In November 2018, IDI agency & distribution country expert for UK, Edward Miller, posted an article on a recent decision by The English Court of Appeal, in which the court found that software supplied by electronic download did not fall within the term “goods” under the UK regulations on commercial agents.
The Danish Supreme Court has recently rendered a decision in a similar dispute. The dispute in question concerned an intermediary’s claim for goodwill compensation under a terminated agreement under which the intermediary sold a supplier’s mobile phones and complementing subscriptions.
Based on the travaux prepatoire of the Act, the Supreme Court explained that the deciding factor when qualifying a cooperation dealing with a combined sale of goods and services is whether the goods constitute the predominant element of the parties’ cooperation.
Based on the evidence, the Supreme Court found
– that the value of the phones was less than the value of the average length subscription
– that the phones were hardly ever sold without subscriptions
– that the parties’ primary interest and purpose was the sale of subscriptions as also indicated by the fact
– that the parties’ agreement only set out targets for the number of subscriptions sold,
– that commission and bonus was only based on the number of subscriptions sold,
– that the parties’ profit was almost entirely related to the sale of subscriptions, and
– that the sale of phones was only made to facilitate the sale of subscriptions
For these reasons, the Danish Supreme Court found that the Danish Commercial Agents Act did not apply the matter before the court, and that the intermediary was therefore not entitled to any goodwill compensation as a result of the supplier’s termination of the parties’ cooperation.
Peter E. P. Gregersen, IDI Country Expert for agency & distribution in Denmark