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The termination of an agency agreement within the probationary period does not eliminate the rules on recovery and compensation.

June 5, 2018

According to the judgement of the High Court of Justice on the 19th of April 2018, the Directive 86/635/EEG will also be applicable when the agency agreement would be terminated within the agreed probationary period.

 

The case concerned an agreement between CMR and DTT, who acted as principal and who gave the assignment to CMR to sell 25 houses a year. The agreement started with a probationary period of 12 months.

 

 

Within the 12 months, the agency agreement was terminated, in disadvantage of CMR, who demanded therefore a compensation, in accordance with article 17 § 1 and 3 of the Directive.

 

The High Court of Justice expressed in the same sentence that the Directive is applicable from the moment that an agent has an agreement with his principal, irrespective of being in a probationary period. It is the purpose of the Directive to protect the agent in his relationship with the principal.

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