Oregon Sales Representative Statutes

Oregon Sales Representatives’ Commissions Statutes

Independent manufacturers’ sales representatives are typically hired by manufacturers, distributors, and importers to solicit orders for their products from potential customers in designated territories in exchange for a sales commission. Such sales representatives often spend many months or years building up a customer base in their assigned territory and incur substantial up-front sales and marketing expenses that can include travel, lodging, entertainment, and trade show expenses with the hope of generating a stream of future commission income. The sales representative is vulnerable if the principal suddenly terminates their relationship and/or fails to pay all commissions owed to the sales rep.

In response to these concerns, starting in the 1980s and 1990s, many states enacted statutes to protect the interests of these independent manufacturers’ sales representatives. These statutes often:

• Require the sales representative agreement to be in writing;

• Require the principal to provide a copy of the written contract to the sales rep;

• Require the principal to pay the sales rep for all commissions owed promptly following termination (or incur liability for statutory penalties, attorney’s fees, and court costs);

• Strictly limit the circumstances under which the principal can terminate, or fail to renew, a sales representative agreement (e.g., requiring the manufacturer to have “good cause” for termination); and/or

• Prohibit the principal from imposing terms (such as choice of law or exclusive venue provisions) in the sales rep agreement that would effectively require the sales rep to waive its statutory protections under the law.

Thirty-five of the fifty states have enacted some form of sales rep protection legislation.

This article sets forth the text of Oregon’s laws protecting independent manufacturers’ sales representatives, as of January 1, 2023.

The Oregon Payment of Sales Commissions and Sale Representatives Act

Oregon Statutes, O.R.S. § 646A.097

(1) As used in this section:

(a) “Commission” means compensation accruing to a sales representative for payment by a principal, the rate of which is expressed as a percentage of the amount of orders or sales or as a specified amount per order or per sale.

(b) “Principal” means a person who does not have a permanent or fixed place of business in this state and who:

(A) Manufactures, produces, imports or distributes a tangible product for wholesale;

(B) Contracts with a sales representative to solicit orders for the product; and

(A) Contracts with a principal to solicit wholesale orders;

(B) Is compensated, in whole or in part, by commission;

(D) Does not sell or take orders for the sale of products to the ultimate consumer.

(2) When a contract between a sales representative and a principal is terminated for any reason, the principal shall pay the sales representative all commissions accrued under the contract to the sales representative within 14 days after the effective date of the termination.

(3) A principal who fails to comply with the provisions of subsection (2) of this section is liable to the sales representative in a civil action for:

(a) All amounts due the sales representative plus interest on the amount due at the rate of nine percent per annum until paid; and

(b) Treble damages, if the failure to comply with the provisions of subsection (2) of this section is willful.

(4) The court shall award court costs and attorney fees actually and reasonably incurred by the prevailing party in an action to recover amounts, interest or damages due under subsection (3) of this section.

(5) A nonresident principal who contracts with a sales representative to solicit orders in this state is subject to the jurisdiction of the courts of this state to the extent specified in ORS 14.030.

(6) Any action commenced pursuant to this section must be commenced in the county in which the plaintiff resides at the time the action is commenced or in the county where the cause of action arose.

(7) Nothing in this section shall invalidate or restrict any other or any additional right or remedy available to a sales representative, or preclude a sales representative from seeking to recover in one action all claims against a principal.

(8) A provision in any contract between a sales representative and a principal purporting to waive any provision of this section, whether by expressed waiver or by a contract subject to the laws of another state, shall be void.

Conclusion

Oregon, like a majority of states, has enacted sales representative legislation. Manufacturers, distributors, and importers typically bear the burden of compliance with these statutes and should ensure that their contracts and activities are consistent with applicable law. Sales representatives may wish to review applicable laws to understand their rights. If the laws of multiple states are involved, compliance with the relevant law may become even more complicated, and legal advice from an Oregon sales rep attorney may be appropriate.

If you are interested in the sales representative statutes of other states, click here to view our sales representative statute survey page.

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About the Author

Craig W. Trepanier is a sales representative attorney who handles disputes under the Minnesota Termination of Sales Representatives Act and the laws of other jurisdictions. He can be reached at craig@trepanierlaw.com or at 612.455.0502. Trepanier MacGillis Battina P.A. is a Minnesota sales representative law firm located in Minneapolis. If you need advice regarding your sales representative agreement, or are having a dispute regarding the termination, non-renewal, or modification of a sales rep agreement or unpaid commissions, please contact us. Mr. Trepanier can represent you in the State of Minnesota. If appropriate, we can co-counsel with an attorney in your jurisdiction to leverage our specialized knowledge of sales rep law.