Is the travel agency entitled to a commission on travel packages that do not take place? Tour operator beware!

We have succeeded in an interesting lawsuit regarding commission on travel packages that didn't happen due to the bankruptcy of the organizing tour operator. At the end of 2021, we reported on this lawsuit to the participants of the ACK seminar "How to legally prepare a travel agency for travel in the COVID-19 era". We now have a final judgment in our hands; therefore, we know unequivocally that a travel agent is entitled to a commission even on travel packages that did not take place due to the organizer's bankruptcy. What does this judgment mean for tour operators?

Tour operators should check their agency agreements to determine whether, as in the present litigation, they contain commission clauses that only have a psychological effect, but which the court will disregard.

Travel agents should do the same. Moreover, it opens up the possibility for agencies to claim commission to which they are entitled, and which should have been paid but was not. Beware, however, of the statute of limitation and the timely filing of claims in insolvency proceedings.

In the present case represented by us, the court concluded that, in a commission agreement, the regulation of commercial representation contained in the Civil Code cannot be deviated from to the disadvantage of the commercial agent. Thus, when the Civil Code commands that: 'If it is clear that the transaction between the principal and the third party will not be fulfilled, the right to commission does not arise; this does not apply if the transaction is not fulfilled for reasons on the part of the principal', the commission contract cannot imply the opposite. The commission contract in the present issue implied the contrary, and the court therefore disregarded the relevant provision of the commission contract.

In the present dispute, the business - the package travel - did not take place because the tour operator went bankrupt. The aim was to convince the court that the bankruptcy of the tour operator is a reason on the part of the represented party, in which case the right to commission remains under the Civil Code. The case was further complicated in that the travel agency had a contract with a subsidiary of the tour operator. Despite this, we were able to persuade the court, with reference to the European Directive on commercial agents, existing CJEU decisions and German judgments, that: 'reasons on the part of the represented party include reasons in the debtor caused by the bankruptcy of a related party of the debtor in the UK'. Specifically, the court said: 'If the debtor undertook to arrange not only his own services but also those of related persons, in his own name and for his own account, he must have understood that he might be affected by the situation of those persons as a result. That conclusion is all the more significant in view of the fact that the bankruptcy of a person in the debtor's group, and therefore a person that to some extent shares management and financing, and therefore to some extent a common level of business risk with the debtor, has occurred.'