1. Content

The commercial agency agreement contains a modified service contract, whereby the commercial agent undertakes to constantly strive to broker or conclude business for the entrepreneur and to acquire new customers. In return, the entrepreneur pays the agent a contractually agreed commission.

Such contracts do not need to be in writing but can also be agreed verbally or tacitly. However, a written agreement is recommended. The duration of the contract and any notice periods can be agreed upon individually in writing. If no special deadlines apply or if there is no agreement regarding the duration of the contract, the contract is valid for an indefinite period and may be terminated in accordance with the notice periods specified in Section 89 of the German Commercial Code (HGB). This notice period depends on the duration of the contract and is a maximum of six months to the end of the respective month. In the event of extraordinary termination for serious cause, the existing notice periods are irrelevant.

 

II. Obligations of the parties

1. Commercial agent  

The commercial agent remains independent by nature and can organize his working hours independently. He must follow the instructions of the company, but only to the extent that these do not insignificantly affect his activities. Furthermore, the commercial agent has the duty to inform the principal of important information, in particular overflowing business referrals and new business transactions. As a result of the so-called obligation to cooperate, the commercial agent may also be required to prepare regular reports or statements.

Consequently, the commercial agent must always pursue the goal of representing the interests of the entrepreneur and actively endeavor to conclude and broker business. The commercial agent is not limited to one area of brokerage but can broker a wide variety of goods and services.

Finally, the commercial agent has a duty of confidentiality after termination of the contract. After the conclusion or termination of the commercial agency contract, the agent is obliged to maintain confidentiality regarding the company's business and trade secrets. To this end, he must return to the company all documents, materials, customer lists and customer-specific information made available to him. A copy or retention of any information, in particular customer lists, is prohibited.

However, an exception applies here for the so-called customer file, which the representative has created independently during his activity. In case of doubt, the representative cannot be obliged to hand over the original or a copy of this file. However, a contractual agreement in this regard protects the entrepreneur in such cases.

 

2.  Entrepreneur

In general, the entrepreneur is obliged to pay the commercial agent a commission for the work performed. This is calculated on the basis of individual contractual agreements, which should preferably also be in writing, as these can often be the subject of dispute between the parties. However, the entrepreneur is not obliged to conclude the transaction brokered by the commercial agent. However, if a contract is concluded, the commission must be paid immediately, but at the latest by the end of the following month. The settlement period can therefore be extended to a maximum of three months if a contractual agreement provides for this.

Furthermore, the principal must provide the commercial agent with all documents required for the successful performance of the activity. These documents regularly include: product range, prices, delivery conditions, as well as current and completed transactions. The principal is also obliged to inform the commercial agent of any changes to these documents and to hand over price lists, samples, drawings and advertising material directly to the commercial agent.

 

3. Commission regulations and commission claims

As already mentioned above, the commercial agent is compensated by a contractually agreed commission. The amount and conditions for payment are determined individually and also depend on the industry. As a rule, commission is paid when the commercial agent directly concludes the transaction. There are exceptions for the district representative. The commercial agent also receives commission for repeat orders from the entrepreneur's customers that the commercial agent has recruited for the company. The agent's entitlement to payment of commission arises upon delivery of the goods or from the time specified in the contract.

 

The commission claim is already due upon delivery of the goods or, in the case of a corresponding contractual agreement, upon conclusion of the contract with the customer. Claims for advance payment may be contractually agreed in this respect and may not be excluded.

The following information is provided for the calculation of commission:

• Discounts for cash payments do not reduce the commission.
• Additional costs for freight, postage, packaging, customs duties, taxes, insurance costs, etc. can only be deducted if contractually agreed.
• Discounts reduce the commission if they were agreed upon from the outset.
• Subsequent discounts do not reduce the commission.
• Value-added tax does not reduce the commission, despite being shown separately on the invoice.
• In the absence of a special agreement, the commission is therefore to be paid from the VAT amount.

The entrepreneur is obliged to prepare the invoice in writing, clearly and comprehensibly. In accordance with Section 87c (I) HGB, this must be done within one month and may be extended to a maximum of three months. By law, the commercial agent has strong rights if the commission statement is late, incomplete or unclear.

 

4. Sales targets

The contractual agreement of a sales target is allowed and is often agreed as a contractual obligation, with the consequence that if the sales target is not met by the commercial agent, the entrepreneur can terminate the contract without notice for good cause. The question therefore arises as to the specific cases in which the sales target is deemed not to have been met. The entrepreneur cannot always and without further ado invoke the sales target agreement and the associated right of termination, as whether this is achieved often depends on factors that the agent cannot influence, such as the quality of the goods or the pricing policy. These are the responsibilities of the entrepreneur.

The agent therefore has no direct influence on value-forming factors, so he cannot be blamed if an agreed sales target cannot be achieved as a result. The commercial agent's claim for compensation is therefore only forfeited if he has culpably failed to achieve the sales target.

Both parties should carefully consider whether contractually agreed sales targets make sense. Commercial agents in particular should refrain from entering into such agreements as a precautionary measure due to the legal risk involved, but procedural conflicts can also arise for entrepreneurs if the question of who must be represented needs to be clarified. 

 

5. Non-competition clause

A contractually agreed non-competition clause may only restrict the commercial agent's freedom of activity to the extent that the entrepreneur has a legitimate interest in doing so. In the event of a breach of a contractually agreed non-competition clause, the commercial agent may be subject to a contractual penalty. However, this must be made dependent on the agent's culpability otherwise it is inadmissible within the meaning of Section 307 BGB.

In principle, a commercial agent can represent several companies at the same time, but care must be taken to ensure that the companies are not in competition with each other, even if there is no express non-competition clause in the contract. This also applies to multi-company agents. The commercial agent may only represent and sell the products of other companies if they do not compete with the products of the company already represented.

After termination of the service relationship between the agent and the entrepreneur, the agent is no longer bound by the non-competition clause. Non-compete clauses that extend beyond the end of the contract are only permitted to a limited extent and are restricted to a maximum period of two years after termination and provide for corresponding compensation for the commercial agent. Furthermore, it is not permitted to engage in unfair competition after the end of the cooperation. This can have legal consequences. A prohibition agreed in a commercial agency agreement that prevents any use of customer addresses after termination of the agreement is not compatible with the law under Section 90 HGB. On the contrary, it is an expression of freedom of competition if the commercial agent enters into competition with the previously represented company, even with regard to its customers. A contractual agreement that prohibits the "enticement of customers" is not in line with the transparency requirement in Section 307 I sentence 2 BGB.

On the other hand, clauses that regulate the case of insolvency of the commercial agent or the entrepreneur are permissible, as they can justify extraordinary termination.

 

III. Liability

In addition to the obligations of the parties arising from the commercial agency agreement, there are also individual liability regulations. The so-called del-credere liability for the customer's liabilities, in which the commercial agent is responsible for the fulfillment of the customer's debt, is only relevant if the requirements of § 86b HGB are met and leads to a del-credere commission.

 

IV. Special feature of the commercial agent's compensation claim

If the commercial agency agreement is terminated, the commercial agent is entitled to monetary compensation in accordance with Section 89b HGB. The claim is based on the idea that the commercial agent should participate in the development of the customer base. Indemnity up to the average annual fee for the last five years and must be asserted within one year of termination of the contract in accordance with Sections 89b et seq. HGB. Such a claim is excluded in the event of termination for cause by the entrepreneur and in case of an ordinary termination by the commercial agent.

The concrete determination of the compensation claim is often difficult in practice, as it requires a forecast of the future development of turnover based on the revenue given on the reporting date. As a general rule, a forecast period of two to three years is used, so that in the case of long-lived assets such as trucks, a forecast period of as much as five years can be assumed.