As used in this chapter:
(1)"Business relationship" means an agreement that governs the relationship of principal and sales representative.
(2)"Commission" means:
(2)(a) compensation:
(2)(a)(i) that accrues to a sales representative;
(2)(a)(ii) for payment by a principal; and
(2)(a)(iii) at a rate expressed as a percentage of the dollar amount of sales, orders, or profits; or
(2)(b) any other method of compensation agreed to between a sales representative and a principal including:
(2)(b)(i) fees for services; and
(3)(3)(a) "Direct sales company" means a person that:
(3)(a)(i) sells, distributes, or supplies for consideration a good or service through participants:
(3)(a)(i)(A) at different levels of distribution; or
(3)(a)(i)(B) in accordance with a formula for
Free access — add to your briefcase to read the full text and ask questions with AI
As used in this chapter:
(1) "Business relationship" means an agreement that governs the relationship of principal and sales representative.
(2) "Commission" means:
(2)(a) compensation:
(2)(a)(i) that accrues to a sales representative;
(2)(a)(ii) for payment by a principal; and
(2)(a)(iii) at a rate expressed as a percentage of the dollar amount of sales, orders, or profits; or
(2)(b) any other method of compensation agreed to between a sales representative and a principal including:
(2)(b)(i) fees for services; and
(2)(b)(ii) a retainer.
(3) (3)(a) "Direct sales company" means a person that:
(3)(a)(i) sells, distributes, or supplies for consideration a good or service through participants:
(3)(a)(i)(A) at different levels of distribution; or
(3)(a)(i)(B) in accordance with a formula for compensating participants in whole or in part based on:
(3)(a)(i)(B)(I) the sale of a good or service; and
(3)(a)(i)(B)(II) the recruitment of or the performance or action of another participant; and
(3)(a)(ii) (3)(a)(ii)(A) permits participants to recruit other participants to sell, distribute, or supply for consideration the person's good or service; or
(3)(a)(ii)(B) provides for commission, cross-commissions, override commissions, bonuses, refunds, dividends, or other consideration that is or may be paid as a result of:
(3)(a)(ii)(B)(I) the sale of a good or service; or
(3)(a)(ii)(B)(II) the recruitment of or the performance or action of another participant.
(3)(b) As used in this Subsection (3), "participant" means an independent agent, contractor, or distributor.
(4) "Principal" means a person who:
(4)(a) engages in any of the following activities with regard to a product or service:
(4)(a)(i) manufactures;
(4)(a)(ii) produces;
(4)(a)(iii) imports;
(4)(a)(iv) sells; or
(4)(a)(v) distributes;
(4)(b) establishes a business relationship with a sales representative to solicit orders for a product or a service described in Subsection (4)(a); and
(4)(c) agrees to compensate a sales representative, in whole or in part, by commission.
(5) (5)(a) Except as provided in Subsection (5)(b), "sales representative" means a person who enters into a business relationship with a principal:
(5)(a)(i) to solicit orders for a product or a service described in Subsection (4)(a); and
(5)(a)(ii) under which the person is compensated, in whole or in part, by commission.
(5)(b) "Sales representative" does not include:
(5)(b)(i) an employee of a principal;
(5)(b)(ii) a person licensed under Title 31A, Insurance Code;
(5)(b)(iii) a person licensed under Title 41, Chapter 3, Part 2, Licensing;
(5)(b)(iv) a person licensed under Title 61, Chapter 2f, Real Estate Licensing and Practices Act;
(5)(b)(v) a person who provides a product or service under a business relationship with a principal that is incident to the purchase or sale of real property;
(5)(b)(vi) a person who places an order or purchases a product or service for that person's own account for resale; or
(5)(b)(vii) an independent agent, contractor, or distributor through whom a direct sales company supplies for consideration a good or service.
(6) "Terminates" or "termination" means the end of a business relationship between a sales representative and a principal, whether by:
(6)(a) agreement;
(6)(b) expiration of a time period; or
(6)(c) exercise of a right of termination by either the principal or the sales representative.