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ARTICLE · 13 SEPTEMBER 2022

Goodwill Indemnity / Portfolio Compensation

Pekin Bayar Mizrahi (in alliance with Norton Rose Fulbright)
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Portfolio compensation, also known as goodwill indemnity or clientele compensation, is one of the consequences of the end of an agency agreement.

TurkeyCorporate/Commercial Law

1. What is portfolio compensation?

Portfolio compensation, also known as goodwill indemnity or clientele compensation, is one of the consequences of the end of an agency agreement. It is the compensation to be paid to the agency, which expanded the client's business volume during their agreement, to balance out its efforts toward such increase in value on an equitable basis.

This type of compensation cannot be renounced or waived in advance. Therefore, any contractual provisions executed prior to the expiration of the contract that could prevent or limit goodwill indemnity with future effect are also void.

2. What types of contracts may raise the issue of portfolio compensation? Scope of application?

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