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AUSTRIA: The "service commission" is actually part of the regular commission for transmission of business (Austrian Supreme Court April 29, 2019 - 2 Ob 30/19d).

In commercial agency contracts, there are sometimes breakdowns of the commission for conclusion, support during assembly, extensions, maintenance contracts and even for "support". A dispute arises when the principal wants to cut it because the support has not or has no longer been provided. The fundamental character of such "service commissions" must be questioned.

Gustav BREITER - 18.11.19
Country expert

A commercial agent has mediated contracts for the rental of advertising space on trolleys in supermarkets and on dividers at the cash registers. He did this from 2005 to 2014. Due to commission arrears (in particular of "service commissions"), he first declared ordinary termination and then termination without notice.

The commercial agent asserted a claim for indemnity and the outstanding commissions. The defendant principal alleged that he had the right to retain the service commission. The agent would have accomplished the support at all only 2013 to the owed extent, then however stopped to submit with the agreed reports. The principal would therefore have paid too much commission in the past because the agent had not fulfilled his obligations.

What had been agreed? According to the agency agreement, the agent was "obliged to visit his customers regularly, but at least twice per advertising year". On written instruction, he must send reports about those customer visits. And more general: "The commercial agent shall report in writing on his visits to customers". In addition to a basic commission of 10%, the "sales agent conditions" also included a "customer service commission" of (further) 10%.

The court found that the principal (only) requested visit reports and created forms in 2013. The managing director has indicated that these are to be used immediately. The agent submitted these until December 2013, but not after that, as he saw no sense in them.

Commercial agents who took over customers from retired colleagues did not receive any service commission, even if they visited the customers and filled out visit reports.

The court of first instance saw the activity of commercial agents as the acquisition of contracts and the renewal of contracts. The court was unable to see any "independent" support services. Thus the "customer service commission" could not settle such activities, but "only" the acquisition as such. In fact, it was a commission for the conclusion or renewal of contracts. Insofar, no unsatisfactory support could be reproached to the plaintiff, which would have had a commission-reducing effect.

The court of appeal has confirmed and "supplemented" this: The witnesses and the managing director could not have explained nevertheless at all in detail, which concrete achievements would have been to be furnished as customer service. The content of the "market and customer analysis" they mentioned remained open. And that the customers were to be asked whether they wanted to change the supermarket or the subject and the general "feedback" do not appear weighty enough to consider a commission of further 10% (thus in the same height as the acquisition commission) as an independant service commission. The contract did not even define which support services would have to be provided. In this regard, the contract is just "not enough substantial".

Whether the commercial agent filled out the visit reports or not was no longer relevant.

In the result it was crucial that the commercial agent contract did not contain a linkage between claim for commission and support. Therefore, the fact that visits shall be made twice a year was regarded as a "recommendation" after the customer service was not defined in terms of content.

The only independent service that remained was filling out the forms, which alone could not bear the character of a (genuine) service commission. An independent support service would be – for example as with insurance agents - support in the event of damages.

The Supreme Court confirmed this insofar as the extraordinary appeal was rejected. In addition, the Highest Court supplemented: in the result, the parties had agreed that the service commission was, in fact, part of the regular commission. The parties' unanimous will is the main norm of the contract.

 

Gustav Breiter, IDI Country Expert for agency & distribution in Austria

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