Arizona Laws 44-1798.02. Termination of sales representative contract; payment of earned commissions
A. If an agreement of services is terminated for any reason both of the following apply:
Terms Used In Arizona Laws 44-1798.02
- Action: includes any matter or proceeding in a court, civil or criminal. See Arizona Laws 1-215
- Commission: means :
(a) 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 orders or sales. See Arizona Laws 44-1798
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- including: means not limited to and is not a term of exclusion. See Arizona Laws 1-215
- Principal: means a person who does all of the following:
(a) Engages in the business of manufacturing, producing, importing, selling or distributing a product or service. See Arizona Laws 44-1798
- Registered mail: includes certified mail. See Arizona Laws 1-215
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
- Termination: means the end of the business relationship between the sales representative and the principal, whether by agreement, by expiration of time or by exercise of a right of termination by either party. See Arizona Laws 44-1798
1. All the commissions due through the time of termination shall be paid to the sales representative within a period of not to exceed thirty days after termination.
2. All the commissions that become due after the effective date of termination shall be paid to the sales representative within fourteen days after they become due.
B. The principal shall pay the sales representative all commissions due while the business relationship is in effect in accordance with the agreement between the parties.
C. A principal who fails to comply with subsections A and B of this section is liable to the sales representative for damages in the amount of three times the sum of the unpaid commissions owed to the sales representative.
D. The prevailing party in an action brought under this section is entitled to the cost of the suit, including reasonable attorney fees.
E. Commissions shall be paid at the usual place of payment unless the sales representative requests that the commissions be sent by registered mail. If, in accordance with a request by the sales representative, the sales representative’s commissions are sent by mail, the commissions are deemed to have been paid as of the date of the registered postmark on the envelope.
F. Unless payment is made pursuant to a binding and final written settlement agreement and release, the acceptance by a sales representative of a commission payment from the principal does not constitute a release as to the balance of any commissions claimed due. A full release of all commission claims that is required by a principal as a condition to a partial commission payment is null and void.