Many businesses assume that if a customer does not perform a contract, the agent is not entitled to commission.<\/p>\n
\ud83d\udc49 Not always.<\/p>\n
The Civil Code provides situations in which an agent retains remuneration despite non-performance by the customer, and others in which commission is not payable or must be repaid.<\/p>\n
The reasons for non-performance are crucial.<\/p>\n
An agent cannot claim commission, or must repay it, where it is clear that the contract will not be performed for reasons for which the principal is not responsible.<\/p>\n
For example:<\/p>\n
\ud83d\udd35 one party validly withdrew from the contract;<\/p>\n
\ud83d\udd35 the contract proved invalid;<\/p>\n
\ud83d\udd35 one party validly avoided the legal effects of their declaration of intent.<\/p>\n
\u26a0\ufe0f However, the principal must prove that non-performance is so certain that further performance cannot reasonably be expected. Merely suspecting that the customer will not perform, or a delay in performance alone, is insufficient.<\/p>\n
This is where the most important practical issue arises.<\/p>\n
Not every instance of non-performance by a customer releases the principal from paying commission.<\/p>\n
\u26a0\ufe0f The most common mistake?<\/p>\n
The principal assumes that, because the contract was not performed, the agent need not be paid.<\/p>\n
The agent nevertheless retains commission where the reason for non-performance falls within the business\u2019s normal operating risk.<\/p>\n
Examples include:<\/p>\n
\ud83d\udd35 the customer terminating the contract because of the principal\u2019s conduct;<\/p>\n
\ud83d\udd35 insufficient staff;<\/p>\n
\ud83d\udd35 poor organisation of work.<\/p>\n
The position differs for events outside the business\u2019s sphere of risk, such as:<\/p>\n
\ud83d\udd35 a natural disaster;<\/p>\n
\ud83d\udd35 a sudden, unforeseeable change in the law;<\/p>\n
\ud83d\udd35 an unforeseeable loss of the customer\u2019s financial liquidity.<\/p>\n
The principal may then withhold commission or seek repayment of commission already paid.<\/p>\n
Commission is then payable in proportion to the extent of performance.<\/p>\n
\ud83d\udc49 If it has not yet been paid, it should be reduced accordingly.<\/p>\n
\ud83d\udc49 If it has been paid in full, the agent should repay part of it.<\/p>\n
Typical examples include:<\/p>\n
\ud83d\udd35 failure to achieve the agreed transaction volume;<\/p>\n
\ud83d\udd35 early termination of a fixed-term contract.<\/p>\n
\ud83d\udccc Conclusion<\/strong><\/p>\n A customer\u2019s non-performance does not itself mean that the agent loses commission.<\/p>\n For the principal, the crucial questions are why non-performance occurred and who bears the associated risk.<\/p>\n \ud83d\udc49 In practice, a commission dispute often concerns the reasons why the whole transaction failed, rather than the agent\u2019s activities.<\/p>\n","protected":false},"excerpt":{"rendered":" Many businesses assume that if a customer does not perform a contract, the agent is not entitled to 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