The protection of commercial parties: a comparison between the commercial agent, franchisee and other distributor with regards to the termination of the contract
PhD student: Mrs F.S.M. Ruitinga
Promotors: Prof H.N. Schelhaas, K.J.O. Jansen
Duration: 15/10/2022 - 14/10/2026
Freedom of Contract is a fundamental principle in contract law. Only rarely may it be infringed upon. In the past European and Dutch legislators deemed it necessary to protect certain categories of contracting parties that, they felt, were in a weaker position than their counterparts. For example, the employee, the tenant and (later) the consumer. During the most recent decades the freedom of contract is as well contained within the relation between businesses. For instance, the commercial agent enjoys protection against his principal on the basis of the Commercial Agents Directive of 1986. In addition, in the Netherlands, the franchisee, a contract party that is comparable to the commercial agent, enjoys protection against the franchisor since 2021 due to the implementation of the Dutch Franchise Act. The commercial agent and franchisee are protected parties because they are thought to be weaker and dependent on their counterparts. Criticism of the Dutch Franchise Act consisted for a large part in the argument that the need for legislation was missing; especially since all franchisees as a whole are protected by this act. The Directive which protects the commercial agent appears to be intended for the private individual that operates as an agent and therefore is similar to the employee; however today regularly large commercial parties like, among others, Phone House operate as an agent. Even assuming that protection of these commercial parties is justified, it is remarkable that the regulations are not more alike. Furthermore, it is conspicuous that other distributors which might find themselves in similar positions to the franchisee are not protected in a similar manner. Especially in the phase of the termination of the contract these differences are prominent due to the similarities between these three types of contracts and the importance for the party that might be entitled to such protection at this stage. In practice, for instance, Van Wechem and Bijloo regularly face issues regarding the termination (and qualification) of agency contracts. Furthermore, Houben describes the termination of the distribution contract as the most prominent issue; according to her the different judgements on the compensation of goodwill, the need for a ground to terminate the contract and the termination period would cause legal uncertainty. Therefore, De Mnnink advocated for regulation of the termination of distribution contracts already in 2009. At this moment the termination of the franchise contract, which mostly qualifies as a distribution contract, is (to some extent) regulated as is the termination of the agency contract but other distribution contracts are not. This leads to the following research question: To what extent is it justified to better align the (legal) protection of the commercial agent, franchisee and other distributor with regards to the termination of the contract, and if so, how can this be done? The (statutory) regulations of the three contracts have not recently been compared with each other. This study aims to overcome this gap with regards to the termination of the contract. The intention is to compare the definition of these three contracts in order to then consider the ways in which these contracts can be differentiated from each other, with the aim of providing some guidance on differentiation between these contracts. Furthermore, the objective is to gain a better understanding of what makes one contracting party entitled to (statutory) protection and another not, and whether under current law the right party is protected in the right manner. Therefore, this research is intended to explore whether the protection of the franchisee and commercial agent is at some points too far-reaching, but also whether the protection of these two parties can be more aligned. Lastly, it is intended to see whether some regulation for other distributors is justified (with regards to the termination of the contract).