(a) The terms of the contract between the principal and sales representative shall determine when a commission is due.

Terms Used In Alabama Code 8-24-2

  • commission: 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. See Alabama Code 40-23-10
  • Contract: A legal written agreement that becomes binding when signed.
  • principal: Any person who does all of the following:

    a. See Alabama Code 40-23-10

  • SALES REPRESENTATIVE: 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, but does not include a person who places orders or purchases for his or her own account for resale, or a person engaged in home solicitation sales. See Alabama Code 40-23-10
  • state: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Alabama Code 30-3D-608
  • termination: The end of services performed by the sales representative for the principal, whether by discharge, resignation, or expiration of a contract. See Alabama Code 40-23-10

(b) If the time when the commission is due cannot be determined by a contract between the principal and sales representative, the past practices between the parties shall control, or if there are no past practices, the custom and usage prevalent in this state for the business that is the subject of the relationship between the parties shall control.

(c) All commissions that are due at the time of termination of a contract between a sales representative and principal shall be paid within thirty days after the date of termination. Commissions that become due after the termination date shall be paid within thirty days after the date on which the commissions become due.

(Acts 1985, No. 85-543, p. 782, §2; Acts 1994, No. 94-686, p. 1319, §1.)