Protecting Your Residuals: A Contract Checklist

By Neil Ende

Despite the perception that contracts are fixed, static documents, in reality, contract terms between a carrier and agent are the unique, case-by-case product of the negotiation between the parties. Put another way, contracts are similar to snowflakes in that no two are alike. In most cases, when addressing the issue of residual commissions, the best approach for the agent is to include provisional language that almost certainly isn’t there at the beginning of the negotiation phase.

When addressing the question of residual commissions, as a general matter, your agreement should include:

Because the agreement you execute with your service provider is central to determining whether you will survive in the market, it is impossible to overstate the importance of seeking expert legal advice from experienced telecom counsel when negotiating these agreements and to stand your ground on critical terms. The upfront investment necessary to obtain assistance with these matters will — in nearly all cases — pay dividends down the road that are well beyond your investment.

Neil S. Ende is founder and partner, and Greg Taylor is partner, with Technology Law Group LLC, a Washington, D.C.-based telecommunications law firm. Further information on this issue can be found at TLG’s blogsite.