Is there an authorized dealer claim for compensation without the authorized dealer having to have been contractually obliged to transfer his customer base? The Nuremberg Regional Court surprised with a published ruling on November 27, 2018 and indicates that the only thing that matters is whether the entrepreneur has benefited from the business relationship with the authorized dealer.
According to the case law of the BGH, an authorized dealer, like a commercial agent, has a claim to compensation. The authorized dealer must be obliged to transfer his customer base to the entrepreneur at the end of the contract. It is also a prerequisite that the authorized dealer is integrated into the entrepreneur's sales organization. He is required to follow marketing instructions, report regularly and be subject to a non-compete clause.
dr Christian Andrelang, LL.M.
Specialist lawyer for international business law
Specialist lawyer for commercial and corporate law
Authorized dealer compensation claim – what is it about?
According to Section 89b of the German Commercial Code (HGB), the commercial agent is entitled to a claim for compensation against the entrepreneur after the termination of the contract, provided that the entrepreneur has significant advantages from the business relationship with new customers that the commercial agent has recruited even after the termination of the contractual relationship and the payment of compensation takes into account all circumstances, in particular the commission lost by the commercial agent from transactions with these customers, which corresponds to equity.
According to case law, this applies accordingly to the authorized dealer's claim to compensation. For this to happen, two requirements must be met. Firstly, it is necessary that the authorized dealer is integrated into the entrepreneur's sales organization, comparable to a commercial agent, and that their contractual relationship goes beyond a mere buyer-seller relationship. This is particularly the case if the authorized dealer had reporting and marketing obligations, was subject to a non-competition clause or was assigned a specific market area of responsibility. Secondly, the authorized dealer had to have been contractually obliged to make its customer base accessible to the entrepreneur in such a way that the entrepreneur could easily benefit from it after the contractual cooperation had ended.
Authorized dealer compensation claim – what’s new?
The Nuremberg-Fürth regional court has qualified this second requirement. For the authorized dealer to be entitled to compensation, it still requires that the entrepreneur derive benefits from the business relationship with the authorized dealer. However, it is no longer necessary for the authorized dealer to somehow transfer his customer base or provide customer data. The requirements for the authorized dealer to claim compensation are therefore reduced, which is favorable for the authorized dealer.
The Nuremberg-Fürth Regional Court rightly states that case law once required this obligation to transfer the customer base as a prerequisite for the authorized dealer's claim to compensation. However, the case law on this requirement has been put into perspective to date. For such an obligation to transfer the customer base, it should be sufficient if the entrepreneur requested the handing over of warranty cards or the location of rental equipment from customers, for example for product presentation.
Furthermore, it has always been sufficient that this obligation only somehow resulted from the contractual regulations; it did not have to be explicitly stated. Longer toleration or acceptance of customer data could also be a “contractual obligation” in this sense. Likewise, it was irrelevant for the authorized dealer's claim for compensation whether the authorized dealer contract was valid or voidable or even void. What is new is that, according to the Nuremberg-Fürth Regional Court, all that matters is that the entrepreneur has goodwill, i.e. a justified expectation of profit, from the business relationships with the customers that the authorized dealer has recruited. How the entrepreneur gains access to the goodwill after termination of the contract - i.e. whether he obtains the customer data himself or he receives it from the authorized dealer or a third party - does not play any role for the authorized dealer's claim to compensation.
Only entrepreneurial advantage required – what does that mean?
For his authorized dealer claim for compensation, the dealer only has to prove that he was integrated into the entrepreneur's sales organization like a sales representative and that the entrepreneur still has advantages from the authorized dealer's customer base. By eliminating this requirement, constellations of an authorized dealer's claim for compensation now become more tangible in which the entrepreneur has received the advantages from the customer base "just like that", for example because he took over the authorized dealer's business and continues to run it as his own business. However, the Nuremberg-Fürth Regional Court did not change the calculation of the authorized dealer's compensation claim in its decision. The challenges in calculation, especially in the automotive sector, therefore remain.
Authorized dealer compensation claim – what is important to you now?
The fact that the Nuremberg-Fürth regional court completely waives the requirement for the authorized dealer's claim for compensation to be a "contractual obligation to transfer the customer base", as the previous case law - albeit weakened - always required, may still concern the next instance, the Nuremberg Higher Regional Court. It remains to be seen whether the Nuremberg Higher Regional Court will confirm this opinion regarding the authorized dealer's claim to compensation and its requirements. In any case, the prerequisites for a dealer claim for compensation will likely continue to concern the courts.