In addition, Europe has a directive (Directive 86/653/EEC) which aims to harmonize the individual laws of Member States with regard to trade agency contracts. This directive is of great importance for all agency contracts within the European Union. The directive contains binding provisions for all activities taking place on European territory. The application of US law to an agreement between a European agent and an American client would destroy the European Commission`s protection structure. To avoid this, the Court of Justice decided to give effect to the directive. A European agent can therefore invoke European law at any time if the Agency`s treaty has adopted a non-European law. It is important to define, in agency contracts, in which situations and under what conditions the commission should be paid. The parties are free to agree on the amount of the commission. In a recent decision, the Supreme Court ruled that there was a precondition for beginners; Since the judgment of May 19, 2017, the agent must first demonstrate that the client still benefits from the customers imported by the agent. It is only when the agent has demonstrated the aforementioned plausibility that the calculation of compensation is taken into account in accordance with the aforementioned three-step penalty. Within the European Union, there is legislation to provide some protection to agents, in particular the right to compensation in certain circumstances when an agency is dismissed. The same is true in other parts of the world, and in some countries it is necessary for a foreign manufacturer to designate as an agent a person or company that is a national of the country in which the Agency will operate.
Under the 1993 Commercial Agents Regulations (the “Regulations”), an agent is generally entitled to payment if his agency contract is terminated by the client (unless the contract is terminated due to an agent`s breach). The regulations provide for two different payment schemes: compensation and compensation. The parties are not in a position to enter into a contract based on these provisions of the regulations. Shearman was the agent of the famous wellington Boot Company and his agency contract was terminated. By calculating his entitlation on the basis of compensation, Mr. Shearman would have received approximately $1.45 million. On the basis of compensation, he would have received only $204,000. He therefore argued that the termination clause in his agency contract was unenforceable and that he should be compensated. Disputes may arise over the conclusion or termination of a commercial agency contract.
The law that leads to most disputes is Regulation 17. Regulation 17 grants the commercial agent the right to compensation or compensation when the client terminates his contract for a reason other than a delay by the agent that warrants immediate termination.