Important judgment of the Court of Justice of the European Union (CJEU) for parties of the agency contracts

According to the judgment of the CJEU commercial agents are entitled to the indemnity and compensation provided even if the termination of the agency contract occurs during the trial period.

CJEU was asked by the French Court of Cassation whether the article 17 of the Directive (86/653) providing the indemnity or compensation also applies where the commercial agency contract is terminated during the trial period, given the directive makes no reference to such a trial period.

CJEU in its judgment states that the directive does not regulate the provision of a trial period, such period falls within scope of the freedom of contract of the parties and is not as such prohibited by the directive.

Moreover, the indemnity and compensation regimes laid down by the directive are not intended to penalise termination of the contract but to indemnify the commercial agent for his past services from which the principal will continue the benefit beyond the termination of the contract or for the cost and expenses he has incurred in providing those services.

In consequence, the agent cannot be denied the indemnity or compensation on the sole ground that the termination of the commercial agency contract occurred during the trial period, as long as the conditions set out in the Directive are satisfied.

Sources: CJEU press release 51/18.

In Polish: Ważny wyrok dla przedstawicieli handlowych i zleceniodawców