Portfolio Compensation And Balancing Request In Turkish Law

In accordance with Article 122 of the TCC,

  • If the contractual relationship arising out of the agency between the parties is terminated through termination, in order to request portfolio compensation it should be subject of just termination of agency or unjust termination of principal
  • The agent must bring new clients to the principal and they must provide significant benefits to principal after the contract expires.[/vc_column_text]
  • The agency must lose the right to pay if the agency relationship between them has been continued due to the works done with the customers that have been provided by the company or to be done in a short time. The existence of new customers that have been put into operation by the Agency and the fact that the contract will continue to be entitled to new customers due to new customers. The agency will lose this fee due to the termination of the contract. Therefore, despite the termination of the contract, if the payment has been made in a way for new customers, the agency will not be entitled to remuneration, the agency will not be able to allege the request for portfolio.
  • Considering the conditions of the concrete case, the payment of hereby compensation must be equitable. This conditions is defined to publicise the business and product and the take a market share with agency’s efforts by lawmakers. Due to being Product or business a well-known brand does not cause the agency’s efforts to be ignored and constitute an obstacle to the existence of equity.
  • Requested hereby compensation may not exceed from the average of the other costs and annual commission as a result of the activity of the last five years received by the agency. In addition, if the contractual relationship lasted less than five years, the average value will be taken as basis during the continuation of the activity.
  • The Agency must not have any defects in the termination of the contract. However, the parties may decide otherwise by contract.
  • It cannot be waived from Portfolio compensate in advance. In addition, the right to portfolio compensation should be demanded within 1 year after the termination of the contractual relationship.
  • When applicable to equity, in cases of termination of permanent debt relations as dealership, franchising and distributorship which gives the right to monopoly, it is possible to request portfolio compensation in accordance with the explicit provision of the law.

With the verdict of The 11th Civil Chamber of the Supreme Court of Appeals Dated July 20, 1996 and docked no 1996/2084, decree no 1996/4544 has ruled that originating of compensation right of party who has no fault in the termination of the agency agreement and deserving of premium right due to insurance contract which is signed on in his term and continuing still. As to the mentioned verdict, Extension of the insurance contract with the addendum is not a new contract, is an adaptation of the present contract to the conditions of the day. While the Court of Cassation has made this decision in the event of unfair termination by the client of the agency relationship, has pointed out that it is a matter of fairness to grant an appropriate compensation in favor of the agency and fill the law gap in accordance with article 1 of Turkish Civil Code

In addition, in case of the Commissioner clearly express being of warrants or liable, delkredere responsibility predicted to being responsible of other debts or payments of the person whom they are treated. In this sense, it is possible that the agency will be liable for the execution of the debts of the customers. Being a guarantor of the agency to perform the debts of third parties is called delkredere responsibility. In this possibility, in accordance with Article 3 of the Turkish Obligations Law 421/2, the agency has the right to charge a separate fee