Marketing products from your manufacturing industry using independent salespeople, without an employment law relationship? In that case, entering into an agency agreement may be a suitable option for your manufacturing company.
The agency agreement refers to a long-term relationship between parties, where one party (commercial agent) binds itself to sell products on the market for the other party (principal). Importantly, in an agency agreement, the commercial agent concludes contracts in the name and on behalf of the principal, without there being a subordination relationship between the parties.
The method of termination in an agency agreement depends on the duration of the agreement. If the agreement was entered into for an indefinite period of time and the parties have not made any further contractual agreements on the manner of termination, in principle, the statutory notice period applies. Should agreements have been made, statutory requirements still apply, from which the parties cannot contractually deviate.
When a dispute eventually leads to civil proceedings, the court will also consider all the circumstances of the specific case when assessing whether termination is valid. For instance, the 'vaguer' concepts of reasonableness and fairness may entail that a longer notice period must be observed, a weighty ground must exist or that there is a right to damages.
What exactly happens when the agency agreement is validly terminated? In that case, the principal may still owe a fee, namely a customer fee (goodwill) based on the benefit the principal will derive from the customers brought in by the commercial agent and the contracts concluded by the commercial agent. Such compensation must in principle be claimed within a maximum of one year after termination and will not exceed that of the one-year remuneration.
