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GRP Rainer Rechtsanwälte – Experience with right of authorized dealer to claim compensation

August 2018

Like commercial agents, authorized dealers may also be entitled to claim compensation after the relevant agreement has been terminated. For this to happen, certain conditions need to be fulfilled.

Unlike commercial agents, authorized dealers operate under their own name and for their own account. The latter markets another company’s products under its own name, whereas a commercial agent enters into agreements and transactions on behalf of the company. In return, the commercial agent receives commission and is normally entitled to claim compensation once the commercial agency agreement has been terminated. We at the commercial law firm GRP Rainer Rechtsanwälte note that authorized dealers can also be entitled to this right to claim compensation under certain circumstances.

The reasoning behind the commercial agent’s right to claim compensation is that he has established business contacts which the company will continue to benefit from even after the agreement has been terminated and without having to continue paying commission. While the authorized dealer conducts business under their own name and bears the associated entrepreneurial risk, he might nonetheless be entitled to claim appropriate compensation from his contractual partner pursuant to sec. 89 b) of the Handelsgesetzbuch (HGB), i.e. the German Commercial Code.

One of the conditions for the analogous application of sec. 89 b) HGB entails the authorized dealer having committed to transfer their client base to the contractual partner, with the result that the latter can continue to benefit from the client data even after the agreement has been terminated. The authorized dealer should also be involved in the company’s marketing in a similar fashion to a commercial agent. He needs to be involved to the extent that he has extensive obligations to perform commercially-relevant tasks that are otherwise assigned to a commercial agent (BGH, VII ZR 315/13).

According to the provisions of sec. 89 b) HGB, the authorized dealer’s right to claim compensation cannot be excluded in advance. This applies both to authorized dealers operating in Germany as well as, following another ruling of the Bundesgerichtshof (BGH), Germany’s Federal Supreme Court, those operating within the EU or the EEA (ruling from February 25, 2016, Az.: VII ZR 102/15).

Authorized dealers may therefore be entitled to claim compensation, but certain conditions need to be fulfilled for this to happen. Lawyers who are experienced in the field of commercial law can serve as expert advisors in the event of legal disputes and when drafting agreements.

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