Belgian legislator extends the protection of the commercial agent

Under Belgian law, the commercial agent was already legally protected against the unilateral modification of the commission by the principal. Such a unilateral change was considered an act of breaking the commercial agency contract. In the event of termination by the principal, the commercial agent is entitled to an indemnity and can immediately start working for a competitor of his (former) principal. The principal could thus increase the pressure on the commercial agent until he finally gave in and terminated the contract himself.

In the absence of legal regulation on the matter, principals had found a loophole and regularly resorted to unilaterally increasing the costs imposed on the commercial agent. The commercial agent often had to accept this, as it is common practice to include an exclusivity clause and a non-compete clause in the commercial agency contract. If the agent were to terminate the agreement himself, he would also lose the right to an indemnity.

Therefore, the Belgian legislator has now added a new paragraph 2 to article X. 13 Belgian Economic Code (by Act of 16 February 2022) which states as follows

"When concluding the commercial agency contract, the parties shall freely determine the costs to be borne by the agent.

Any unilateral substantial or structural increase or imposition of costs is an act equivalent to the termination of the agency contract. However, considering the circumstances, the court may take into account that if the commercial agent accepts increased costs or an imposition of costs without reservation over a relatively long period of time, he tacitly agrees to the change thus made."

With this provision, the Belgian legislator extended the protection already enjoyed by the commercial agent in the case of a unilateral change of commission to the unilateral change of the commercial agent's costs.