Indemnities for ending the agency contract
When the agency contract comes to an end, by any of the possible forms of termination of the contractual relationship, the agent needs information from the < strong>compensation that can be claimed from the employer.
The interests of the agent are opposed to those of the employer, it is natural that the former wants to collect the highest compensation possible, and that the latter wants the termination of the agency contract to mean the lowest cost.
When we consider the quantification of this type of compensation it is because the relationship between employer and agent has previously been extinguished. We have already analyzed the causes that give rise to the termination of the agency contract in our article 10 Fundamental aspects of the agency contract.
However, we start with the different types of compensation and the possible ways to quantify it, as this is the most common concern of interested parties and the first thing clients usually ask in < strong>our legal consultations. Specifically, there are two types of compensation that the client can collect: compensation for clientele and compensation for damages .
Compensation for clientele
The agent’s mission is to get clients for the company with whom he contracts his commercial services in exchange for a commission. When the agency relationship ends, the businessman may have increased his client portfolio due to the agent’s actions, so that he will continue to benefit from his work despite the agency relationship having ended . < /p>
Commissions will no longer be received, and therefore the Agency Contract Law establishes in its article 28 that the agent receives compensation if his previous activity can continue to produce substantial benefits for the employer .
The requirements for the agent to claim compensation for clientele are the following:
- That new clients have been obtained for the entrepreneur.
- That the contribution of these customers has produced an increase in sales.
- That this activity of the agent can continue generating benefits for the employer after the end of the agency contract.
In this sense, the Supreme Court Judgment of October 29, 2013 understood that compensation for clientele had to be agreed since new clients had been brought in with increased sales, and it was also reasonable to think, in that case, that the activity of the agent could continue producing substantial benefits.
On the other hand, the courts have established that when the employer unilaterally decides to terminate the contract he will not have to pay compensation for clientele if it is not proven that the termination of the business relationship agency passes on a benefit.
There is no single criterion to quantify the amount of clientele compensation. The agency contract law does not establish this, but points out some of the circumstances to take into account such as the existence of competition limitation agreements or the commissions that the agent loses.
Therefore, it will depend on the specific case, the effort made by the agent, the difficulty of obtaining clients or the prestige that the brand had before the agent began to sell should also be considered. work. In the words of the Supreme Court, an equity judgment must be made to set the amount of compensation for clientele (STS May 31, 2012).
In any case, the compensation for clientele must respect a maximum limit, according to the Law, corresponding to the average annual amount of remuneration received by the agent during the last five years or, during the entire duration of the contract, if this is shorter.
It should be noted that the agency contract may not introduce clauses that prevent the agent from reaching the legal maximum compensation for clientele. If so, the clause will be declared null and the agent will be able to claim the entire compensation for clientele that corresponds to him.
The right to compensation for clientele exists regardless of whether the contract had an indefinite or determined duration. This right is also generated in the event that the contract is terminated by death or declaration of death of the agent. In this case, it will be their heirs who can claim compensation for the corresponding clientele.
Compensation for damages
The compensation for damages for unamortized investments is contemplated in art. 29 of the Agency Contract Law. This type of compensation can be claimed by the agent when there is an indefinite-term contract, and the agent made investments to fulfill his commercial function in accordance with the agency contract or to generate more business for the entrepreneur.
The agent may then claim compensation for the amounts invested by the agent if the employer decided to terminate the contract unilaterally.
It seems reasonable that the Law has included this compensation. The agent was able to incur expenses under the reliance of an ongoing agency relationship. So that if the decision to end the contract corresponds solely to the employer, he must return to the agent the expenses that he could not have amortized.
This indemnity does not apply when the agency contract has a specific duration known to the agent.
Compensation for lack of notice to the commercial agent
Greater controversy is generated by compensation for lack of notice in indefinite-term contracts. The employer must notify the termination of the agency contract in advance of one month per year of contract that remains in force, with a maximum of six months, according to art. 25 of the Agency Contract Law. If this obligation to notify the corresponding period is breached, the agent could claim damages.
Our courts have established that the lack of prior notice will not automatically imply the right to compensation, nor will it necessarily be equivalent to the amounts that the agent would have received during the term of notice.
In order for compensation for damages to be claimed, the damage suffered must be real and must also be quantifiable. It must be necessary to assess the specific case to perceive whether or not there is a right to compensation
Deadline for claiming compensation from the commercial agent
The agent’s right to claim compensation for clientele and compensation for damages is prescribed by one year. Therefore, the agent must make a claim within one year from the end of the agency relationship with the employer.
Cases in which it is not appropriate to indemnify the agent
Article 30 of the Agency Contract Law establishes some cases in which the commercial agent will never have the right to compensation for clientele or damages:
- When the agent has defaulted.
The employer will not have to indemnify the agent if he decided to terminate the contract due to the agent’s breach of its legal or contractual obligations.
- When the agency relationship has been terminated by decision of the agent.
It is understood that the agent waives any compensation if he is the one who terminates the agency contract. However, the assumption that the cause of termination of the contract is the employer’s breach is excepted. In this case, the agent may claim compensation for clientele or damages.
The agent who terminated the contract due to age, disability or illness will not be prevented from claiming compensation, as long as this circumstance prevents him from continuing with his activities.
- In case of assignment of the agent position to a third party.
An agent who reaches an agreement with the employer to assign his obligations and rights to a third party who replaces him in the position of agent may not claim compensation.
