Agent entitled to commission agency contract
Under Dutch agency law a commercial agent is entitled to commission on contracts concluded through his mediation between the principal and the third party.
Is a commercial agent also entitled to commission on deals concluded after the end of the agency contract?
Right to commission under Dutch agency law
Pursuant to Section 7:431(2) of Book 7 of the Dutch Civil Code, the commercial agent is entitled to commission for the preparation of agreements concluded after the end of the agency contract.
This only applies to:
(a) agreements that are mainly due to the work performed by the commercial agent during the agency contract and that have been concluded within a reasonable period of time after the end of the agency contract, or;
b) if the commercial agent or the principal, in accordance with the conditions set out in the first paragraph of Section 7:431 of the Netherlands Civil Code, has received the order from the third party before termination of the agency contract.
Which contracts give entitlement to commission after the end of the agency contract?
When the above requirements are met, the agent is entitled to the full agreed commission at the end of an agency contract. It was not clear exactly which contracts entitle the agent to commission. The Supreme Court broke that uncertainty in a judgment of 27 April 1956, NJ 1956/300. In this judgment the Supreme Court ruled that when contracts for renewal or renewal are concluded without the commercial agent’s intervention, the commercial agent is in principle not entitled to commission. Other agreements are in principle entitled to commission.
A ‘reasonable’ period under commercial agency law in the Netherlands
On 18 March 2014 (ECLI:NL:RBGEL:2015:2209), the District Court of Gelderland further explained the ‘reasonable period’ referred to in Section 7:431(2) of the Dutch Civil Code. That judgment concerned a commercial agent and principal who had agreed in the agency contract that the agent was entitled to commission if orders were placed within three months of the termination of the agency contract. Subsequently, the interpretation of this contractual term was called into question. The court ruled that what constitutes a reasonable period of time must be assessed in the light of all the circumstances of the case. According to the court, this could be influenced by the sales process and its complexity.
Evidence is crucial
The obligation to provide proof and – in the event of dispute – the burden of proof shall be borne by the commercial agent. The commercial agent must substantiate in concrete terms the work he has carried out in the specific case which has led to new contracts after the agency contract has ended. It is therefore essential that the agent justifies the work he has carried out and keeps a proper record of it. The agent may, for example, provide evidence in the form of agreements in principle, signed contracts, undertakings given and invitations to tender.
Contractual derogations are not possible under Dutch law!
It is important to know that Article 7:431 paragraph 2 of the Dutch Civil Code is a mandatory provision. This follows from Article 7:445 paragraph 1 of the Dutch Civil Code. Therefore, the parties cannot contractually exclude the right to commission for agreements/orders concluded after the end of the agency agreement. This also applies to contractual provisions that set conditions with regard to the period during which the agent is still entitled to commission after the termination of the agency contract. The contractual restrictions/divergences are null and void pursuant to Article 3:40(2) of the Dutch Civil Code.
Lawyer in Amsterdam for agency law
Should you have any questions and/or remarks as a result of this (agent entitled to commission at the end of an agency contract), please feel free to contact Lisa Jie Sam Foek, lawyer in Amsterdam specialized in agency law in the Netherlands.
