Commercial agents are tasked with brokering deals for other companies and are obligated under the Commercial Agents Act ("Handelsvertretergesetz" - HVertrG) to continuously seek out new business opportunities. Typically, the commercial agent does not directly conclude these deals on behalf of the company but merely brokers them.
Commercial Agency Agreement
Usually, a contract is concluded between the commercial agent and the company for which they work (referred to as the principal), which must comply with the legal framework of the Commercial Agents Act. In Austria, the rights and obligations of a commercial agent are primarily regulated by the Commercial Agents Act and EU Directive RL 86/653/EEC.
It is important to distinguish between the statutory and contractual rights and obligations and to ensure that the commercial agency agreement complies with the mandatory norms of the Commercial Agents Act.
Rights and Obligations of the Commercial Agent
The rights of the commercial agent include, among others, the right to remuneration (commission) and accurate accounting. The commercial agent also has control rights such as the right to inspect books and records.
Their main duty is to broker or conclude deals while representing the interests of their principal. This also includes the obligation to provide the entrepreneur with the necessary information and to promptly inform them of any concluded business transactions.
Obligations of the Entrepreneur
In addition to the obligations of the commercial agent, the entrepreneur, or principal, also has certain obligations. This includes the payment of the agreed commission and the provision of support in the form of information and documents. The entrepreneur also has obligations of disclosure, loyalty, and confidentiality towards the commercial agent.
The commission entitlements of the commercial agent are not subject to specific regulations regarding the basis of calculation in the Austrian Commercial Agents Act, but generally, no discounts may be considered in the calculation of the commission.
Important Contractual Points
The commercial agency agreement sets out the fundamental rights and obligations of both parties. The more precise and comprehensive this contract is formulated, the lower the risk of disputes.
Frequently asked questions during the contractual relationship concern the scope of the commercial agent's activities, mutual rights and obligations, and the amount of commission.
Questions regarding exclusivity, territorial protection, and non-compete clauses may also be significant.
Antitrust Law
From an antitrust perspective, it is also important to clarify whether the commercial agent is a "true" or "untrue" commercial agent. Only genuine commercial agency contracts are not subject to the prohibition of cartels because they are considered quasi-extensions of their principal.
To be classified as such an extended arm of the principal, a commercial agent must bear no or only insignificant risks, namely regarding the contracts concluded or brokered on behalf of the entrepreneur, market-specific investments for this area of activity, and other activities that the entrepreneur deems necessary for the same relevant market.
Compensation Claim
Section 24 HVertrG provides for a so-called compensation claim for the commercial agent. The compensation claim is due to the commercial agent after the termination of the contract. The prerequisite for this is that the contract was terminated in a compensatory manner (e.g., by termination of the entrepreneur) and that the commercial agent has attracted new customers or significantly expanded existing business relationships. It must be expected that even after the termination of the commercial agent's activities, benefits will accrue to the entrepreneur. The payment of the compensation claim must be fair, taking into account all circumstances, especially the commissions the commercial agent would have earned from transactions with the relevant customers.
However, jurisprudence or legislation also grants compensation to the distributor, franchisee, insurance agent, and franchise gasoline station operator in the meantime.
Consideration of Statute of Limitations
The statute of limitations for claims arising from a commercial agency agreement is usually three years, while compensation claims must be asserted within one year.
Commercial Lawyer
Dr. Simon Harald Baier LL.M., attorney at law, advises on commercial agency agreements, distribution agreements, and all matters of commercial law and antitrust law.