JUDGEMENT OF THE EUROPEAN COURT OF JUSTICE on the agent's right to commission:

Jaap VAN TILL | EU | 2008-02-18

Jaap VAN TILL

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Art. 7 (2) of the Directive provides that a commercial agent shall be entitled to commission on transactions concluded during the period covered by the agency contract:

  • either where he is entrusted with a specific geographical area or group of customers,
  • or where he has an exclusive right to a specific geographical area or group of customers, and where the transaction has been entered into with a customer belonging to that area or group.

In 1996, the Court was called upon to interpret this provision in a situation where the principal itself sold its goods to customers belonging to a geographical area which it had entrusted to a commercial agent without any action on the part of the commercial agent. The Court held that where a commercial agent is entrusted with a geographical area, he is entitled to commission on transactions concluded with customers belonging to that area, even if they were concluded without any action on his part.
The present case was about the question whether the above interpretation should also apply in a situation where the sales of goods concluded with the customer established in the geographical area entrusted to the commercial agent were not concluded not only without any action by that agent but also without any action on the part of the principal. The purchases had been made from central buying offices or dealers outside of the geographical area entrusted to the agent, outside the control of the principal.
The Court ruled that the commercial agent can claim commission on the basis of a transaction only to the extent that the principal acted, directly or indirectly, in the conclusion of that transaction. The Court added that it is for the National Court to establish whether or not the evidence before it, assessed in the light of the aim of protecting the commercial agent and of the obligation on the principal to act dutifully and in good faith under Art. 4 of the Directive allow it to establish the existence of such action by the principal, be that action of a legal nature, for example through the intermediary of a representative, or of a factual nature.

 

 

Jaap van Till, IDI country expert for Netherland

 

 

The text of the judgment, together with most important decisions on this subject-matter, can be found in the database of the European decisions, in the EU Section of the IDI website.

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