When terminating a commercial agency agreement, you need to look separately at the notice period, outstanding commission, possible damages and the goodwill indemnity (klantenvergoeding). A commercial agent is not automatically entitled to one year’s commission, but a valid termination does not automatically rule out a goodwill indemnity either. The statutory conditions and the customer base built up are decisive.
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Written by Onur Arslan, attorney at Arslan Advocaten. Registered in the specialisation register of the Netherlands Bar for employment law and personal injury. Last updated: 17 September 2026.
For a commercial agent, termination can mean the loss of turnover built up over years. For the principal, the handover of customer contacts, pending orders and continuity of sales are at stake. A proper settlement makes clear which claims continue to exist and which restrictions still apply afterwards.
This article deals with agency under Dutch law. In international relationships, choice of law, jurisdiction and mandatory protection are important additional questions. A foreign contract title or the term “consultant” does not by itself determine which rules apply.
When is there a commercial agency agreement
Article 7:428 of the Dutch Civil Code concerns an agreement under which the commercial agent, for remuneration, negotiates the conclusion of agreements for the principal, possibly with authority to conclude them on the principal’s behalf, without being subordinate. The precise activities and arrangements are important.
A distributor usually buys for its own account and risk and resells. An agent generally negotiates contracts between the principal and the customer and receives commission. That distinction affects, among other things, termination and the goodwill indemnity.
An oral working relationship can also legally be agency. The absence of a signed agency contract does not automatically set aside the statutory rules. Gather invoices, commission statements, emails and evidence of the actual way of working in order to classify the relationship.
First determine how the agreement ends
An agreement may have been concluded for a fixed or an indefinite term. It may end by notice, by expiry, by mutual consent or by termination for an urgent reason. Each route has its own conditions and possible consequences.
A fixed-term contract does not automatically give a right to terminate early. If the parties continue working together after expiry, this may affect the legal classification and duration. Review the entire history, including previous renewals.
A letter offering a new agreement while at the same time “cancelling” the old one may be unclear. Distinguish between a negotiating proposal and an actual termination. The wording, context and the parties’ responses may later constitute important evidence.
Which notice period applies
Article 7:437 of the Dutch Civil Code contains rules on giving notice of termination of an agreement for an indefinite term and of certain agreements with a right of termination. If no period has been agreed, a period of four months applies in the relevant statutory situation, extended the longer the relationship has lasted.
The statutory standard period is extended by one month after three years and by two months after six years. If the parties do agree a period, statutory minimum limits apply that are linked to the duration of the agreement. The period for the principal may not be shorter than that for the agent.
Also check the date with effect from which notice may be given; the law in principle assumes the end of a calendar month, unless otherwise agreed. Have the exact end date calculated on the basis of the start date, duration, contract and receipt of the notice.
Irregular termination
Anyone who terminates without the required notice period or other necessary conditions may become liable for damages. The statutory agency rules contain specific provisions for this. A general termination clause must be read in the light of that protection.
Any compensation for irregular termination is something other than the goodwill indemnity. In addition, commission may still be owed for negotiation already carried out. Keep these items separate in your calculation.
If you receive notice that is too short, respond promptly and specifically. State which period you believe applies and which claims you maintain. Do not assume without assessment that continuing to work automatically means you have agreed to the incorrect end date.
Termination for an urgent reason
The agency rules contain special provisions on termination for an urgent reason. The reason and the way it is communicated without delay are important. An accusation added later does not automatically remedy an earlier ordinary notice of termination.
An urgent reason requires circumstances in which continuation cannot reasonably be demanded according to the applicable standard. Disappointing turnover or a difference of opinion is not automatically sufficient. Earlier warnings and the seriousness of the conduct may also be relevant.
Record facts and dates carefully. Seek advice immediately if you wish to terminate on this ground or are confronted with it. The choice may have consequences for damages, the goodwill indemnity and any non-compete clause.
Settling outstanding commission
Check on which agreements commission has been earned and when it becomes due. The law and the contract may give rights to commission on transactions concluded through your negotiation and, in certain cases, on transactions within an assigned territory or customer group.
Ask for a verifiable overview of orders, deliveries, invoices, cancellations and payments received. A total amount without underlying items makes it difficult to check whether everything has been included. Returns and non-payment by customers must also be processed according to the correct rules.
A principal cannot simply let all commission lapse because the relationship is ending. Conversely, not every quotation that was ever discussed automatically constitutes earned commission. Record the negotiating activities and their link with the eventual agreement.
Commission after the end of the relationship
Under certain conditions, the agent may be entitled to commission on transactions concluded only after the end. It may be relevant that the agreement is mainly attributable to earlier activities and is concluded within a reasonable period, or that the order was received before the end in accordance with the statutory rules.
Therefore, before the end date, draw up an overview of current leads, quotations and negotiations. List points of contact, customers involved and the status of each opportunity. This helps to assess the link with your efforts afterwards.
Record the handover of ongoing files without waiving commission rights you wish to retain. The position of a successor agent may also play a role. A clear settlement prevents the principal and agent from later having different expectations about the same transaction.
When is there a right to a goodwill indemnity
Article 7:442 of the Dutch Civil Code states, among other things, that the agent has brought in new customers or has significantly increased the volume of business with existing customers, and that those relationships still bring substantial benefits to the principal. In addition, payment of an indemnity must be equitable, having regard to all the circumstances and in particular the commission lost.
This is not an automatic payment for every year you have worked. You must show which customers or increases are attributable to your activities and which future benefits the principal retains. The durability of those relationships is also relevant.
A legally valid ordinary termination by the principal does not rule out a goodwill indemnity. The indemnity has a different function from damages for wrongful termination. Assess those claims separately.
The statutory maximum is not the standard outcome
The goodwill indemnity is capped at an amount equal to one year’s remuneration, calculated on the basis of the average over the last five years, or over the shorter duration of the agreement. That maximum is an upper limit, not an amount every agent receives as standard.
It must first be established whether the conditions have been met and which indemnity follows from the benefits and the equity assessment. Only then is the maximum applied. A calculation that merely states the annual commission misses important steps.
Make clear which remuneration has been included in the average and why. One-off payments, expense allowances and special arrangements may give rise to discussion. Make sure the legal basis and the financial calculation are consistent with each other.
Make your claim within one year
The law requires the agent to notify the principal no later than one year after the end that he intends to claim a goodwill indemnity. Make sure that notification is clear, in writing and demonstrably received. Do not wait until all figures or a final valuation are available.
This notification must be distinguished from other time limits for commission, damages or proceedings. One letter does not automatically preserve every conceivable claim. Draw up a separate overview of time limits for each item.
If the end date itself is disputed, act cautiously and do not rely solely on the date most favourable to you. A timely claim can be made subject to a reservation. Have the consequences assessed before the earliest possible time limit expires.
When may there be no goodwill indemnity
The law provides for exceptions, including certain terminations for an urgent reason attributable to the agent. The right may also be lacking when the agent terminates the agreement himself, subject to the statutory exceptions, for example in circumstances attributable to the principal or certain personal circumstances.
Furthermore, assigning the agency position to a third party with the principal’s consent may have consequences. The precise conditions must be examined. It is too simplistic to say that every termination by the agent always, or never, leads to a goodwill indemnity.
Therefore discuss the consequences before terminating yourself. An understandable wish to leave quickly may affect financial claims. Sometimes a negotiated termination with express arrangements on the indemnity and commission is more predictable.
Non-compete clause after the end
A non-compete clause in an agency relationship must meet statutory conditions. Relevant factors include the requirement of writing, the limited scope in terms of activities and territory or customer group, and a maximum duration. The statutory rules set a limit of two years after the end, but not every clause within that period is automatically valid or applicable.
The manner of termination may affect the principal’s ability to invoke the clause. In addition, a court may, in certain circumstances, limit it. Also have any associated penalty assessed separately.
Do not start new activities that clearly fall within the prohibition without advice. First examine the scope, the statutory conditions and any exemption or arrangement. A dispute about the goodwill indemnity does not automatically render the non-compete clause ineffective.
What records should the agent keep
Keep contracts, commission statements and turnover overviews per customer and per year. Record which customers were new, which existing relationships were expanded and which activities you carried out. Distinguish between your own acquisition and customers the principal was already serving independently.
Also gather data on repeat orders, the term of customer contracts and their expected continuation. Use lawfully available information and take confidentiality and personal data into account. The aim is to prove your claims, not to take all business information without authorisation.
If necessary settlement data is missing, request it specifically. State which items you wish to check and which contractual or statutory right to information is relevant. A principal may equally have an interest in a clear list of the customers and transactions put forward by the agent.
Example of a claim for a goodwill indemnity
Subject: termination of agency and goodwill indemnity
Further to the termination of our agency agreement with effect from [date], we hereby expressly notify you that we claim a goodwill indemnity under Article 7:442 of the Dutch Civil Code, to the extent that the statutory conditions have been met. During our relationship we have, among other things, brought in or achieved [customers or specific increases].
We request that you provide the data needed for the settlement, including [commission statements, turnover per relevant customer and pending orders]. The amount of the indemnity will be further substantiated after assessment of this information. This notification does not constitute a waiver of outstanding commission or any other claims.
We also reserve our position on the correct end date and notice period. We would appreciate confirmation of receipt and a proposal for settling pending transactions, data and other obligations.
Ensure you have proof of timely receipt. A conditional reference to statutory requirements does not replace later substantiation, but the claim itself must be clearly communicated. Also keep track of any other time limits.
Fictional example of an incomplete settlement
A commercial agent has worked for a manufacturer for six years. The manufacturer terminates the relationship and offers to pay only the last month’s commission. The agent has brought in new customers who reorder every year, and several large quotations are still pending.
The assessment then covers several elements: the correct notice period, commission already earned, possible commission on later transactions and the goodwill indemnity. The agent makes a timely claim and gathers customer and turnover data. The statutory maximum only becomes relevant after the conditions and the calculation have been examined.
A settlement may deal with all these items together, but must make them sufficiently transparent. Otherwise there is a risk that a signature under a “final settlement” unintentionally also gives up another valuable claim.
Draw up a complete termination arrangement
Record the end date, activities until that date, commission, goodwill indemnity, any damages and the provision of information. State how pending orders will be followed up and when a supplementary settlement will take place. Agree on the return of materials and the ending of access.
Check competition, confidentiality, customer communication and final discharge. A general discharge without insight into the commission data may come too early. Also have the tax and VAT treatment of the various payments checked.
Through business law for entrepreneurs you can have a termination or a proposed final settlement assessed. Send the entire contract history and the commission and customer overviews. This enables the separate claims and time limits to be established.
Keep the final settlement as a separate file
For each item, record whether it concerns ordinary commission, commission on later orders, the goodwill indemnity or damages for the termination. State the amount, the calculation period, the payment term and any information still missing. A single total amount may later cause confusion about what has actually been bought off.
Agree how new data will be processed when pending orders become final only later. A supplementary settlement may be needed. In doing so, check whether final discharge has already been granted or takes effect only after the last payment. This keeps the arrangement workable without the parties having to treat every new order notification as a full dispute again.
Frequently asked questions
As an agent, am I always entitled to one year’s commission?
No. The amount of one year’s remuneration is a statutory maximum for the goodwill indemnity, not a standard outcome. The conditions, lasting benefits and equity must first be assessed. Outstanding commission is, moreover, a separate claim.
Does agency also apply without a written contract?
It can. The actual arrangements and activities help determine the classification. Emails, commission payments and the way customer contracts are concluded may provide evidence. Certain separate clauses are, however, subject to a requirement of writing.
Can I receive a goodwill indemnity after a valid termination?
Yes, that is possible if the statutory conditions are met and no exception applies. The goodwill indemnity is not solely a sanction for wrongful termination. Assess it separately from damages for a notice period that was too short.
How quickly must I make a claim?
For a goodwill indemnity, you must notify the principal no later than one year after the end that you are claiming it. Ensure timely receipt. Other claims may have different time limits and must be monitored separately.
Am I still entitled to commission on orders after the end date?
Under certain conditions, yes, for example where there is a sufficient link with earlier activities or orders were received in time. The statutory rules and the contract are decisive. Therefore draw up an overview of pending transactions and your involvement before you leave.
Can a principal prohibit competition for two years?
Two years is a statutory upper limit under the agency rules, but additional requirements and restrictions apply. The requirement of writing, the scope and the manner of termination are relevant. A clause within two years is not automatically valid or enforceable.
Further reading on this topic
- Terminating a cooperation agreement: what can you do if commitments are not honoured?
- Dissolving a general partnership (VOF): what can you do in a conflict with your partner?
Sources and legal basis
- Dutch Civil Code, Book 7: Articles 428–445, in particular 431–437, 439–443 and 445.
- Overijssel District Court on agency and the notice period.
- North Holland District Court on termination and the goodwill indemnity.
