Lawyers in the Netherlands for agency under Dutch law
Legal advice on agency in the Netherlands
Under an agency agreement, two parties, a seller of goods, the principal, and a commercial agent, agree that the commercial agent, for a certain remuneration, will mediate in the conclusion of (purchase and sale) contracts for certain goods of the principal. The commercial agent usually sells for the benefit of the principal, and for his own account and risk, against payment of part of the principal’s turnover. If you need advice on your rights and obligations when entering into an agency agreement, please do not hesitate to contact us. We, as lawyers in the Netherlands for agency under Dutch law, provide legal advice on Dutch agency law. We also wrote an article about agreements under Dutch law and corona.
Term of termination of agency agreement
An agency contract can be entered into for a fixed or indefinite period of time. Special statutory rules apply to agency contracts, which are included in Sections 7:428 to 7:445 of the Dutch Civil Code. For example, the law determines when the commercial agent is entitled to commission, under which circumstances the contract can be terminated, the notice period to be observed and what the rights and obligations are for both the commercial agent and the principal. Section 7:437 of the Dutch Civil Code lays down minimum notice periods to be observed when terminating an agency contract. The length of the notice period depends (among other things) on the duration of the agency contract. The longer the agency contract, the longer the notice period.
Compensation in the event of termination of an agency contract
Dutch agency law provides that if a party (the principal or the commercial agent) terminates the agency contract without observing the statutory or agreed period of notice, the terminating party is liable to pay damages to the other party. As a result, the other party shall be entitled to compensation if the terminating party terminates the agency contract. This shall not apply if the contract is terminated for an urgent reason notified to the other party without delay. The legal history gives as an example the situation where the principal appoints a second commercial agent contrary to the provisions of the agency contract.
Client compensation – goodwill on termination of agency contract under Dutch law
The agent is also entitled, in certain circumstances, to a customer indemnity of the benefit enjoyed by the principal after the end of the agency contract. This is not compensation for damages. In calculating the customer indemnity, account is taken of the commission earned in previous years.
According to case law, customer compensation/goodwill is in principle limited to a maximum of the annual remuneration received by the agent on average over the last five years. For the right to customer compensation/goodwill, however, it is important that the agent has actually introduced new customers or expanded the relationship with existing customers.
Lawyer in the Netherlands for agency under Dutch law
As agency lawyer in the Netherlands, Lisa Jie Sam Foek, has experience both in drawing up agency contracts and in litigating on (the termination of) agency contracts.
If you require legal advice from a lawyer specialised in agency, Lisa, lawyers in the Netherlands for agency under Dutch law, will be pleased to speak to you (lisa@fennekadvocaten.nl).
