Puerto Rico Independent Sales Representative Agreement
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FAQ
Act 75 significantly constrains the relationship between a principal and its dealer by turning into a tort the unjustified termination, non-renewal, or impairment of a dealership contract.
Distribution Law 75 is unique to Puerto Rico; few jurisdictions have enacted similar laws. Law 75 is a patriarchal law that regulates the relationship between principals and on-Island distributors. It creates a complex framework for business and commercial relationships that is unique to Puerto Rico.
An independent sales representative is a professional who works as a contractor for a company, selling a service or product on their behalf. They may work contractually, only earning income when they make a sale.
A sales representative contract is a legal agreement between a particular company and the sales executive/representative who acts on the company's behalf to execute sales services. It provides clear guidelines for the terms of employment, compensation, and termination.
Act 75 prohibits termination or non-renewal of a dealer's contract without ?just cause,? regardless of any contract provision permitting termination.
A principal may be surprised to learn that, under Art. 2 of Act 75, it may neither terminate nor refuse to renew a dealership upon its expiration, except for ?just cause?. Failure to have just cause entitles the dealer to recover significant damages and penalties from the principal.
