Indiana Code

Ind. Code § 24-4-7-5 (2026)

Termination of contract; payment of commissions accrued; failure to comply; attorney's fees and costs

✓ current as of May 2026
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     Sec. 5. (a) If a contract between a sales representative and a principal is terminated, the principal shall, within fourteen (14) days after payment would have been due under the contract if the contract had not been terminated, pay to the sales representative all commissions accrued under the contract.

     (b) A principal who in bad faith fails to comply with subsection (a) shall be liable, in a civil action brought by the sales representative, for exemplary damages in an amount no more than three (3) times the sum of the commissions owed to the sales representative.

     (c) In a civil action under subsection (b), a principal against whom exemplary damages are awarded shall pay the sales representative's reasonable attorney's fees and court costs. However, if judgment is entered for the principal and the court determines that the action was brought on frivolous grounds, the court shall award reasonable attorney's fees and court costs to the principal.

As added by P.L.238-1985, SEC.1.

 

Notes of Decisions
Cited in 4 cases, 2002–2014 · leading case: Ralph Andrews v. Mor/Ryde Int'l, Inc., 10 N.E.3d 502 (Ind. 2014).
Ralph Andrews v. Mor/Ryde Int'l, Inc., 10 N.E.3d 502 (Ind. 2014). · cites it 4× “I.C. § 24-4-7-5(a). “A principal who in bad faith fails to comply” with that requirement “shall be liable, in a civil action brought by the sales representative, for exemplary damages in an amount no more than three (3) times the sum of the commissions owed to the sales…”
In Re Certified Question From US Ct. of App., 659 N.W.2d 597 (Mich. 2003). “15 ("willfully fails to pay commissions"); Ind. Code 24-4-7-5(b) ("in bad faith fails to comply"); Mass.”
Harris Corp. v. Giesting & Assocs., 297 F.3d 1270 (11th Cir. 2002). “fraud, gross negligence, or oppressiveness, here the statutes specifically deal with contracts and commissions, and clearly delineate the type of damages and attorney’s fees allowed, and under what circumstances they may be awarded.”
Ralph Andrews v. MOR/Ryde Int'l, Inc., 2 N.E.3d 794 (Ind. Ct. App. 2014). · cites it 20× “After conducting a hearing, the trial court issued the following order: IT IS THEREFORE, ORDERED, ADJUDGED, AND DECREED that the damages available under Ind. Code § 24-4-7-5 [(b)] are punitive in nature and are, therefore, subject to the provisions of Ind.”
— Ind. Code § 24-4-7-5(a) — 1 case
Ralph Andrews v. Mor/Ryde Int'l, Inc., 10 N.E.3d 502 (Ind. 2014). “I.C. § 24-4-7-5(a). “A principal who in bad faith fails to comply” with that requirement “shall be liable, in a civil action brought by the sales representative, for exemplary damages in an amount no more than three (3) times the sum of the commissions owed to the sales…”
— Ind. Code § 24-4-7-5(b) — 3 cases
In Re Certified Question From US Ct. of App., 659 N.W.2d 597 (Mich. 2003). “15 ("willfully fails to pay commissions"); Ind. Code 24-4-7-5(b) ("in bad faith fails to comply"); Mass.”
Ralph Andrews v. Mor/Ryde Int'l, Inc., 10 N.E.3d 502 (Ind. 2014). “I.C. § 24-4-7-5(a). “A principal who in bad faith fails to comply” with that requirement “shall be liable, in a civil action brought by the sales representative, for exemplary damages in an amount no more than three (3) times the sum of the commissions owed to the sales…”
Ralph Andrews v. MOR/Ryde Int'l, Inc., 2 N.E.3d 794 (Ind. Ct. App. 2014). “After conducting a hearing, the trial court issued the following order: IT IS THEREFORE, ORDERED, ADJUDGED, AND DECREED that the damages available under Ind. Code § 24-4-7-5 [(b)] are punitive in nature and are, therefore, subject to the provisions of Ind.”
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