AUSTRIA: a new judgment of the Supreme Court on immediate termination of an agency agreement (Austrian Supreme Court 30 July 2007, 8Ob70/07p)
A commercial agent (in the case at hand a tenant of a petrol station) failed to deposit a security as he was contractually obliged to. For this case the contract stipulated that the principal may terminate the contract without notice. The principal exercised this right. As in the opinion of the commercial agent the termination was impermissible he sued for damages and compensation for loss of clientele.
The courts of first, second and last instance dismissed the action. In their opinion the contractual parties may effectively stipulate good reasons which justify immediate termination (as long as they do not concern i.e. unrealistic objectives or other contents contradicting good faith). It would have been up to the commercial agent to proof that no fault was attributable to him (i.e financial difficulties not due to the fault of the agent). In the case at hand the agent had not even alleged such facts.
Gustav Breiter, IDI country expert for Austria.
The text of the judgement can be found in the Austrian page of the Reports Section of the website, while the relevant legislation concerning agency and distribution agreements in Austria can be found in the Legislation Section of the Website.
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