GRP Rainer Rechtsanwälte: Valuation of commercial agents right to compensation

GRP Rainer Rechtsanwälte: Valuation of commercial agents right to compensation

GRP Rainer Rechtsanwälte: Valuation of commercial agents right to compensation

After a commercial agency agreement has been terminated, the commercial agent is normally entitled to compensation. The assessment of the extent of this right to compensation frequently gives rise to disputes.

During their period of service to a company, commercial agents maintain existing contacts and establish new ones. If the commercial agency agreement is terminated, we at the commercial law firm GRP Rainer Rechtsanwälte note that the commercial agent is entitled to compensation if the company continues to maintain business relations with the newly acquired clients and profit from these. Even if the collaboration between the commercial agent and the company was successful and harmonious over a period of years, the extent of the right to compensation is often a matter of contention between the parties. Here at GRP Rainer Rechtsanwälte, we assess the value of this entitlement to compensation having regard to the extent to which the company will still be profiting in the future from the business contacts acquired through the commercial agent.

The second sticking point that commonly emerges when evaluating the commercial agent”s right to compensation is the classification of new clients. The central question here is whether it is possible for an existing client to be classified as a new client if commercial relations were expanded by the commercial agent and extended to additional products.

In April 2016, the Court of Justice of the European Union (CJEU) held that an existing business contact can be classified as a new client in this type of case, ruling that the expression “new client” ought not to be interpreted too narrowly. The Court stated that if the commercial agent succeeds in extending business relations with an existing client to new products, then said client can absolutely be considered a new client. It went on to say that the decisive factor here is which products the commercial agent introduced to the client. If an existing client is classified as a new client, this will affect the extent of the commercial agent”s entitlement to compensation. The CJEU noted, however, that if commercial relations with the client in question were already in place, this can be accounted for in the calculation.

Lawyers who are experienced in the field of commercial law can assist both commercial agents and businesses in drafting commercial agency agreements, calculating the value of claims as well as terminating contractual relationships.

GRP Rainer LLP is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

GRP Rainer LLP
Michael Rainer
Augustinerstraße 10
50667 Cologne
+49 221-27 22 75-0
+49 221-27 22 75-24