What effect do contracts signed by salespeople have on our ability to collect
past due balances? One of our salespeople signed an agreement that said the
customer can, at their option return product they don't sell or, at our option,
hold it for an additional 90 days beyond the due date. In either case, the
customer is not responsible for payment for the unsold merchandise. Comments?
Answer: : My first comment
is a question: Was the salesperson fired for stupidity? In response to
your question, I am not a lawyer. My best guess is that your company
will have trouble overcoming the terms of the contract signed by your
salesperson. Essentially if the salesperson appeared to have authority
to sign the contract and the customer reasonably relied on the contract
as the basis for placing orders with your company it will be difficult
to convince a judge or jury that the contract should be ignored. You
may want to talk to your attorney about this issue. Good luck!