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Right to Customer Compensation in Commercial Transactions

posted 2 months ago

Frequent phenomenon in commercial transactions, in Greece and abroad, is the termination of cooperation between traders. Due to the booming trade both nationally and internationally, the phenomenon of recycling partnerships is in full force. But what happens in cases where the commercial agent brought new customers to the company he or she represented or significantly advanced business with existing customers? Is he or she entitled to customer compensation?

When a year-long partnership is terminated, the commercial agent expects to receive some compensation for the benefits which, thanks to his or her own efforts, remain with the represented company for the following years. That’s what customer compensation is.

Customer compensation is defined as the fair compensation to which the commercial agent is entitled after the termination of the commercial agency contract for the concession of the customer portfolio that he has built up over the years of cooperation with the principal, if and insofar as he has contributed to the expansion of the stable customer base or has significantly promoted business with the existing customers of the principal.

The right to compensation for the clientele is a special claim, the creation of which does not require any unconventional or unlawful conduct on the part of the former principal.

The amount of this compensation is determined in Greece on the basis of Presidential Decree 219/1991, which incorporates Directive 83/653/EEC of the Council of the European Communities. As a general rule, the amount of that compensation may not exceed an amount equivalent to the average annual remuneration received by the commercial agent over the last five years and, if the contract has lasted less than five years, the compensation is calculated on the basis of the average of that period. The exact determination of the amount of compensation is a result of a variety of elements which are evaluated on a case-by-case basis.

Our law firm specializes in commercial law and has handled many types of client compensation cases. Whether you are the commercial agent or the principal, we safeguard your rights with a professional approach of your file. Contact us at [email protected] to discuss your unique case!

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