South Carolina 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 South Carolina’s laws protecting independent manufacturers’ sales representatives, as of January 1, 2023.
The South Carolina Payment of Post-Termination Claims to Sales Representatives Act
South Carolina Statutes, Code 1976 § 39-65-10
As used in this chapter:
(1) “Commissions” 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 of each order or sale.
(2) “Person” means an individual, corporation, partnership, association, estate, or trust.
(3) “Principal” means a person 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
(c) compensates the sales representative, in whole or in part, by commission.
(4) “Sales representative” means a person who:
(a) contracts with a principal to solicit wholesale orders;
(b) is compensated, in whole or in part, by commission;
(c) does not place orders or purchase for his own account or for resale; and
(d) does not sell or take orders for the sale of products to the ultimate consumer.
South Carolina Statutes, Code 1976 § 39-65-20
When a contract between a sales representative and a principal is terminated for any reason, the principal shall pay the sales representative all commissions that have or will accrue under the contract to the sales representative according to the terms of the contract.
South Carolina Statutes, Code 1976 § 39-65-30
A principal who fails to comply with the provisions of Section 39-65-20 is liable to the sales representative in a civil action for:
(1) all amounts due the sales representative plus punitive damages in an amount not to exceed three times the amount of commissions due the sales representative; and
(2) attorney’s fees actually and reasonably incurred by the sales representative in the action and court costs.
South Carolina Statutes, Code 1976 § 39-65-40
Where the court determines that an action brought by a sales representative against a principal under this chapter is frivolous, the sales representative is liable to the principal for attorney’s fees actually and reasonably incurred by the principal in defending the action and court costs.
South Carolina Statutes, Code 1976 § 39-65-50
A principal who is not a resident of this State who contracts with a sales representative to solicit orders in this State is deemed to be doing business in this State for purposes of the exercise of personal jurisdiction over nonresidents under Part 8, Chapter 2, Title 36.
South Carolina Statutes, Code 1976 § 39-65-60
Nothing in this chapter invalidates or restricts any other right or remedy available to a sales representative or precludes a sales representative from seeking to recover in one action on all claims against a principal.
South Carolina Statutes, Code 1976 § 39-65-70
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, is void.
South Carolina Statutes, Code 1976 § 39-65-80
Any person bringing an action under the provisions of this chapter may not bring an action under the provisions of Section 41-10-10.
South Carolina, 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 South Carolina sales rep attorney may be appropriate.
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 firstname.lastname@example.org 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.