Upon the termination of a commercial agency relationship the agent can be due compensation. The amount of compensation payable is calculated as an amount equivalent to the value of the agency business at the time it was terminated based on what a third party might reasonably be expected to pay at the point of termination.

As with any business valuation there can be a number of factors to consider in quantifying the compensation due on termination of a commercial agency. In an agency business, the situation is often complicated by the existence of multiple agencies and the sharing of common resources including both overheads and the individual(s) acting as the agent. We take a pragmatic approach to apportioning such costs in order to prepare a robust quantification of the compensation due on a cost effective basis.

We have quantified the compensation due following a commercial agency termination on behalf of both agents and companies contracting with agents. We have assisted agents to quantify the compensation to which they are entitled and those using agents to assess the reasonableness of compensation claims and challenge unjustified or inflated claims.

Case examples:

Quantification of compensation on termination of agency – academic study guides

Acting on behalf of the claimant to quantify the compensation due on termination of a commercial agency relationship relating to the sale of academic study guides. The calculations were complicated by the fact that the market for the products being sold had recently undergone a significant change due to the introduction of new examination structures in private schools.

Quantification of compensation on termination of agency – interior decoration

Acting on behalf of the defendant to review a claim for compensation due on termination of a commercial agency made by an agent dealing in the interior decoration marketplace. We considered the assumptions made in respect of the claim, in particular in relation to the apportionment of costs between different agency agreements, to help the defendant understand the reasonable quantification of compensation due.

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