Principal’s duty of care

The law stipulates that the principal must do everything necessary on his/her part in the given circumstances to enable the commercial agent to perform his/her work activities. This duty of care on the part of the principal is then further described in law.

For example, the principal must provide the commercial agent with the necessary documentation about the goods and services for which the commercial agent is mediating, as well as to provide him//her with all the necessary information to be able to execute the agency agreement. This means the principal must provide the commercial agent with, among other things, brochures, samples and rates with regard to the goods or services for which the commercial agent is mediating.

Warning obligation

The duty of care also includes a warning obligation for a drop in turnover. It follows from law that the principal must warn the commercial agent immediately if he/she foresees that agreements shall be concluded to a decidedly lesser extent than the commercial agent might expect. In this case, the principal must warn the commercial agent regardless of the cause of the drop in turnover. This means it does not matter whether that cause is external or comes from internal policy.

Immediately

Immediately means “without delay”. The legislator has opted for this because the commercial agent has an interest in receiving a timely warning of a decrease in turnover, while the principal has no reasonable interest that forces him//her to wait before warning the commercial agent.

Reasonable time

In addition, the principal must inform the commercial agent within a reasonable period of time whether he/she accepts, refuses or shall not execute the agreement made. Since the moment of his/her response can determine the moment in time the commission is due, the commercial agent has an interest in quickly knowing the time from which he/she can claim commission. This interest of the commercial agent must then be weighed up against the interest the principal has in being able to weigh up whether or not to accept and/or execute the agreement.

Mandatory clause

The clause in the law that contains the duty of care of the principal is a mandatory clause. This means the parties cannot deviate from this. If there is a deviation, such a deviating clause is null and void. With regard to the reasonable period, however, the legislator seems to be of the opinion that it can be shortened by the parties by stipulating that the information in question must be provided without delay. This means that also within the mandatory legal framework, the intentions of each party can be important in order to answer the question what constitutes a reasonable period in the specific case.