Commercial Agent Liability

The starting point is that the commercial agent is in principle not liable to the principal for compliance with the obligations of the third party. However, the law offers parties a regulation they can use as the basis to deviate from this. In that context, the parties can agree on a different clause, also known as the del credere clause.

Del credere clause

The principal and the commercial agent may choose to extend the liability of the commercial agent. For example, they can agree that the commercial agent is jointly liable for the positive outcome of the agreement brokered or concluded by him. He/she may be able to stipulate additional commission against the risk entailed for the commercial agent. Whether a del credere clause can be agreed between the parties depends on the work activities of the commercial agent. The del credere clause is only possible in the event of active mediation by the commercial agent. The clause does not apply to agreements in which the agent has not mediated or to agreements that have not been concluded by the agent.

Benefits for the principal

The advantage of agreeing to a del credere clause is that it is an incentive for the commercial agent to enquire about the creditworthiness of the third party. The clause also prevents the agent from entering into agreements with insolvent third parties to increase his/her commission. It can also be beneficial for the principal. It can rid the principal of any doubts about whether to conclude an agreement with a third party.

Limitations

In order to protect the commercial agent however, the legislator has attached a number of restrictions to the del credere clause:

For example, the clause can only be agreed in writing between the parties.
The commercial agent is only liable for the solvency of the third party, unless agreed otherwise in writing.
The amount for which the commercial agent can be liable is limited to the amount of the agreed commission. A further liability of the commercial agent can only be agreed in a specific agreement or in the agreements the commercial agent himself concludes on behalf of the principal.
If there is a disparity between the stipulated commission and the risk for the commercial agent, the court has moderation power insofar as the amount for which the commercial agent is liable exceeds the commission.

The commercial agent must act with due care

Just as the principal has a duty of care, the commercial agent also has a duty of care. The commercial agent must first conduct an investigation into the financial situation of the third party. He/she is fully liable for any damages if he/she engages with third parties who are notoriously insolvent or whose poor financial status he/she should reasonably have been aware of.

Mitigation powers

The court must take into account all circumstances when exercising its power to moderate the amount for which the commercial agent is liable. In particular with the way in which the commercial agent has represented the interests of the principal. As stated, this power of moderation only concerns the amount that exceeds the commission. In addition, it is likely that the court may not moderate the amount to a lower amount than for which the commercial agent has covered his/her liability.

Mandatory clause

The parties cannot deviate from the legal clause that regulates the liability of the commercial agent. The clause is mandatory law. If the parties nevertheless deviate from this, the agreement is null and void. Nevertheless, it is likely that if the procedural requirement of writing is not complied with in accordance with the limitation first mentioned, this clause or the agreement is voidable instead of null and void.