Law relating to commercial agency contracts of 13.4.1995
|•||1 month if less than or equal to 1 year|
|•||2 months if more than 1 year and less than or equal to 2 years|
|•||3 months if more than 2 years and less than or equal to 3 years|
|•||4 months if more than 3 years and less than or equal to 4 years|
|•||5 months if more than 4 years and less than or equal to 5 years|
|•||6 months if more than 5 years|
Indemnity or compensation or both
Calculation of indemnity/compensation
|•||Capped at a maximum of the average annual commission over last 5 years or, if less than 5 years, over duration of agency|
|•||Agent may also be entitled to damages in case the indemnity does not cover his proved damage for loss of customers|
Yes, up to a maximum of six months from the date of termination
Yes, although agent will not be entitled to back commission in the event that important reasons justify principal's non-performance of transaction
Principal may only terminate agency without notice within 7 days of learning of breach by agent justifying termination without notice agent has a right equivalent to principal's right to terminate agency without notice on the same conditions as than principal
Commercial Agency Agreement Act (13 April 1995)
1) Under Belgium law is it possible to have a restraint of trade clause operating during the agency agreement and, if so, is it subject to any qualifications?
Restraint of trade clauses are possible provided that the provisions of Article 24 of the Commercial Agency Agreement Act are observed.
The agency agreement may contain a non-competition clause but it is effective only if:
- it is in writing;
- it is applicable to the type of transactions with which the commercial agent was charged;
- it is limited to the geographical area or to the group of persons and the geographical area which had been entrusted to the commercial agent (Brussels, 19 October 1995, R.W., 1996-97, 393: “The competition clause is null and void if the territorial description in said clause is too broad”); and
- its applicability does not exceed a period of six months from termination of the agreement.
2) Under Belgian law is it possible to have a restraint of trade clause operating following the termination or expiry of the agency agreement and, if so, is it subject to any qualifications?
As stated above, a restraint of trade clause operating following the termination or expiry of the agency agreement must not exceed a period of six months from termination of the agreement.
The non-competition clause is not effective if the agency agreement is terminated by the principal without invoking a reason referred to in Article 19 of the Commercial Agency Agreement Act, first paragraph, or by the agent by invoking a reason referred to in Article 19, first paragraph.
Article 19, first paragraph states: “Without prejudice to any damages, either party may terminate the agreement without giving notice of termination or prior to expiration of the period of notice, if due to exceptional circumstances any professional co-operation between the principal and the commercial agent has become permanently impossible or if the other party is seriously in default in fulfilling its obligations.”
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