In the event that a commercial agency agreement is terminated, the commercial agent often has a right to compensation. Frequent points of contention include the extent of any such entitlement and the classification of new clients.
A lot of businesses across all industries rely on the use of commercial agents. However, if the commercial agency agreement is terminated after years of successful collaboration, this often gives rise to disputes concerning the extent of the commercial agent’s entitlement to compensation. Our lawyers at the commercial law firm GRP Rainer with a great deal of experience in the field of commercial agency law note that, as a matter of principle, a commercial agent is entitled to be paid compensation if the company continues to profit from the business contacts which the commercial agent established while working for the company. On the other hand, this very subject is also a point of issue in many cases. The question is which contacts did the commercial agent actually establish and to what extent the company will profit from the commercial relationships with these clients going forward.
Another point of contention is whether an existing client can also be categorized as a new client if the commercial agent set up said client with a new product from the company which he represents. In this context, the Court of Justice of the European Union (CJEU) has expanded the definition of “new client”. In its ruling of April 7, 2016, the CJEU ruled that a new client can also be a client with whom commercial relations had already existed and were then expanded by the commercial agent to other products offered by the company.
According to the CJEU’s definition, the term “new client” should not be too restrictive. Even if commercial relations with a client had already existed, this does not preclude the existing client in question from also being a new client. It went on to say that this is certainly the case if the efforts of the commercial agent led to the expansion of commercial relations to additional products. The Court held that an assessment of whether a client is to be considered a new or existing client needs to be carried out based on the goods in relation to which the commercial agent was responsible for mediating. The CJEU ruled that the fact that contact had already been established with this business partner could be taken into account for the purposes of determining the extent of the payment for compensation.
Lawyers who are experienced in the field of commercial law can advise on drafting agreements as well as in relation to contentious issues in the field of commercial agency law.
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