The commercial agent plays a decisive role in entrepreneurial success and the marketing of the goods and services offered by the company. In addition to authorised dealers, franchise companies and commission agents, commercial agents are an integral part of economic distribution structures. This characteristic of the commercial agent as the central figure in the distribution of a company is accompanied by many rights and obligations on both sides. For this reason, some essential legal aspects must be considered when drafting a commercial agency contract. Our commercial law legal team reviews, drafts, and revises your commercial agency contracts and ensures that the rights and obligations of both parties to the agreement are clearly and comprehensibly formulated.
The commercial agent’s first and foremost duty is to mediate and conclude transactions in the company’s interests actively. In addition, they have to fulfil far-reaching responsibilities to inform the entrepreneur and must comply with their non-competition clause. This can be maintained on a contractual basis even after the termination of the agency agreement. In return, the entrepreneur has an obligation to instruct the commercial agent and provide them with the materials and documents necessary to perform their commercial agency duties. During the contract term, the commercial agent is also entitled to commission payment from the principal and, after termination, to compensation per § 89 b HGB.
Parties should discuss the following contractual elements in any case in the commercial agency contract:
- Authorisation of the entrepreneur or third parties to independently market the goods in the contract territory,
- Commercial agent’s rights of use of industrial property rights,
- Confidentiality obligations,
- Contract territory, regional limitation,
- Credit assessment,
- Non-competition clause, in particular, regulation of the post-contractual,
- Settlement of commission and compensation claims,
- Termination of the contract (duration, termination),
- The obligation of secrecy,
In addition, the classic sales structures, such as distribution through sales representatives, are also subject to the changes brought about by globalisation and digitalisation. The importance of e-commerce, the variety of Internet platforms and the revenue generated through Internet sales constantly increase. Commercial agents also perform their intermediary and brokerage activities via the Internet. However, other digital requirements may become relevant, requiring special attention when concluding or extending a commercial agency agreement.