Bill Text: IN SB0137 | 2013 | Regular Session | Introduced
Bill Title: Independent sales representative commissions.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2013-01-07 - First reading: referred to Committee on Civil Law [SB0137 Detail]
Download: Indiana-2013-SB0137-Introduced.html
Citations Affected: IC 22-2-16.
Synopsis: Independent sales representative commissions. Establishes
the time at which a commission is due an independent sales
representative who contracts with a principal to solicit orders for a
product manufactured, produced, imported, or distributed by the
principal. Provides that, when a contract between an independent sales
representative and a principal is terminated, the principal shall pay a
commission not later than 13 days after the commission is due, for
commissions due after termination, or 13 days after the date of
termination, for commissions due at termination. Provides that a
principal who fails to pay a commission when it is due is liable in a
civil action for exemplary damages of not more than three times the
sum of the commission owed, plus reasonable attorney's fees and court
costs. Provides that a provision in a contract to waive the required
payment times is void.
Effective: July 1, 2013.
January 7, 2013, read first time and referred to Committee on Civil Law.
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A BILL FOR AN ACT to amend the Indiana Code concerning labor
and safety.
Chapter 16. Payment of Commissions to Independent Sales Representatives
Sec. 1. (a) This chapter applies to a written or oral contract entered into, modified, renewed, or extended after July 1, 2013.
(b) This chapter does not apply to or abrogate a written or oral contract in effect on July 1, 2013.
Sec. 2. As used in this chapter, "commission" means compensation that accrues to a sales representative, for payment by a principal, at a rate expressed as a percentage of the dollar amount of:
(1) orders taken or sales made by the sales representative; or
(2) profits attributable to orders or sales described in subdivision (1).
Sec. 3. As used in this chapter, "person" means an individual, a
sole proprietorship, a partnership, a firm, an association, a limited
liability company, a corporation, or any other business entity.
Sec. 4. As used in this chapter, "principal" means a person,
whether or not the person has a fixed place of business within
Indiana, who:
(1) manufactures, produces, imports, or distributes a product
for sale;
(2) contracts with a sales representative to solicit orders for
the product; and
(3) compensates the sales representative, in whole or in part,
by commission.
Sec. 5. (a) As used in this chapter, "sales representative" means
a person who:
(1) contracts with a principal to solicit orders for a product
manufactured, produced, imported, or distributed by the
principal; and
(2) is compensated, in whole or in part, by commission.
(b) The term does not include a person who:
(1) places orders or makes purchases for the person's own
account for resale; or
(2) qualifies as an employee for purposes of IC 22-2-5 or
IC 22-2-9.
Sec. 6. Except as provided in section 7 of this chapter, a
commission becomes due at a time determined as follows:
(1) By the terms of the contract between the sales
representative and the principal.
(2) If:
(A) there is no contract; or
(B) the terms of the contract:
(i) do not specify when a commission becomes due; or
(ii) are unclear or ambiguous as to when a commission
becomes due;
by the past practice of the parties.
(3) If the time when a commission becomes due cannot be
established under subdivision (1) or (2), by the custom and
usage prevalent in the state for the particular industry in
which the parties are involved.
Sec. 7. (a) When a contract between a sales representative and
a principal is terminated, the principal shall pay a commission:
(1) not later than thirteen (13) days after the date of
termination, for a commission that is due at the time of
termination; and
(2) not later than thirteen (13) after the date the commission becomes due, for a commission that becomes due after the date of the termination.
(b) A principal who fails to comply with subsection (a) is liable in a civil action for exemplary damages in an amount not more than three (3) times the sum of the commission owed to the sales representative.
(c) In an action under subsection (b), a principal against whom exemplary damages are awarded shall also pay the sales representative's reasonable attorney's fees and court costs.
Sec. 8. A provision in a contract between a sales representative and a principal that waives a provision of this chapter is void.
