Remuneration is an essential element of an agency agreement and should generally be specified by the parties in the contract.
Does failing to specify remuneration therefore mean that there is no agency relationship?
❗ No. If an agent provides intermediation services on a continuing basis, they usually do so under an agency agreement, regardless of whether remuneration has been defined precisely.
Failure to agree it nevertheless creates a significant risk for the principal. The agent is then entitled to the remuneration customary for the type of intermediation services concerned. In a dispute, the court will determine the amount, usually with the assistance of an expert.
🔵 To reduce this risk, the agreement should specify precisely:
➡️ the remuneration amount for a fixed-fee model, or the exact calculation method for commission;
➡️ when remuneration falls due, clearly identifying any additional conditions;
➡️ whether the agreed remuneration covers the agent’s additional technical, administrative or organisational tasks;
➡️ commission on repeat business — sales by the principal of products of the same kind to customers acquired by the agent — or an express exclusion of entitlement to such remuneration.
Experience shows that carefully drafted remuneration rules help defend claims for payments not envisaged by the agreement, particularly commission on repeat business.
