Mississippi 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 Mississippi’s laws protecting independent manufacturers’ sales representatives, as of January 1, 2023.
The Mississippi Actions for Unpaid Sales Commissions Act
Mississippi Statutes, Miss. Code Ann. § 75-87-1
As used in this chapter:
(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 dollar amount of certain orders or sales.
(b) “Principal” means any person who does not have a permanent or fixed place of business in this state and who:
(i) Engages in the business of manufacturing, producing, importing or distributing a product or products for sale to customers who purchase such product or products for resale;
(ii) Utilizes sales representatives to solicit orders for such product or products; and
(iii) Compensates the sales representatives, in whole or in part, by commission.
(c) “Sales representative” means any person who engages in the business of soliciting, on behalf of a principal, orders for the purchase at wholesale of the product or products of the principal. The term “sales representative” shall not include a person who places orders or purchases for such person’s own account for resale or is engaged in home solicitation sales regulated pursuant to Section 75-66-1 et seq., Mississippi Code of 1972.
Mississippi Statutes, Miss. Code Ann. § 75-87-3
Whenever any principal enters into an oral or written contract with a sales representative for services to be rendered within this state and the contemplated method of compensation of the sales representative involves a commission, the contract shall set forth the means by which the commission shall be computed and paid.
Mississippi Statutes, Miss. Code Ann. § 75-87-5
Whenever the contract between a sales representative and any principal is terminated, all commissions due the sales representative by the principal shall be due and payable within twenty-one (21) days of such termination.
Mississippi Statutes, Miss. Code Ann. § 75-87-7
Any principal who fails to timely pay the sales representative as provided in Section 75-87-5, shall be liable to the sales representative in a civil action for up to triple the commissions due to the sales representative, plus reasonable attorney’s fees and costs.
Conclusion
Mississippi, 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 a Mississippi 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.