Under new Regulations on termination of an agency contract, a commercial agent, is deemed to be entitled to compensation for the damage which he suffers as a result of the termination of his relations with the principal.

A recent Court of Appeal decision in England held that such compensation for damage is to be calculated at an amount equal to the commission that the agent would have earned if the contract had continued to be performed in the manner that the parties intended.

These new Regulations were introduced in response to a proposal by the EU Commission to institute proceedings against Ireland for not correctly implementing the Directive on Commercial Agents. The Directive (which we discussed in our Autumn 1993 Newsletter) requires that EU Member States choose whether commercial agents are to be entitled to an indemnity or compensation on termination of the agency contract and to provide accordingly in the legislation implementing the Directive. Prior to the introduction of the new Regulations, Ireland had failed to make a choice in this matter.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.