Seven key points on the resolution of the agency contract
What are the consequences of exceeding the agent, regarding the termination of the contract, compensation for customers and damages?
The agency contract It is one of the legal instruments most used in the trade and generates quite a few conflicts that are resolved by the courts.
This time we review a case of Resolution of the agency contract by agent compliance, seen by the Sentencia de la Audiencia Provincial de Madrid de 29 October 2015.
Kivemu S.L. agent was signed Dermofarm S.A. until it, decides to terminate the contract.
Kivemu demand Dermofarm court.
The Court of First Instance No. 83 de Madrid desestimó la demanda of Kivemu, in view of which had not been met sales targets agreed with Dermofarm.
The prescription to bring an action for compensation for customers covered by Article 31 of the Law of Agency Agreement is only year from the termination of the contract. This requirement may be interrupted. The damages also prescribes a year. Other actions relating to the contract, They are subject to the statute of limitations set by the Commercial Code, as provided in Article 4 of the LCA. Specifically, the claim for unpaid commissions has a statute of limitations 3 years old.
2.-The deficiencies of the agent
Article 30 of the LCA, states that the agent is not entitled to compensation for clientele “when the employer had terminated the contract due to breach of contractual or legal obligations established by the agent”.
In that case the ruling may be immediately, without notice period (article 26 LCA).
If the agent has breached the contract, not appropriate compensation for clientele (SSTS 15 February and 16 May 2001 and 20 May 2004). In this case, no sales targets were met for two consecutive years. The contract, It was expected that if there was no agreement for setting future goals, They would be kept the above, factor increased by 10%. For the Board, the fact that the agreement does not give, does not prevent those that had previously applied (as envisaged by the contract) when assessing the breach ahead of a resolution.
Estimated the existence of grounds for termination, Hall no longer comes to value other alleged causes. Dismisses Kivemu and confirms the judgment of the Court of First Instance, which he dismissed his claim.
In addition to the issues encountered in the judgment cited, There are other points that often result litigious:
For the agent to act subagentes you need the consent of the employer (art. 5.2 LCA).
Unless expressly stated against, the agent is not entitled to reimbursement of expenses that their activities generate.
It establishes a notice for termination in the event that the agency contract is indefinite: one month per year, with a minimum of one month and a maximum of 6 months.
Upon termination for breach by the other party, no notice period is necessary.
6.-Compensation for customers
Upon termination of the contract, if the agent had brought new customers or had substantially increased sales with existing, he shall be entitled to compensation for clientele provided that certain circumstances, as it may be that continue to produce substantial benefits for the entrepreneur, it has agreements limiting competition or other, which they must be assessed by the courts.
But this compensation in no case, may exceed the average annual remuneration calculated on the last five years, or if it has lasted less than a year, perceptions of the total for that reason (article 28 LCA).
7.-Compensation for damages
If the employer unilaterally denounced a permanent contract of agency, You will be obliged to pay the expenses that the agent was unable to repay, provided that it has incurred them by express order of the employer (art. 29 LCA).
In case of default by the agent, no right to damages.
In upcoming posts, We review the most recent case law on termination of contracts of agency.