One of the key prerequisites for an indemnity claim is that the principal continues to derive substantial benefits from customers acquired by the agent during the term of the agency agreement or from customers with whom the agent significantly increased the volume of business.
⚠️ Case law suggests that this concept should be interpreted broadly. Consequently, the principal faces the risk that benefits will be deemed to include not only purely financial values, but also:
➡️ obtaining a stable customer base that generates revenue in the future,
➡️ the possibility of further offering subsequent products and services to this group of customers,
➡️ strengthening the principal’s market position,
➡️ creating prospects for further business development.
❗ At the same time, case law rejects the view that ‘substantial benefits’ must be of an extraordinary or exceptional nature.
It is emphasised that this does not refer to benefits higher than those usually achieved by the entrepreneur. This is of particular importance for large enterprises cooperating with many agents, for whom the activity of a single agent translates only marginally into the results of the entire network.
What is considered significant, however, is whether the customers acquired by the agent constitute a lasting value for the entrepreneur and whether the relationships with them can bring the entrepreneur measurable benefits even after the cooperation with the agent has ended.
⚠️ Courts recognise the evidentiary difficulties faced by former agents.
It is accepted that an agent should not be required to demonstrate the exact amount of benefits achieved by the entrepreneur, as they generally do not have access to the principal’s commercial documentation or financial data.
However, this does not exempt the agent from the obligation to demonstrate circumstances allowing the court to assume that the benefits actually exist. Evidentiary difficulties do not lead to the burden of proof being shifted to the entrepreneur.
📌 Conclusion
In case law, the concept of ‘substantial benefits’ is understood broadly. It encompasses not only the direct profit achieved after the termination of the agency agreement, but also the economic value resulting from leaving the entrepreneur with a permanent and stable clientele. At the same time, the courts emphasise that the number of acquired customers alone does not determine whether this prerequisite is met. The agent should demonstrate circumstances allowing for the assumption that the clientele continues to generate, or may generate, measurable economic benefits for the principal. It is the assessment of these circumstances that most often decides the outcome of a dispute regarding an indemnity.
