Compensation for Loss of Agency Rights Includes Goodwill

The impact of European legislation has meant that for over a decade, commercial agents have been entitled to seek compensation for the losses they suffer when the principal terminates their agency agreement.

Unfortunately, the applicable law does not say how such losses should be calculated. A recent Court of Appeal case addressed this issue, when an agent claimed compensation for the loss of goodwill resulting from the termination of one of his agencies.

The case concerned a manufacturer’s agent who represented a shoe manufacturer between 1990 and 2003. The agent was paid £7,500 in compensation, but sought a further payment for the loss of goodwill resulting from the termination. The Court ruled that the legislation was intended to compensate agents for the full damage they suffer and concluded that this should include any loss of goodwill.

 

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