Commercial agent dies: secure the estate's compensation claim

When a self-employed commercial agent dies, the agency agreement ends through death. That does not automatically exclude a compensation claim under Section 24 HVertrG. The estate must examine whether the agent brought in new customers or substantially expanded existing business relationships, whether the principal can continue to derive substantial benefits from them and whether compensation is equitable.

The claim depends on these statutory requirements. The end of the agreement, an existing customer base or a general request for payment is not enough by itself. The principal must also be notified within one year after the agreement ends that the rights are being asserted.

This article addresses the death scenario under Section 24(2) HVertrG. It focuses on examining and preserving a possible claim for the estate. It does not discuss a general transfer of a commercial agency, distribution or franchise agreement. The business succession topic area explains the wider transfer framework.

Death ends the agreement, but not necessarily compensation

Section 24(2) HVertrG states that a compensation claim can exist even when the commercial agency ends through the agent's death. It refers to the requirements in subsection 1. Death therefore does not replace the review of the agent's contribution, the principal's continuing benefits or equity.

The estate should first secure the exact agreement. This includes the commercial agency agreement, amendments, commission arrangements, termination clauses and the last account statement. If the agent died while business relationships were continuing, the file should also show which contacts and transactions the agent built or expanded.

This differs from a planned transfer of an agreement to a successor. The article on customer and licence contracts in business succession explains the contractual context. This article concerns statutory compensation for sales work already performed before the agreement ended.

Prove new customers and substantial continuing benefits

Under Section 24(1)(1) HVertrG, the agent must have brought in new customers or substantially expanded existing business relationships. A general list of all company customers is therefore insufficient. The file must connect particular business relationships with the agent's work.

Depending on the sales model, useful records may include first-contact notes, visit reports, offers, CRM entries, email correspondence, concluded agreements and commission statements. The documents should show the sequence from first contact or expansion to conclusion and later business. A general increase in revenue without a link to the agent's work remains open to explanation.

The second stage concerns the principal's benefit after termination. Section 24(1)(2) HVertrG requires an expectation that the principal or its successor will continue to derive substantial benefits from the business relationships. The benefit need not already be fully realised. It should, however, be supported by the customer structure, continuing relationships and concrete indicators.

Review equity and exclusions separately

Section 24(1)(3) HVertrG also requires payment to be equitable after all circumstances are considered. The provision specifically refers to commissions the agent would lose from transactions with the relevant customers after termination. The review should therefore combine the commission model, customer quality, relationship duration, continuing use and the agent's actual contribution.

Death changes the practical evidence situation, but it does not remove the statutory test. The estate cannot ask the agent for further explanations. Statements from staff, customer contacts, CRM data and earlier account statements therefore become especially important.

The exclusions in Section 24(3) HVertrG must be read separately. They include, among other cases, termination or early dissolution by the agent, termination by the principal for serious fault and an agreement transferring the agent's contractual rights and duties to a third party. These cases should not be applied to death by analogy without checking the facts.

Protect the one-year notice period

Section 24(5) HVertrG provides that the agent loses the compensation claim if the principal is not notified within one year after the agreement ends that the rights are being asserted. In a death case the estate should make this period visible in its file. The exact starting point follows from the particular end of the agreement and the facts of the case.

The notice should clearly identify the claim under Section 24 HVertrG and reach the principal. The file should therefore contain the letter, address, delivery method and proof of receipt. An internal note or preparation of documents does not replace notice to the principal.

A short chronology helps: date of death, legally relevant end of the agreement, first contact, review of customer relationships, notice and the principal's response. Waiting for a complete calculation before sending the notice can consume unnecessary time.

Apply the ceiling and complete the estate file

Under Section 24(4) HVertrG, the compensation is capped at one annual remuneration unless a more favourable agreement exists. The relevant figure is the average of the last five years. If the agreement lasted less than five years, the average for the entire term applies. The ceiling does not answer whether compensation is due or what equitable amount follows from subsection 1.

The file should bring together the agreement, amendments, customer and revenue lists, commission statements, continuing business relationships, evidence of the sales contribution, the notice under subsection 5 and the principal's response. Each disputed amount should remain traceable to its source.

The article on severance and occupational pensions in a business transfer shows an important distinction. Those positions concern employment-related benefits in a transfer of business. Section 24 HVertrG concerns sales performance and the continuing value of customer relationships.

Four errors can jeopardise the claim

First, the claim is equated with the value of the entire customer base. Section 24 HVertrG requires a concrete sales contribution and an expected substantial benefit for the principal.

Second, the one-year period is considered only after the calculation is complete. The notice that rights are being asserted and the later quantification must be kept separate in the preparation.

Third, the average annual remuneration is confused with the equitable compensation. The annual remuneration is the statutory ceiling, not a substitute for the requirements under Section 24(1).

Fourth, death is confused with a transfer of the agreement to a successor. The article on succession in a medical practice addresses the continuation of a business and its own issues. Here the focus is preserving a possible claim from an agreement that ended through death.

Frequently asked questions about a commercial agent's death