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2.4. The bases and consequences of the termination of the brokerage contract by the right of Scotland

The regulations of 1993 fix the minimum term of the notice on intention to terminate the brokerage contract (notice of termination). The given requirement is applicable to both parties of the brokerage contract.

Both the agent, and the principal is obliged in the first year of action of the brokerage contract to direct the notice on intention to terminate the contract one month prior to cancellation, in the second year of action - two months prior to cancellation, after the second year of action - three months prior to расторжения.261

The regulations of 1993 fix the right of the agent to receive indemnification (compensation) or compensation of property losses (indemnity) [260 [261] [262] is important to pay attention, that terms "indemnification" and compensation of property losses have absolutely excellent value from established in the Scottish right. [263] the granted right has appeared one of most questions at issue within the limits of Regulations of 1993 that has led to the conflict of a case law of England and Scotland.

The brokerage contract parties cannot under the agreement exclude the right to indemnification or compensation of property losses. If in the contract it is not defined, what kind of payments is necessary to the agent indemnification should be paid, instead of compensation of property losses. [264]

The right of the commercial agent to indemnification or compensation of property losses can be lost in certain cases. In - the first if the brokerage contract has been terminated at the initiative of the principal on the basis of infringement or default of the contract by the agent (breach or default caused by frustration of contract). [265] Secondly if the brokerage contract has been terminated at the initiative of the agent, except for cancellation in case of breach of contract by the principal [266], and also in case of impossibility of the agent to continue to run business because of age, a physical condition or illness. [267] Thirdly if the commercial agent has transferred with the consent of the principal the rights and duties under the brokerage contract to other person. [268]

Indemnification is provided to pay to the commercial agent damages which it has incurred in connection with the termination of legal relations with the principal. The method of calculation of indemnification has appeared the extremely inconsistent. Till the end of the first decade of the XXI-st century the decision of the Scottish court on business King v T Tunnock Ltd [269 [270] was the precedent regulating calculation of indemnification. Now the given precedent contradicts the decision of the English House of Lords (Lonsdale v Howard and Hallam LtdG7 (0). Indemnification calculation remains a question at issue.

The internal chamber (the second instance of Sessional court of Scotland) in the decision at calculation of the sum of indemnification was guided by principles of the French right. Though positions about indemnification are based on the Instruction of EU concerning commercial agents of 1986, the given positions have been apprehended, and, hence, are interpreted, the British sources of regulation. However it is important to pay attention, that the Instruction of 1986 has borrowed the concept of indemnification from the French right.

[271] internal chamber referred to the practice of calculation of indemnification of the agent established in France proceeding from the average commission of the agent for two years. [272] in English judiciary practice such approach was repeatedly criticised. Almost in all English judgements to the agent much lower indemnification, than the average commission for two years was awarded. [273]

In the decision of one English precedent similar with specified Scottish precedent, it was explained, that the right to indemnification to the agent is based that at the moment of cancellation

The brokerage contract the agent as a matter of fact transfers back to the principal the company with all non-material elements (goodwill) which the agent helped to create. [274] It was specified, that the reason lays in distinction of market conditions in the Great Britain and France, namely, to France activity of agents can join in structure of non-material actives of trade enterprise at its sale, and in the Great Britain such practice does not exist. [275] besides, decrease in turns of business of the principal can affect level of indemnification to the agent. [276]

As the decision of the English House of Lords is obligatory both in territory of England, and on territories of Scotland, the approach to indemnification of the agent in Scottish pravoprimenitelnoj to practice should change.

The right of the commercial agent to compensation of property losses is directed on protection of results of its work which it has executed till the moment of the termination of action of the brokerage contract and which otherwise will get to the principal. [277] unlike indemnification, the sum of compensation of property losses is limited by the annual commission calculated on the basis or the average commission for last five years, or (if the agent has not worked five years) the average commission for five years on agency. [278] Pravoprimenitelnoj concerning calculation of the sum of compensation of property losses it is not enough practice. [279]

The brokerage contract can be ceased owing to the expiry of the term of the action [280], result achievement for which the contract has been concluded [281], and also at achievement of date or the event, not specified directly in the contract, but following of contract interpretation. [282] principal can decide to terminate the brokerage contract (revoke) [283] though such right can be excluded treaty provisions. [284] in case of cancellation of the contract at the initiative of the principal the agent has the right to certain payments. The agent also has a possibility of unilateral cancellation of the brokerage contract. If the agent has notified on it with delay or during the critical moment it is obliged to pay to the principal the incurred damages. [285] death of the agent or the principal also attracts brokerage contract cancellation.

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A source: Afanaseva Taisija Aleksandrovna. LEGAL REGULATION OF RELATIONS OF THE TRADING TURN In Scotland. The dissertation on competition of degree of the master of laws. Moscow, 2017. 2017

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