After an agency agreement ends, the agent may claim an indemnity from the principal if the statutory conditions are met.
⚠️ This does not mean that an indemnity is payable in every case. Even where the conditions establishing entitlement are satisfied, circumstances excluding that entitlement may exist.
🚫 An agent is not entitled to an indemnity if:
➡️ the principal terminated the agreement because of circumstances for which the agent was responsible and which justified termination without notice;
➡️ the agent terminated the agreement, unless termination was justified by:
📌 circumstances attributable to the principal, such as an unjustified reduction in commission or delayed payment;
📌 the agent’s age, illness or disability, where equitable considerations mean that the agent cannot reasonably be expected to continue performing the agreement;
➡️ with the principal’s consent, the agent transferred the rights and obligations under the agency agreement to another person.
📌 Why does this matter to a business?
In practice, proving circumstances excluding entitlement to an indemnity can be easier than challenging the conditions establishing that entitlement. How the relationship ends and properly documenting the reasons for termination are therefore particularly important.
📌 Conclusion?
An indemnity dispute often focuses less on whether the agent acquired customers or increased business than on how, and at whose initiative, the relationship ended. The circumstances of termination may determine whether any indemnity is payable at all.
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