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!