Pennsylvania Act 1988-184 — SALES REPRESENTATIVES - CONTRACTS

Act text

SALES REPRESENTATIVES - CONTRACTS
                 Act of Dec. 21, 1988, P.L. 1881, No. 184             Cl. 12
                                  AN ACT

     Providing for agreements between sales representatives and their
        principals.

        The General Assembly of the Commonwealth of Pennsylvania
     hereby enacts as follows:

     Section 1.  Definitions.
        The following words and phrases when used in this act shall
     have the meanings given to them in this section unless the
     context clearly indicates otherwise:
        "Commission."  Compensation accruing to a sales
     representative for payment by a principal, the rate of which is
     expressed as a percentage of the dollar of orders or sales.
        "Principal."  Any person who does all of the following:
            (1)  Engages in the business of manufacturing, producing,
        importing or distributing a product for sale to customers who
        purchase such products for resale.
            (2)  Utilizes sales representatives to solicit orders for
        such product.
            (3)  Compensates sales representatives, in whole or in
        part, by commission.
        (Def. amended Dec. 21, 1998, P.L.1305, No.173)
        "Sales representative."  A person who contracts with a
     principal to solicit wholesale orders from retailers rather than
     consumers and who is compensated, in whole or in part, by
     commission. The term does not include one who places orders or
     purchases for his own account for resale or one who is an
     employee of a principal.
        "Termination."  The end of services performed by the sales
     representative for the principal. The term includes any action
     that concludes the relationship of the parties.
     Section 2.  Contracts.
        (a)  Contents.--When a sales representative enters into an
     agreement with the principal for the solicitation of wholesale
     orders, a written contract shall be entered into setting forth
     the following:
            (1)  The form of payment and the method by which it is to
        be computed and made.
            (2)  A specified period for the performance of services.
            (3)  The manner and extent to which job-incurred expenses
        are to be reimbursed.
            (4)  A specified geographical territory or specified
        accounts.
        (b)  Copy of contract.--The principal shall provide each
     sales representative with a signed copy of the contract.
     Section 3.  Termination.
        A principal shall pay a sales representative all commission
     due at the time of termination within 14 days after termination.
        (3 amended Dec. 21, 1998, P.L.1305, No.173)
     Section 4.  Commissions on goods delivered after the end of the
                    agreement.
        A principal shall pay a sales representative all commissions
     that become due after termination within 14 days of the date
     such commissions become due.
        (4 amended Dec. 21, 1998, P.L.1305, No.173)
     Section 5.  Noncompliance.
        (a)  General.--A principal who willfully fails to comply with
     the provisions of section 3 or 4 shall be liable to the sales
     representative in a civil action for:
            (1)  All commissions due the sales representative, plus
        exemplary damages in an amount not to exceed two times the
        commissions due the sales representative.
            (2)  The cost of the suit, including reasonable attorney
        fees.
        (b)  Frivolous actions.--If judgment is entered for the
     principal and the court determines that the action was brought
     on frivolous grounds, the court shall award reasonable attorney
     fees and court costs to the principal.
     Section 5.1.  When commissions become due.
        (a)  Contract.--The terms of the contract, whether or not in
     writing, between the principal and sales representative shall
     determine when commissions become due.
        (b)  Custom and usage.--If the time when commissions become
     due cannot be determined by a contract between the principal and
     sales representative, the past practices of the parties shall
     control, or, if there are no past practices, the custom and
     usage prevalent in this Commonwealth for the business that is
     the subject of the relationship between the parties shall
     control.
        (5.1 added Dec. 21, 1998, P.L.1305, No.173)
     Section 6.  Construction of act.
        Nothing in this act shall invalidate or restrict any other or
     additional right or remedy available to sales representatives or
     preclude sales representatives from seeking to recover in one
     action on all claims against a principal. The provisions of this
     act may not be waived. In applying the provisions of this act,
     the courts of this Commonwealth shall not recognize any
     purported waiver of the provisions of this act, whether by
     express waiver or by attempt to make a contract or agreement
     subject to the laws of another state.
     Section 7.  Applicability.
        The provisions of this act shall apply to existing contracts
     which can be terminated at will and to contracts entered into or
     renewed after the effective date of this act. Nothing contained
     in this section is intended to violate section 17 of Article I
     of the Constitution of Pennsylvania, relative to impairing the
     obligations of contracts.
     Section 8.  Compliance with requirements for contracts.
        Within 180 days after the effective date of this act, all
     contracts described in section 7 shall comply with the
     provisions of section 2.
     Section 9.  Effective date.
        This act shall take effect immediately.