send mail to the editor
Doing business in the Netherlands - company formation in Holland
  • Home
  • Starting a business in the Netherlands
    • Setting up a business in the Netherlands
    • Setting up a company in the Netherlands
    • Company name search in the Netherlands
    • Registration of a company in the Netherlands
    • Shareholder of a company in the Netherlands
    • Transfer of shares in the Netherlands
    • Management board in the Netherlands
    • Supervisory board in the Netherlands
    • Shareholders' meeting in the Netherlands
    • Piercing the corporate veil in the Netherlands
    • Liability of directors in the Netherlands
    • Liability of shareholders in the Netherlands
    • Inquiry proceedings in the Netherlands
  • Employment law in the Netherlands
    • Duration of employment under Dutch law
    • Probation period in the Netherlands
    • Non-competition under Dutch employment law
    • Sick pay in the Netherlands
    • Reorganizations in the Netherlands
    • Works council in the Netherlands
  • Commercial contracts in the Netherlands
    • Commercial agency in the Netherlands
    • Termination of an agency agreement under Dutch law
    • Goodwill compensation under Dutch agency law
    • Franchising in the Netherlands
    • Distributorship in the Netherlands
  • Contact the editor

Termination of an agency agreement - under Dutch law

  • Home
  • Termination of an agency agreement under Dutch law

How do you terminate an agency contract - under Dutch law?

Termination of an agency agreement under Dutch law

Termination in commercial agency is not always mutual, thus questions of rights and entitlement to compensation tend to arise. Generally, the agent, who is considered the more vulnerable party, is intended to be the more protected. However, liability for termination can extend to both the principal and the agent.


Early termination of an agency agreement under Dutch law

Termination of an agency agreement formally occurs during the contractually agreed date, or automatically at the end of a fixed term agreement. However, agreements entered into for an indefinite period of time can provide for an opportunity of early termination, subject to certain qualifications.


Notice period when terminating an agency agreement under Dutch law

When contemplating early termination of an agency agreement, either party can do so providing they comply with the contractual notice period. The length of this notice period is dependent on the duration of the agency agreement itself, the longer the contract, the longer the period of notice. This is reflected In practice, with the first year of a contract requiring a notice period of no less than one month and no less than two months for the second year. Any subsequent periods after this usually must adhere to a three month notice period. The parties themselves can agree to longer notice periods if necessary.


Summary termination of an agency agreement under Dutch law

A commercial agency agreement may be immediately terminated in light of a serious breach of contract. This breach, must be of a substantial nature and have a serious impact on the operation or results of the agency agreement. It is allowed both when contractually permitted or when it would be considered unreasonable for the agency agreement to continue. This decision and its reasoning, must be immediately communicated to the other party. However, if this course of action is taken absent sufficient justification, then it will likely give rise to a claim of damages.


Sub-agents in the Netherlands

The possibility for sub-agents to claim compensation in the event of termination very much depends on the facts and circumstances in question. In practical terms, a sub-agents’ agreement is between himself and the primary commercial agent. The principal has limited contractual connection to the sub-agent and as such, is not likely to be liable for their losses. However, this can differ depending on the arrangements agreed in the contract between all the actors involved. For sub-agents, this could provide a direct route to claim compensation from the principle, but more likely, will involve the sub-agent claiming a part of the compensation awarded to the main agent by the principal.


Rights upon termination of an agency agreement

In the event of premature termination or termination without due cause, then the principal will be required to make post-termination payments to the agent, for losses sustained from their investment in the agreement. The exact sum of this compensation should be equal to the remuneration that would have been granted for the remainder of the agreement, up until a termination reached through a consensus of the parties. This basis would be calculated by the commission earned in the previous years of the agency engagement.


Starting a business in Holland

Dutch company law
Setting up a business Company formation Company name search Registration of a company Shareholder in the Netherlands Transfer of shares Management board Supervisory board Shareholders' meeting Piercing the corporate veil Liability of directors Liability of shareholders Inquiry proceedings
Employment law in the Netherlands
Duration of employment Probation period Non-competition clauses Sick pay in the Netherlands Business reorganization Works council in the Netherlands
Commercial contracts under Dutch law
Agency contracts Termination of agency Goodwill compensation Franchising in the Netherlands
Business in the Netherlands? Call us.
Disclaimer, terms of use, editors

This website is a private initiative of the editor. The content provided on www.business-netherlands.com is offered for general informational purposes only. It cannot deal with the specific details of any particular situation ... [read more]

Contact

Beethovenstraat 124 / 3
1077 JR Amsterdam
The Netherlands

Mail the website editor:
+31 6 52 242503

Other resources
  • Corona and contracts in the Netherlands; what legal remedies do contract parties have under Dutch law?
  • Trends in the Netherlands; 2017 [Pdf]
  • Netherlands Commercial Court; commercial dispute resolution in the Netherlands.
Newsletter Signup

Subscribe to our newsletter to get news on doing business in The Netherlands:

Lawyer in the Netherlands - legal editor © 2020 | Sitemap [XML] | Sitemap [HTML]