Commercial Agents

Any organization or individual whose permanent occupation is to independently negotiate business on behalf of a third party, is considered a commercial agent.

German legislation, regulating commercial agents, contains certain mandatory provisions which may not be amended or altered to the disadvantage of the agent. A minimum period of giving notice must be adhered to in the case of an unlimited contract for the termination of the agreement. Giving notice periods may not be less than one month in the first year of a contract, two months in the second year, and three months in the third, fourth, and fifth year of a contract. In contracts of over five years, notice must be given six months in advance. Termination of an agreement may only occur at the end of a calendar month, provided that no arrangement to the contrary was previously agreed upon. This does not apply to the right to terminate a contract without notice in case of extremely grave lapses. The termination of a contract entitles the commercial agent, under certain conditions, to a final settlement claim of up to a one years` commission. This maximum commission is calculated on the basis of the agent–s average earnings over the period of the previous five years. A non-competition clause, which restricts the activities of a commercial agent following the termination of a contract, may only be enforced for a period not exceeding two years and is only permissible with the simultaneous agreement to pay an appropriate compensatory sum.

The conditions determining how and the timeframe in which the commission is to be paid, as well as how an agent is allowed to check the calculation of the commission, are determined by mandatory regulations.