A commercial agent received a monthly fixed fee/bonus linked to at least 5 years of work and the achievement of certain targets. After 3½ years, he wanted to terminate the contract and was then confronted with a reclaim.
The contractual provisions
A commercial agent for rental contracts for printers received a turnover-based commission. Furthermore, he was entitled to an additional total bonus of € 90,000 if he worked for the supplier for at least 5 years and achieved certain sales targets. This bonus was to be paid in 30 monthly instalments of € 3,000 each. If the contract was cancelled before the end of 5 years on his initiative or because the targets were not met, he would have to repay all the amounts received.
He did not achieve the sales targets. It was then agreed that from November 2018, the fixed bonus would amount to 50% of the monthly commission earned if the commission amounts to at least € 3,500. The other obligations, in particular the 5-year term, remained in place.
Cancellation by the agent
In November 2020, the agent wanted to change his job. He wrote that he wanted to terminate the contract and asked to refrain from the notice period. The company informed him that it was taking note of his cancellation and pointed out the notice period. The sales agent did not answer (and ceased his activities).
The supplier then demanded a refund of all the amounts he had paid as a fixed bonus. This amounted to € 79,000 minus € 12,000 open commission claims, i.e. around € 67,000.
Argumentation of the agent
The agent argued that the fixed fee was a remuneration component and could not be reclaimed. The repayment agreement was immoral, as it impaired his freedom to terminate. He would have to expect repayment of these amounts in the event of termination which could prevent him from doing so. In addition, he had not given notice of termination, but only stated that he would/will terminate the contract.
Decision of the courts
Both the court of first instance and the court of appeal ruled against the commercial agent. He had to repay the amounts received as a fixed bonus.
The agent had not only made an enquiry, but had clearly stated that he was cancelling the contract. He had also used the word “cancellation” in the subject line of his letter. The court of first instance stated that he wanted to terminate the contract in any case; he also started working for a competitor immediately afterwards.
Immorality denied
The Court of Appeal stated that it was not a matter of reclaiming commission amounts that had already been incurred. Such a reclaim would be immoral if it had been linked to a specific cut-off date or contract term. However, this was not the case here. Rather, the fixed bonus represented the consideration for 5 years of work. This was initially not linked to the commission at all, and from the agreement of November 2018 only in terms of the amount. There was no connection with the conclusion of a transaction. The bonus as such was only dependent on compliance with the contract term.
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A clarification by the Supreme Court would have been interesting (the agent did not file such a revision). It is at least doubtful that the “bonus” was only linked to the commission in terms of “amount”. The commission, which was dependent on the turnover, had to reach a minimum threshold for this purpose. As a result, the bonus was indeed dependent on a certain volume of business. The reasons given by the Court of Appeal as to why the provision should not be invalid were therefore, on closer inspection, not given.
Gustav Breiter, IDI Country Expert for agency & distribution in Austria
