The goodwill indemnity (klantenvergoeding or goodwillvergoeding) is the payment a commercial agent (handelsagent) can claim when an agency agreement ends. Under Article 7:442 of the Dutch Civil Code, the agent is entitled to it if he brought in new customers or significantly increased business with existing ones, and the principal continues to benefit substantially from them.
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When is a commercial agent entitled to the indemnity?
Two conditions must be met. First, the agent brought the principal new customers or substantially expanded existing customer relationships, and the principal still derives substantial benefits from those customers. Second, payment must be equitable (billijk) in view of all circumstances, in particular the commission the agent loses on business with those customers.
How high is the goodwill indemnity?
The indemnity may not exceed one year’s remuneration, calculated on the average annual remuneration over the previous five years. If the agreement lasted less than five years, the average over the actual term is used. The maximum is a ceiling, not the standard amount. Courts usually first calculate the benefit and the lost commission, then test the result for fairness.
Is there a deadline for claiming it?
Yes. The agent loses the right to the indemnity if he has not notified the principal within one year after the agreement ended that he intends to claim it. The notification does not need to state an amount, but it should be in writing and provable.
When is there no right to an indemnity?
Article 7:443 Dutch Civil Code excludes the indemnity if the principal terminated the agreement for an urgent reason caused by the agent, or if the agent terminated it himself, unless this was justified by the principal’s conduct or by the agent’s age, illness or infirmity. It is also excluded when the agent, with the principal’s consent, transfers his rights and obligations to a third party. Before the agreement ends, the parties cannot deviate from these rules to the agent’s detriment (Article 7:445 Dutch Civil Code).
Frequently asked questions
Does the indemnity also apply to distributors?
Not by law. A distributor buys and resells for his own account and is not a commercial agent, although courts sometimes grant compensation on other grounds.
Can a foreign principal avoid the rule?
Not if the agent works within the EU. The rule implements the EU Commercial Agents Directive.
Related terms
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