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Wednesday, 23 July 2014

Commercial agency has a value, even if no-one wants to buy it

The Court of Appeal has upheld a High Court judgment in which a former commercial agent (within the meaning of the directive) was awarded compensation when, shortly after he retired, large orders had come in on which he would have been entitled to substantial commission. The rules about compensation and indemnity in the directive are rather tricky to work out, so the Court of Appeal's ruling that the lack of a willing buyer does not mean that the agency has no value is helpful: the Court referred to the fact that there is no tradition (as there is on the continent) of buying and selling agencies. The right measure of compensation was what a reasonable hypothetical purchaser would pay, even if no such person existed.

Warren v Drukkerij Flach B.V. [2014] EWCA Civ 993 (18 July 2014)

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