Legal Question in Business Law in Virginia

Re: Referral Fees

There is generally no reason why they cannot take

a referral fee. The only question is whether

(a) their contract with the dealership prohibits

it or (b) there is some regulation of car salesmen

I'm not aware of. I don't think there is.

The only possible argument against paying such

a commission is the idea that the car dealer

salesmen would have divided loyalties. That is,

if the car salesman is functioning as the buyer's

agent, he might have a conflict of interest in

steering buyers to one particular supplier of

add-ons.

However, the car dealer is NOT functioning as

the buyer's agent or on the buyer's behalf. In

fact, quite the contrary. The salesman is very

clearly on the opposite side of the table from

the buyer. So there is absolutely no conflict

of interest between the salesman and the buyer.

They inherently have opposite interests, and

everyone knows it, and that is normal.

The only other consideration would be that the

dealership is paying the salesmen and does not

want them to have side deals. So the dealership

could possibly dislike it if someone is working

a side business. But that would not be a legal

issue, just an office politics issue.

On both sides, it would surely help if there is

full disclosure of the commission. But I don't

even think that much is necessary.