Michigan Court of Appeals rules that General Contractor is not liable under Michigan's Sales Representative Commissions Act.

April 3, 2003. In a case to be published, the Michigan Court of Appeals recently held in Mahnick v. Bell Company, that the Sales Representative Commissions Act (“SRCA”), MCL 600.2961 was not applicable to an employment relationship between plaintiff, a chief construction project estimator for defendant construction company, because the plaintiff was not a salesperson who sold “goods” and defendant did not produce, sell, or distribute a “product.”

The SCRA requires that a party asserting a claim under the Act must be “a person who contracts with or is employed by a principal for the solicitation of orders or sale of goods …” (emphasis added). The SCRA defines a “principal” as a person who “manufactures, produces, imports, sells, or distributes a product…” The terms “goods” and “product” as used in the act are not defined under the act. Accordingly, the Court of Appeals consulted dictionary definitions in order to aid in construing the undefined terms.

After consulting the dictionary definitions, the Court of Appeals determined that plaintiff, as a construction project estimator, was not engaged in soliciting for the order or sale of goods on behalf of the defendant, and that defendant, as a general contractor, was not engaged in the manufacture, production, importation, sale, or distribution of products. Rather, as a general contractor, defendant provides professional construction services to the project owner.

The Court of Appeals further observed that as a project estimator, plaintiff assisted defendant’s efforts to bid to provide services to the project owner by himself providing a professional service to defendant. The Court of Appeals held that services do not constitute goods or products within the meaning of the SRCA.