Agreement not properly terminated? Compensation!

A contract cannot simply be terminated. This was the experience of a DJ who wanted to end his relationship with his booking agency because he no longer felt comfortable with the company. He decided to terminate the contract with the booking agency with immediate effect by email. The booking agency disagrees and wants compensation for lost income. The booking agency also suspended all payments to the DJ. However, he wanted to receive his payments and took the agency to court. The DJ claimed payment of a sum of money he was still owed, as well as access to and transfer of the domain name of a website that corresponds to his stage name.

Nature of the agreement

The parties disagree on the nature of the agreement and, therefore, on which party is entitled to which payment. The court decides that an agency agreement is in force between the parties and not a cooperation agreement, as the DJ claims. After all, booking agreements were concluded for the DJ at a fixed percentage, which falls under the concept of agency.

Good reasons and statutory periods

An agency agreement is a legally designated agreement. If it is entered into for an indefinite period, the notice period is at least four months. Since the DJ did not observe this period, he is in principle liable for damages. The fact that he subsequently cites “good reasons” for the termination is too late and makes no difference.

Agency may suspend payments

The court did not rule on the amount of the sums claimed by both parties, but ruled that the booking agency was entitled to suspend its payment obligations to the DJ. However, the court did uphold the DJ’s claim for the transfer of the domain names, mainly on the grounds that this part of the dispute was separate from the financial disputes.

Importance of a good agreement

It is common to work together without fixed agreements. As a result, one party may assume that there is a partnership or contract for services, while the other party assumes that there is an agency agreement. The same thing happens at the corporate law level when a dispute arises afterwards about the termination of business activities, with one party claiming that it is a general partnership and the other party assuming that it is an employment relationship. Things also often go wrong with rental and labour issues. Failure to comply with regulations when terminating an agreement can have far-reaching consequences, as can misinterpreting the nature of an agreement.

The actual situation is decisive

Making, naming and recording agreements in advance often prevents problems. However, even if the parties record everything in their own words, the facts and circumstances still determine which legal regulations apply. The title and/or content of an agreement are subordinate to mandatory provisions, which determine which legislation applies to an agreement. It is therefore worthwhile to seek legal advice not only in conflict situations, but also in advance when entering into an agreement. This way, both parties know where they stand and how and under what conditions they can part ways, if there is reason to do so.

The solicitors at Fruytier can look at your actual situation. They will be happy to visit you for this purpose. Please contact us to make an appointment.