is good and still a good value to the government. Its very fact specific.