Legal Question in Business Law in California

We are hiring a sales representative to sell our service. We want to include a clause in the contract covering a situation that may arise - namely the selling of our company to another owner, or having the company shut down. Because it is a service, customer subscriptions are usually a six month or year long, paid up front.

If our company should shut down (due to a sale or other circumstances), and we are no longer able to provide the service, who is responsible for the partial refund to the customer? Do we have any rights to have the sales rep give back his portion of the commission on the sale to cover part of this?


Asked on 6/17/14, 12:28 am

1 Answer from Attorneys
Jim Betinol Withrow and Betinol Law

California law has restrictions on how employers can force employees to return commissions and it is difficult for me to answer your question with just the information above. The complexity of your question requires that an attorney review your agreements and policies in place, including potentially your contract with your customers. For this reason, I would recommend that you consult with a business attorney in your area, if you can't find one, feel free to contact us.

Best,

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Answered on 6/18/14, 11:29 am


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