Is the agent entitled to goodwill indemnity in the event of termination of the agency agreement?

In a termination of an agency agreement, the agent is in principle entitled to clientele compensation (also referred to as goodwill indemnity). This concerns compensation in the event the activities of the agent during the term of the agreement have led to an expansion of the customer base of the principal and the principal is likely to benefit from this expansion after the termination of the agreement.

However, the principal doesn’t owe the agent goodwill indemnity if:

  • No new transactions can be expected from the clients acquired by the agent
  • The agent himself terminates the agreement
  • The agent transfers the agreement to a third party