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working with trade partners
 - Costa Rica

Working with Trade Partners

Working with Trade Partners

According to Costa Rican law, when a foreign or local company breaks a contract or terminates it without legal cause with a local or foreign representative, that company must compensate the local or foreign representative according to a formula based on the history of sales made or commissions earned by the local or foreign representative. This compensation formula is affected by the terms of any written agreement between the parties.

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It is recommended that the contract with the Costa Rican Trade Partner be notarized by a Costa Rican Notary Public - an attorney specialized in Notary and Registrations law - to ensure that your contract and its terms and conditions abide by all the Costa Rican Civil and Commerce laws. Thus, it is important to draft your contracts, to have them reviewed before signature by a competent, qualified attorney, familiar with Costa Rican law, who represents your company, and to have individuals with appropriate authority from both companies sign the contract.

Exclusivity With Costa Rican Trade Partners:

Costa Rican companies that want to represent foreign companies may request they be named the exclusive representative in the market. However, local attorneys familiar with the Costa Rican Commercial code recommend against exclusive representation contracts, retaining for the foreign companies the right to sell to other representatives in the market.

To gain a local representative's trust, you may want to work, and commit to exclusive representation, with that local representative for a finite specified time frame, such as one year. If your local representative does not perform to your expectations in that year, at its end you can either revise the contract and remove exclusivity; or you discontinue working with that company and choose another local representative.