Utah Code § 34-44-102

Current through the 2024 Fourth Special Session

Section 34-44-102 - Definitions

As used in this chapter:

(1) "Business relationship" means an agreement that governs the relationship of principal and sales representative.

(2) "Commission" means:

(a) compensation:

(i) that accrues to a sales representative;

(ii) for payment by a principal; and

(iii) at a rate expressed as a percentage of the dollar amount of sales, orders, or profits; or

(b) any other method of compensation agreed to between a sales representative and a principal including:

(i) fees for services; and

(ii) a retainer.

(3)

(a) "Direct sales company" means a person that:

(i) sells, distributes, or supplies for consideration a good or service through participants:

(A) at different levels of distribution; or

(B) in accordance with a formula for compensating participants in whole or in part based on:

(I) the sale of a good or service; and

(II) the recruitment of or the performance or action of another participant; and

(ii)

(A) permits participants to recruit other participants to sell, distribute, or supply for consideration the person's good or service; or

(B) provides for commission, cross-commissions, override commissions, bonuses, refunds, dividends, or other consideration that is or may be paid as a result of:

(I) the sale of a good or service; or

(II) the recruitment of or the performance or action of another participant.

(b) As used in this Subsection (3), "participant" means an independent agent, contractor, or distributor.

(4) "Principal" means a person who:

(a) engages in any of the following activities with regard to a product or service:

(i) manufactures;

(ii) produces;

(iii) imports;

(iv) sells; or

(v) distributes;

(b) establishes a business relationship with a sales representative to solicit orders for a product or a service described in Subsection (4)(a); and

(c) agrees to compensate a sales representative, in whole or in part, by commission.

(5)

(a) Except as provided in Subsection (5)(b), "sales representative" means a person who enters into a business relationship with a principal:

(i) to solicit orders for a product or a service described in Subsection (4)(a); and

(ii) under which the person is compensated, in whole or in part, by commission.

(b) "Sales representative" does not include:

(i) an employee of a principal;

(ii) a person licensed under Title 31A, Insurance Code;

(iii) a person licensed under Title 41, Chapter 3, Part 2, Licensing;

(iv) a person licensed under Title 61, Chapter 2f, Real Estate Licensing and Practices Act;

(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;

(vi) a person who places an order or purchases a product or service for that person's own account for resale; or

(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:

(a) agreement;

(b) expiration of a time period; or

(c) exercise of a right of termination by either the principal or the sales representative.

Utah Code § 34-44-102

Amended by Chapter 438, 2019 General Session ,§ 1, eff. 5/14/2019.

Amended by Chapter 379, 2010 General Session.