On the occasion of a court decision dated 18 May 2010, the commercial chamber of the Suprem Court (Cour de cassation) upheld the rule pursuant to which the amount of the termination indemnity of the commercial agent agreement can not be fixed in advance by the parties.
Indeed, in this case, pursuant to an agreement dated 11 December 1991, a non exclusive GENERALI insurance agent had appointed Mrs Y as a sub-agent. This agreement also provided for the payment of a sub-agent indemnity should her activity cease as follows: “Life: one year of the commissions received from business carried out other than the portfolio of M. X (the agent)…”
In November 1993, not even two years later, M. X revoked the Mrs. Y’s sub-agent mandate, offering to pay her the indemnity as provided for in the agreement.
Under the ruling of the Court of Appeal of Montpellier dated 10 March 2009, M. X, the insurance agent, was ordered to pay Mrs. Y, his sub-agent, a termination indemnity corresponding to two years of commissions.
Under its decision of 18 May 2010 as discussed here, the Suprem Court (Cour de cassation) approved the solution adopted by the Court of Appeal of Montpellier, and so very clearly.
In conclusion, through this decision, the Suprem Court hereby confirms its previous rulings rejecting the contractual provisions fixing in advance the way of assessing the termination indemnity of the commercial agent agreement, unless these provisions result more favorably for the agent than the usages.
AUMANS AVOCATS, formerly FOUSSAT Avocats & DEROULEZ Avocats, Paris Lyon Marseille Brussels
tags: termination compensation
