Equalization Demand of the Agent and Its Importance in Business Law

Abstract

One of the most important consequences of the agency contract (commercial agency contract) in terms of its termination is the equalization demand of the agent. After termination of agency contract, the agent may request a reasonable equalization demand if he/she has brought the principal new customers or has significantly increased the volume of business with existing customers. Thus, the principal continues to derive substantial benefits from the business with these customers. Equalization demand of the agent (commercial agent) is regulated on an equitable basis. As of this nature, equalization demand of the agent carries a counter-execution nature for the customer portfolio (goodwill) which the agent acquired and the principal may benefit on its own, depending on the termination of the agency contract that establishes continuing obligation. In this respect, the equalization demand does not have the characteristics of compensation theoretically. However, compared to similar provisions, Turkish Commercial Code Article 122 has some differences and it may also need to be amended to clarify some issues. Objectives of this study are to determine the legal nature, conditions, and calculation of the equalization demand. Furthermore, scope of application of this claim includes other contractual relations giving similar monopoly rights unless it is contrary with fairness.