New Hampshire 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 New Hampshire’s laws protecting independent manufacturers’ sales representatives, as of January 1, 2023.
The New Hampshire Sales Representatives and Post-Termination Commissions Act
New Hampshire Statutes, N.H. Rev. Stat. § 339-E:1
In this chapter:
I. “Commission” means compensation paid a sales representative by a principal, the rate of which is expressed as a percentage of the dollar amount of orders or sales of the principal’s product.
III. “Principal” means a person who manufactures, produces, imports or distributes a product for sale to customers who purchase the product for resale; uses a sales representative to solicit orders for such product; and compensates individuals who solicit orders, in whole or in part, by commission.
III. “Sales representative” means an individual other than an employee, who contracts with a principal to solicit orders and who is compensated, in whole or in part, by commission but shall not include one who places orders or purchases exclusively for his own account for resale.
IV. “Termination” means the end of services performed by the sales representative for the principal by discharge, resignation, or death.
New Hampshire Statutes, N.H. Rev. Stat. § 339-E:2
I. A sales representative and a principal shall enter into a written contract for services to be performed within this state by a sales representative. The written contract entered into pursuant to this section shall contain provisions which establish:
(a) The form of payment and the method by which such payment is to be computed and paid;
(b) Reasonable length of notice which either party must provide to the other for termination of the contract;
(c) The number of calendar days, up to a maximum of 45 days, after the date of termination or notification of death when all commissions due shall be paid; and
(d) Any other terms and conditions which the parties agree to include in such contract.
II. The principal shall provide the sales representative a signed copy of a written contract entered into pursuant to this section.
III. A provision in the contract establishing venue for an action arising under the contract in a state other than this state is void.
New Hampshire Statutes, N.H. Rev. Stat. § 339-E:3
The party who fails to comply with a provision of a contract entered into under RSA 339-E:2 relating to payment of a commission is liable in a civil action for damages, plus reasonable attorney’s fees and costs. The court may award exemplary damages of up to 3 times the commission owed in an action brought under this chapter.
New Hampshire Statutes, N.H. Rev. Stat. § 339-E:4
A principal who is not a resident of this state who enters into a contract with a sales representative subject to this chapter shall be considered to be doing business in this state for purposes of the exercise of personal jurisdiction over the principal.
New Hampshire Statutes, N.H. Rev. Stat. § 339-E:5
Nothing in this chapter shall invalidate or restrict any other or additional right or remedy available to a sales representative, or preclude a sales representative from seeking to recover in one action on all claims against a principal.
New Hampshire Statutes, N.H. Rev. Stat. § 339-E:6
A provision in any contract between a sales representative and a principal purporting to waive any provision of this chapter, whether by expressed waiver or by a contract subject to the laws of another state, shall be void.
Conclusion
New Hampshire, 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 New Hampshire 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.