Commercial agency agreements: Duration of the contractual relationship

Commercial agency agreements can be concluded for both a definite and an indefinite period of time. When concluding a fixed-term contract, the contractual relationship is for a limited duration, i.e. the future dissolution of it is already mutually determined in advance, when the contract is concluded. Pursuant to Sec. 20(2) Commercial Agency Act (HVertrG), if the contracting parties continue the contract once the agreed period has expired the contractual relationship is extended for an indefinite period of time.

In such a case, as well as in cases where commercial agency agreements have been concluded for an indefinite period of time right from the outset, the periods of notice stipulated by law, pursuant to Sec. 21(1) Commercial Agency Act (HVertrG) are to be observed (any agreements to the contrary are invalid):

A one-month period of notice in the first contractual year, two months’ notice once the second contractual year has commenced, three months’ notice once the third contractual year has commenced, four months’ notice once the fourth contractual year has commenced, five months’ notice once the fifth contractual year has commenced, and six months’ notice once the sixth contractual year has commenced and in any subsequent contractual years. Unless the contracting parties agree anything to the contrary, the termination shall only be permissible to the end of a calendar month (Sec. 21(4) Commercial Agency Act (HVertrG)).

The claim to compensation pursuant to Sec. 24 Commercial Agency Act (HVertrG) is compensation for the commercial agent in regard to the customer base acquired by it, which remains with the company.

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