The document provides for amendments to the Civil Code in respect of requirements for the conclusion and execution of commercial representation agreements.
Thus, for agents who sell another person’s products on the market, the contract will contain a prohibition or restriction on carrying out activities after the termination of the contractual relationship. In the context of the so-called non-competition obligation.
Right to compensation and damages
In addition, the draft specifies cases in which an agent is entitled to compensation and reimbursement of losses upon termination of contractual relations.
According to the document, this happens if he attracted new customers to the principal (customer) or made a significant contribution to the growth of transactions with existing customers, and due to this the principal continues to benefit. Then compensation is fair, taking into account all the circumstances, including commissions lost by the agent.
At the same time, the amount of compensation cannot exceed the annual remuneration calculated on the basis of the agent’s average annual remuneration over the last 5 years or, if the contractual relationship lasted less than that period, on the basis of the average amount over the period of the contract.
The payment of compensation does not limit the agent’s right to claim damages as a result of the termination of the contract. For example, if he has lost the commission he would have received if the contract had been executed. Or if the agent has been unable to reimburse expenses incurred for the fulfillment of the contract.
However, he will lose the right to compensation or damages if he fails to notify the principal within one year from the date of termination of the contract of his intention to make use of it.
The right to compensation or damages may also be exercised if the contract is terminated due to the death of the commercial agent.
