Today: February 19, 2018, 12:51 pm
Legal & Law

BGH: Post-contractual non-competition clause for commercial agent ineffective

In its ruling of December 3, 2015, the Bundesgerichtshof (Federal Court of Justice) invalidated a post-contractual non-competition clause in a commercial agency agreement (Az.: VII ZR 100/15).
GRP Rainer LLP
GRP Rainer LLP 2016-03-10 08:22:12
GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London conclude: Commercial agents often have post-contractual non-competition clauses in their contracts. These clauses are not always effective.

The BGH held in its ruling of December 3, 2015 that the following provision from a commercial agency agreement, formulated by the principal as a general business term, was ineffective because it violated the requirement for transparency: “The financial advisor undertakes for a period of two years after termination of the agency relationship to refrain from poaching or attempting to poach clients from the company” (Der Vermögensberater verpflichtet sich, es für die Dauer von zwei Jahren nach Beendigung des Handelsvertreterverhältnisses zu unterlassen, der Gesellschaft Kunden abzuwerben oder dies auch nur zu versuchen).

In the instant case, the company asserted claims against its former commercial agent, arguing that he had violated the post-contractual non-competition clause and poached clients. The commercial agency agreement stipulated, among other things, that the agent was not allowed to poach or attempt to poach clients for a period of two years after termination of the agreement. The contractual relationship came to an end in 2011. In the period of time between 2012 and 2013, the agent was said to have tried to poach clients. The company therefore sued for damages. However, the BGH dismissed this claim.

The Karlsruhe judges held that no effective post-contractual restraint on competition had been arranged, as the contractual provision in question was invalid due to its violation of the requirement for transparency. They went on to say that the non-competition clause was not worded clearly or precisely enough and not in sufficiently understandable terms. The economic disadvantages needed to have been clear from examining the contractual provisions. The issue of whether the post-contractual non-competition clause was ineffective for this reason was immaterial inasmuch as no compensation had been arranged for the period of non-competition, despite the fact that an obligation on the part of the company to pay the commercial agent reasonable compensation for the period of non-competition could be directly inferred from legislation.

It is equally important when preparing contracts for companies and commercial agents to pay attention to proper wording in order to avoid legal disputes at a later date. This also applies to post-contractual non-competition clauses. Lawyers who are competent in the field of commercial law can advise on drafting contracts. ..
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GRP Rainer LLP
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Herr Michael Rainer
Lawyer, Managing Partner

Published by
Michael Rainer

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