Twitter Logo Youtube Circle Icon LinkedIn Icon

Publishing firms

Legal Developments worldwide

OLG München – Extraordinary termination of a commercial agency agreement

November 2018 - Corporate & Commercial. Legal Developments by GRP Rainer LLP.

More articles by this firm.

It is possible for a commercial agency agreement to be extraordinarily terminated for good cause if the relationship of trust between the parties has broken down. That was the verdict of the Oberlandesgericht (OLG) München, the Higher Regional Court of Munich.

A commercial agency agreement can be terminated by any party to the agreement if there is good cause for doing so. We at the commercial law firm GRP Rainer Rechtsanwälte note that sec. 89a of the Handelsgesetzbuch (HGB), Germany’s Commercial Code, provides that this right cannot be excluded or limited. However, the legislature left open the definition of what exactly constitutes good cause. According to a ruling of the OLG München from 8 February 2018, there is deemed to be good cause justifying termination of a commercial agency agreement if the relationship of trust between the parties has irretrievably broken down and it is no longer reasonable to expect further cooperation in consideration of all factors relevant to the circumstances of the specific case (Az.: 23 U 1932/17).

In the instant case, the plaintiff had entered into a commercial agency agreement with the defendant, according to which it was amicably settled that activities relating to the role of the commercial agent would be carried out by the plaintiff’s husband. When the latter downloaded extensive data records onto his private computer without permission, the company issued extraordinary notice of termination. The plaintiff took action against this, demanding, among other things, payment of commission, bonuses and a commercial agency settlement.

The OLG München held that the extraordinary notice of termination had been justified, ruling that downloading and saving the data records had not been necessary for the purposes of carrying out activities relating to the role of the commercial agent and that the plaintiff could be held responsible for her husband’s conduct in this regard. The OLG München took the view that downloading the data without permission was so serious that the relationship of trust between the parties had irretrievably broken down and it was no longer reasonable to expect the contractual relationship to continue until the end of the ordinary notice period for termination. The Court stated that the fact that the plaintiff had worked with the company for more than 20 years changed nothing. It went on to say that it had not even been necessary to issue a prior formal warning, as the relationship of trust had been severely shaken by the impropriety, such that the former could not be restored with a successful warning.

Legal disputes between commercial agents and commercial enterprises are common. Lawyers who are experienced in the field commercial law can advise on matters ranging from drafting to terminating a commercial agency agreement.

Click here for more information.