Norway: “commercial agent” definition and goodwill indemnity

Marcello Mantelli
Avvocato in Milan and Turin

The Norwegian Court of Appeal intervened in a dispute relating to commercial agency, clarifying that a subject is an “agent” and, under certain conditions, is entitled to a goodwill indemnity only if he procures and receives orders from customers and send them to the principal.

Specifically, the case concerns an agency relationship under which the agent company – which followed grocery stores and supermarkets – promoted the sales of the principal company’s products to those stores, receiving commissions on all purchases made by supermarkets.

However, given that in Norway supermarkets belong to three chains with their own wholesale organizations, all orders placed by local supermarkets were generated and sent directly to the wholesale organization, which was responsible for sending this order to the principal, without the agent company following customer orders in any way.

For this reason, when at the end of the relationship the agent company requested the goodwill indemnity, both the Court of First Instance and the Court of Appeal did not recognize this request, clarifying that the goodwill indemnity is due, under certain conditions, only to subjects that can be classified as “commercial agents“.

According to the aforementioned Courts this was not the case, as, under the Norwegian Law on the commercial agency, the agent is a person who undertakes, in agreement with the principal, an activity aimed at “negotiating, on an independent and ongoing basis, the sale or purchase of goods on behalf of the principal, procuring orders or concluding transactions in the principal’s name“.

In other words, therefore, according to the Court of Appeal, in order to qualify the company as a “commercial agent“, during the contractual relationship with the principal, it should have procured and received orders from local supermarkets and transmitted them to the principal.

The question is whether the obligation to “procure and receive orders” as interpreted by the Court of Appeal is compatible with Directive 86/653/EEC on the commercial agency (implemented by Norway), which does not refer to this obligation, but provides for the general duty of the agent to “negotiate the sale or purchase of goods in the name and on behalf of the principal“.

A similar case was otherwise resolved by the EU Court of Justice (C-828/18 – Trendsetteuse), which stated that the agent should not be required to procure and receive orders by actively negotiating on price and commercial conditions of a contract so that this is classified as a “commercial agent“.

Following the interpretation of the Court of Justice, it will be easier for subjects who act as intermediaries on commission to be recognized the status of commercial agent referred to in Directive 86/653/EEC, with potential right to goodwill indemnity if there are the conditions set out in article 17 of the Directive.

It remains to be seen how the Norwegian Supreme Court – consulted on the case – will settle the dispute, possibly being able to apply to the EFTA Court (EEA equivalent of the European Court of Justice) to request a definitive interpretation of the definition of commercial agent.

#commercialagency #commercialagent #commercialagencyNorway #goodwillindemnity #commercialcontracts #commercialdispute

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Dear Aurelia, the information you have provided are not sufficient for an answer which is subject to a professional engagement. In any case, we should study the provisions of the contract and identify governing law of the contract.If it does not provide anything on governing law then conflict law shall apply (in the most part of the countries likely the governing law will be the law of the country where the agent is domiciled). best regards Marcello Mantelli


I signed a contract with a fashion agency but there were no termination clauses in the contract and decided to withdraw it before one week after signature so sent them an email but after 14 days they sent me an email and asserted that because i didnt withdraw in legal deadlines i have to perform the contract and pay whole money.Noboday told me about any deadlines and nothing was in the contract!! Why did they claim such a thing?


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