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Commercial Agency Contracts under Dutch Caribbean Law

Under Dutch Caribbean law a commercial agency contract is defined as a contract whereby one party, the principal, instructs the other party, the commercial agent, and whereby the latter binds himself, for a fixed or indeterminate term and for remuneration, to act as an intermediary in the conclusion of contracts, and, as the case may be, to enter into such contracts in the same and for the account of the principal, without being his subordinate.

If the principal and agent have not chosen an applicable law and the commercial agent conducts the agency in the Dutch Caribbean, the courts in the Dutch Caribbean generally are inclined to apply Dutch Caribbean law. The courts furthermore are inclined to not apply a law chosen by the agent and the principal if that law has no real connection with the relationship between the parties or the agency contract at hand.

Dutch Caribbean law does not provide that an agency contract must be agreed upon in writing. Having said this, there are several reasons why a written contract is advisable. First, statutory law stipulates that each of the parties is obliged to provide the other party with a written statement, containing the current content of the agency contract, upon request of that other party. Moreover, arrangements deviating from certain statutory (mandatory) provisions need to be explicitly agreed upon, such as a del credere clause and a non-compete clause. Finally, from an evidential perspective, it is in the interest of both parties to agree upon the agency contract in writing.

An agency contract can be entered into for a fixed period or for an indefinite period. An agency contract for an indefinite period typically has an arrangement regarding termination. In most cases such provisions include a termination notice period. Under Dutch Caribbean law, the principal may be held to pay to the commercial agent a goodwill compensation upon termination. Termination of an agency contract can be effected immediately if there is urgent cause. However, if the Dutch Caribbean court finds that there was no such urgent cause, damages could be payable by the terminating party.