Termination Of Commercial Agency Agreement

Termination Of Commercial Agency Agreement

One of the main issues that was highlighted in this important commercial agent case was the question of how to determine the applicable law in this commercial agent dispute, given that the agency contract/letter of appointment was signed before the entry into force of the Commercial Agents Act and in light of the amendment of the Commercial Agents Act by Law No. 13 of 2006. The letter of appointment was signed in 1969 and the UAE Agencies Act was passed in 1981, but was radically amended by Law No. 13 of 2006, which for the first time authorized dismissal from a temporary agency without the need to determine the reasons for the dismissal. In 1983, the parties amended the contract, with the effect of the text stipulating that the agency contract would be renewed and renewed automatically each year, unless the termination took place four months before the end of the year. Between May 2015 and January 2017, Economy Energy Trading Ltd & Ors (“EET”) commissioned Green Deal Marketing Southern Ltd (“Green Deal”) to visit households that have purchased their gas and electricity from major energy suppliers and encourage them to switch to EET. In January 2017, EET claimed that Green Deal had not met the agreed targets and that its field agents had made large-scale sales mistakes. As a result, EET suspended all sales of front doors by Green Deal and refused to determine when they were able to resume their functions. Green Deal considered that this was an infringement contradicted by EET to denounce the agreement and brought an action against EET for: there is no minimum period before an agent is entitled to a termination payment.

This means that a frequent change of agent can be expensive. The courts have confirmed that the regulations apply even to a trial or trial period. If the trial period is not successful, the agent may request a termination payment. Thorough diligence with a commercial agent before entering into an agreement is important. In order to assert a right to compensation at the end of an agency, the person must first prove that he or her company is indeed a “commercial agent”. In this case, the Supreme Court considered two important issues, on the one hand, the principle of freedom of contract and, on the other hand, the question of whether the application of Law 13 of 2006 would violate the general principle of retroactivity of laws. The Court held that Law 13 of 2006 applied by means of the appeal relating to the subject-matter of the appeal (the letter of denunciation was sent in 2008). .

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