Compensation after termination of commercial agency agreement

Case no. 238/2017
Judgment delivered on 21 June 2018

Tower-Crane Europe/Schepers Kranen
vs.
Krøll Cranes A/S

On 3 June 2014, Krøll Cranes A/S (the principal) and Tower-Crane Europe/Schepers Kranen (the commercial agent) concluded a commercial agency agreement. The agreement had a term of two years from 1 January 2014 and was then subject to renegotiation. The agreement was based on Krøll Cranes A/S’s standard contract. By letter of 31 October 2014, Krøll Cranes A/S terminated the commercial agency agreement for expiry on 31 January 2015. Tower-Crane Europe/Schepers Kranen made a claim for compensation for expenses incurred and loss of income in respect of a terminated commercial agency agreement with another company and compensation for wrongful termination.

Considering the text of the agreement and the nature and duration of the contractual relationship, the Supreme Court held that the agreement was limited to the agreed period of two years. It noted that the Danish Commercial Agents Act does not preclude that a principal grants a commercial agent non-terminability during the term of the agreement or for parts of it, and that this applies regardless of whether the agreement is limited in time or not. As a result, the Supreme Court ruled that Krøll Cranes A/S had not been entitled to terminate the agreement to expire on 31 December 2015, and that Krøll Cranes A/S had thus breached the agreement, thereby acting in a manner that gave rise to liability towards Tower-Crane Europe/Schepers Kranen.

The Supreme Court considered that part of the expenditure incurred was not or was not fully attributable to the agency for Krøll Cranes A/S. The compensation to Tower-Crane Europe/Schepers Kranen to cover expenditure incurred was therefore assessed at EUR 15,000. There was no basis for awarding compensation for loss of income related to the terminated commercial agency agreement. The Court was also not satisfied that Tower-Crane Europe/Schepers Kranen had suffered a loss beyond what could be attributed to expenses incurred as a result of the wrongful termination of the agreement.

The High Court had reached a different conclusion.