Calculation of the commercial agent's allowance

There is no need, for the purposes of assessing the termination indemnity of the commercial agent, to take into account circumstances subsequent to the termination of the contract, such as the conclusion by the agent of a new contract with a view to prospecting the same clientele for another principal.

This dispute concerns the termination of a commercial agent agreement between Habilis and its agent, which was served on 4 December 2020.

The agent sought compensation for the damage suffered as a result of the breach of his contract, but the Court of Appeal had limited the compensation to 10,000 euros. The agent therefore challenged this decision, arguing that the termination indemnity should be calculated on the basis of future income lost due to the exploitation of the joint clientele, and not on the basis of circumstances after the termination, such as the absence of a non-competition clause or the fact that he has found a job.

The Court of Cassation examined the ground of cassation invoked by the agent, which was based on Article L.134-12 of the Commercial Code, which provides:

“In the event of termination of its relationship with the principal, the commercial agent is entitled to compensation for the damage suffered.

 The commercial agent loses the right to compensation if he has not notified the principal, within one year of the termination of the contract, that he intends to assert his rights.

The successors of the commercial agent also benefit from the right to compensation when the termination of the contract is due to the death of the agent. 

The Court of Cassation recalls that it follows from this article that the termination of the commercial agency contract gives the right to compensation for the damage resulting, for the commercial agent, from the loss for the future of the income derived from the exploitation of the joint clientele. There is therefore no need, for the purposes of assessing this prejudice, to take into account circumstances subsequent to the termination of the contract such as the conclusion by the agent of a new contract with a view to prospecting the same clientele for another principal.

In this case, the Court of Cassation criticizes the Court of Appeal for having fixed the compensation for termination taking into account the fact that the contract did not include any non-competition clause, and that the agent found employment in the same branch almostimmediately and that he did not produce any element on the commissions he had received since the termination of the contract.

Indeed, these reasons are unfit to assess the damage resulting from the termination of the commercial agency contract, which is constituted by the loss for the future of the revenues derived from the exploitation of the joint clientele.

Consequently, the Court of Cassation quashed and annulled the judgment of the Court of Appeal of Saint-Denis, but only with regard to the determination of the compensation for breach and costs.

As a reminder, the law does not set the amount of compensation that the commercial agent receives in principle upon termination of his contract. The amount of the indemnity varies in particular according to the duration of the seniority of the contractual relationship and the amount of turnover achieved with the principal.

In accordance with custom, the amount of compensation is generally equal to the amount of commissions received during the last two years calculated on the average of the last 3 years of execution of the mandate (CA Paris, November 2, 2017, No. 16/13857; CA Versailles, December 5, 2019, No. 18/07600), or a lower amount if it lasted less than two years.

The trial judges retain a sovereign power of appreciation (Cass. Com., 24 May 2011, No.10-14.224).

Here are some examples:

• 2 years of commissions, for relationships lasting 12 years (CA Montpellier, 8 Oct. 2019, No. 17/00417);
• 18 months of commissions, for a contract that lasted 2 years (CA Paris, May 25, 2023, No. 20/13729);
• 12 months of commissions, for a contract that lasted 12 months (CA Lyon, October 27, 2022, No. 19/04567);
• 9 months of commissions, for a contract that lasted 1 year and a half (CA Poitiers, November 7, 2023, No. 22/01754).

Court of Cassation 29 January 2025 Appeal No. 23-21.527