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SALESMAN'S CONTRACT

Editor's Note: This contract, which dates back to the '60s or '70s, appears to have been written or heavily edited by a company owner. In particular, Section 4(d) is downright hilarious as an example of non-compete legalese. Please be sure to consult your lawyer before adapting any legal document for use in your business. That warning goes double for the example below.

  1. This contract and agreement made and entered into this the ______________ of ___________________, hereinafter known by and between ________________________ of ________________________; hereinafter known as party of the first part; and the COMPANY NAME, of CITY, STATE, hereinafter known as party of the second part.

  2. WITNESSETH: That for and in consideration of the sum of ___________ Dollars (S__________), to be advanced party of the first part by the party of the second part each week, said party of the first part does agree to enter into employment with party of the second part under the terms of Option ________________, and the other stipulations and terms, hereinafter set forth in this contract. All commissions (earnings) will be paid on actual shipments, or from invoices, rather than sales.

  3. Party of the first part agrees to act as the representative (representative used in the broadest sense: meaning salesman, credit man, ambassador of good will, trouble shooter, peace maker, etc.), of said second party in the counties of:

  4. (a) He, first party, shall be credited with a commission on all sales actually made by said first party if operating under Option One, and, if operating under Option Two, likewise on all mail orders, or other sales, from customers in said above designated territory, provided said party of the first part can clearly show, beyond any question of doubt, that said sale is made because of, or by reason of, the sales efforts of said first party. This can be clearly shown on first party's daily reports evidencing the fact that said buyer is being regularly called on and any buyer who has been contacted by said first party on three consecutive occasions shall be classified as a customer of said first party and any sales made to such customer shall be credited to said first party just as though he had actually made the sale in person.

    (b) In other words, it is the purpose of said second party to give all credit that is legitimately due to first party but will not give credit on any sales unless it is determined beyond any question of a doubt that first party has made the proper sales efforts. In other words just because John Jones lives in Podunk and happens to order or buy something from said second party, and first party perhaps has never even heard of him much less devoted any sales efforts toward making of him a customer, therefore first party could not expect to be credited with such a sale.

    (c) It is the idea of second party to let first party determine his compensation by his sales efforts. First party will provide second party with route lists for advance notices, and if he will actually call on those names, there will be no question whatsoever as to sales credits. Contrariwise second party feels that where no service is rendered naturally first party should not expect compensation. Naturally both demand and expect at all times to give and receive full and complete cooperation and when one party does the right thing naturally the other party is expected to do likewise.

    (d) And still on this subject it might be well for second party to mention that it is its belief that we all sink or swim, survive or perish, prosper or fall, by our own efforts and that there is no substitute for just plain WORK. Therefore, it seeks to do its part towards first party and believes that a salesman is no different from any other individual as to his personal success and that the salesman who is "up and at 'em" from early morn 'til dewey 'eve, in season and out of season, will in the long run, beat the "supersalesman" to the post and bring home a lot more bacon.

  5. (a) On or before the tenth of each month a statement shall be rendered showing all charges and all credits to the account of said first party and any excess of credits over charges shall be credited to said first party and one-half of said credits over charges, or debits, shall be paid on July 10 of each year. The balance of excess credits over debits shall be paid on December 31 of each year. For want of a better term second party calls these payments a bonus.

  6. Party of the first part agrees as follows:

    (a) He shall not be connected with any other firm, corporation, or individual directly or indirectly, in any capacity whatsoever. Will devote five and one-half days of each week solely to the business of said second party.

    (b) DAILY REPORTS SHALL BE MAILED, SAID REPORTS TO INDICATE EVERY CALL MADE, WHETHER ANY SALES RESULT OR NOT, together with any special remarks or notations, indicating where second party can be of assistance or calling attention to any Item of Interest.

    (c) LIKEWISE AGREES TO KEEP AND MAINTAIN ANY AND ALL RECORDS THAT SECOND PARTY MAY DEEM TO THE BEST INTEREST OF BOTH PARTIES.

    (d) Agrees to use HIS BEST EFFORTS IN THE COLLECTION OF ACCOUNTS in his territory, it being understood that the collection of accounts is an essential part of the terms of this contract.

    (e) AGREES THAT HE WILL AT ALL TIMES BE STRICTLY SOBER, A GENTLEMEN IN EVERY SENSE OF THE WORD.

    (f) Agrees to furnish own automobile and pay all expenses connected with the position. No advances will be accepted when not actually engaged In the selling and travelling of designated territory.

    (g) Agrees to the very best of his ability to maintain suggested selling prices of second party. In other words will not "cut" or discount prices unless, in his judgment, it is best for both parties that same be done. Will not give "presents" except in very rare cases where it is deemed absolutely essential and in such cases does agree that one-half of the actual cost of each gift shall be paid by him. In other words party of the second part frowns on this practice and believes if it is a necessity, it benefits both parties, and therefore both parties should share in the expense.

    (h) Party of the first part agrees to sell only those whom he believes to be "good" — that is the SENDING IN OF AN ORDER IS PRIMA FACIE EVIDENCE THAT HE BELIEVES THE CREDIT STANDING OF THE CUSTOMER IS SUCH AS TO JUSTIFY PARTY OF THE SECOND PART IN FILLING THE ORDER AND IN THE BELIEF THAT CUSTOMER WILL PAY FOR SAME IN LINE WITH TERMS OF SALE.

    (i) Party of second part has no means of ascertaining credit records save from credit reference book of Dunn & Bradstreet. Therefore second party cannot O.K. orders unless they are rated G3 ($5,000 to $10,000, credit good) or better. Therefore, any commercial account passed for credit by second party on the recommendation of first party means second party naturally assumes first party has made all necessary credit inquiries and believes the account "good". All such accounts passed by second party on first party's recommendation unpaid after ninety days (counties, municipalities, state institutions excepted) commissions earned on such sales will be charged back to first party.

    A ten dollar loss in an account means to party of the second part that an additional Two Hundred Dollars in sales must be made and paid for.

    (J) It being mutually understood that all orders must be acceptable to party of second party in all respects, such as credit standing of customer, terms of sale and payment, deliveries, etc. In other words, party of the second part reserves the right to accept, or reject, any order, for any reason it may elect.

  7. There is a constant loss to both parties by having orders delayed, made wrong, or cancelled, because "the copy is not correct". Naturally delays and errors make a dissatisfied customer and a "lost" customer usually means "gone forever" besides such A DISSATISFIED CUSTOMER IS MUCH MORE LIKE TO SPREAD "BAD NEWS" THAN GOOD. Party of the second part furnishes order blanks that are complete and provide for almost all details. First party realizes that HE IS PERSONALLY RESPONSIBLE FOR CORRECT COPY. He (first party) further agrees that when any order is filled in all respects as per instructions, ON HIS ORDERS, and there is an error or claim made by customer, due solely to the negligence of first party, that one-half of the net loss sustained by reason of any such error, shall be charged to him. His responsibility for errors ceases however when he has furnished ON HIS ORDERS clear instructions, accompanied by CORRECT and CLEAR copy.

  8. He agrees to send in, where possible, orders that are ACTUALLY SIGNED BY THE PURCHASER, NOT SIGNED FOR HIM, and assumes full responsibility for all printing orders, orders for special binders, or any Items made to order, not so signed by buyer. Party of the second part will accept, or confirm all such orders only with this understanding. FURTHER, PARTY OF THE FIRST PART ASSUMES FULL RESPONSIBILITY FOR ANY VERBAL AGREEMENT BETWEEN HE AND BUYER, it being understood and agreed that in accepting or acknowledging any order that party of the second part Is agreeing only to that part of the buyer's order that is actually written into the order by party of the first part and any verbal agreements, not noted thereon, are not binding on party of the second part. For his own protection party of the first part should not enter into any verbal agreements with the buyer.

  9. It is a well understood fact that no one concern can have in stock every item that every call is made for, but does try to carry and will carry in stock a representative line of office supplies and stationery items. Therefore, party of the first part agrees to do HIS DEAD LEVEL BEST TO SELL ITEMS THAT ARE STOCKED and will further agree to inform himself as to just what these items are. He further agrees, except in unusual circumstances, to discourage the purchase of those small and unusual items that cost party of the second part more in handling than the sale is worth. In other words, it is party of the second part's belief that 98% of "special items" can be switched in stock items. Illustration, perhaps a bit far-fetched but nevertheless giving the idea in mind: Customer wants a special kind of eraser because it has a purple tip, and is "so cute".

  10. Agrees to outline his territory into routes of one week each. To furnish said second party copy of said route list, together with name of every prospect on whom he expects to call. Second party agrees to make a mailing list of these prospects and include them in every mailing of a general nature. Further, should first party feel that a mailing to his list on any particular subject be worth while, said second party shall make such mailing.

  11. Second party likewise agrees to mail on or about each Wednesday, a card, or notice of some kind, to all prospects in the route for the week following. This, so long as both parties feel it necessary and worth while.

  12. It is mutually understood and agreed that the interest of one party is the interest of the other and it is essential for each to co-operate in every way possible. Both parties therefore pledge themselves to the very best of their ability, to assist and aid in every way one another.

  13. (a) Party of the first part acknowledges receipt of the following catalogues, price lists, advertising matter, etc., and agrees to keep such material, price lists, etc., in good condition, and to return them in good condition.

    (b) Part of this agreement is that files, price lists, etc., shall be kept in good condition in their proper places at all times. This is made necessary because as stated above, party of the second part goes to considerable expense, time and effort to get up the necessary selling helps, price changes, catalogues, etc., and if the salesman will not insert his price sheets and will not keep his catalogues up he should certainly be penalized for his failure to do so. in other words, party of the second part deems it an act of ingratitude, to say the least, when party of the first part does not appreciate the cooperation and help that party of the second part is so anxious to give.

  14. This contract may be terminated by either party at any time after first giving written notice two weeks in advance of such intention.

  15. This contract shall be in full force and effect beginning _______________ and continue in effect until terminated as above mention.

  16. Party of the first part agrees to the terms and stipulations herein contained in every particular and elects to operate under the terms of Option.

  17. Signed by both parties in duplicate, this ____________ day of _________________ 19__________.



WITNESSES:

________________________________
Party of the First Part

________________________________
COMPANY NAME

By _____________________________
Secretary-Treasurer
Party of the Second Part

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