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The Commercial Agent cannot renounce his/her end-of-contract indemnity in advance

The Commercial Agent cannot renounce his/her end-of-contract indemnity in advance

The Commercial Agent cannot renounce his/her end-of-contract indemnity in advance. There is no doubt about it. However, during an order of 21 October 2014 (13-18370) which we are dealing with here, the Court of Cassation had to, however, recall this principle.

Articles L 134-12 and L 134-13 of the Commercial Code raise a principle and an exception. The principle is that compensation for termination of contract is due to the commercial agent in the event of termination of the relationship between the principal and the commercial agent. The exception posed by article L 134-13 corresponds to the sole hypotheses in which compensation is not due: serious misconduct, resignation of the agent, etc.

And, due to article L 134-16 of the Commercial Code, it is not possible to derogate from these rules, except in favour of the commercial agent.

On several occasions, the case law has already had the opportunity of recalling that the commercial agent did not renounce his/her compensation for breach.

In the extension of this rule, (we were asked the question most recently, we mention this specific example in particular) it has thus notably been judged that the fact of stipulating contractually an increase in the commission due to the agent during the execution of his/her contract and that in counterpart the latter cannot claim compensation for breach of contract could not prevent the commercial agent from claiming such compensation eventually (Cass. Com. 17 June 2003, Bull. Civ. IV, no. 99, D. 2003, p. 2428, obs. D. F., RJDA December 2003, no. 1170, p. 1018).

In the case having been the subject of the order of the Court of Cassation of 21 October 2014 which is in question here, the facts were quite original. As a matter of fact, the commercial agent had not renounced his/her compensation for end-of-contract in the terms of the commercial agent contract that s/he had entered into with his/her principal.

It is in the terms of an employment contract which s/he had signed in the capacity of employer with an employee, that the commercial agent had renounced to request any compensation for his/her employee as well as his/her own principal if the aforesaid employee breached his/her employment contract with him/her and that the aforesaid employee decided to collaborate with his/her principal in a different legal structure.

So, what was bound to happen did happen!

The employee breached his/her employment contract in order to collaborate with the principal of his/her former employer.

Of course, the commercial agent-employer was then thanked by his/her principal and will ask the latter for payment of his/her compensation for end of commercial agent contract.

The principal opposing his/her former commercial agent the clause of renunciation appearing in the employment contract that the commercial agent-employer had signed with his/her employee, the commercial agent ousted asserted the public order nature of compensation for termination of commercial agent contract and, consequently, the unwritten nature of this clause.

Rightly, the Court of Appeal ruled that this clause clearly constituted renunciation in advance of the commercial agent to his/her right to compensation for termination of contract, was therefore contrary to public policy and granted the request for compensation for end-of-contract of the commercial agent.

In the terms of its order of 21 October 2014, the Court of Cassation logically confirmed this solution.

 

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Specialised in commercial agent law and managing over a long time the issues linked to the breach of commercial agent contract, FOUSSAT AVOCATS advices and assists its clients throughout the life of their commercial agent contracts, including in the event of international contracts, as well as concerning their conclusion, execution and cessation.

We are therefore at your disposal for any additional information that you may wish.

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