The Supreme Court Allows Compensation For Clientele To Be Excluded From Dealership Contracts

23 April 2009

A recent case which pitted Renault España against one of its dealerships has culminated in Supreme Court ruling 28/2009 dated January 21, 2009 which specifies that clientele compensation, characteristic of agency contracts, does not necessarily have to be included in a dealer contract.

In this vein, the high court established that in order for said compensation to be included in the dealer contract, the effective contribution of clientele and potential usefulness of same to the grantee must be proven.

If we examine the dealer’s burden of proof in the automotive sector more closely, as is the case at hand, we arrive at the general conclusion that it would be very difficult for the dealer to prove the “effective” increase in clientele for the licensing company, since, most likely, it is the reputation of the licensing automaker/company itself that determines whether or not the consumer decides to purchase a car of this specific make in the dealership where the sale takes place.

The Supreme Court likewise upheld that, unlike an agency agreement where compensation for clientele is imperative, contractual clauses in dealer contracts which exclude any compensation for clientele to the dealer in the event of unilateral termination by the grantor are valid.

Lastly, it is worth mentioning that compensation can only be claimed in those cases where the unilateral termination of the dealer contract results in unjustified damages to the dealer and/or unfair enrichment to the grantor pursuant Art. 1101 of the Civil Code.

For further information, please contact Sabina Llauger Boix: