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The Ruling by the European Court of Justice - Essay Example

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Name: Institution: Course: Tutor: Date: The ruling by the European Court of Justice (now the Court of Justice of the European Union) in the case of Semen v Deutsche Tamoil GmbH (C-348/07) means that a Principal in the UK will never choose indemnity on the termination of a commercial agency…
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The Ruling by the European Court of Justice
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Download file to see previous pages Notably, the commercial law facet has equally been affected by relative implications. In this, the commercial agent gets in a business relationship with the principal. Both have distinctive roles to play and failure of one party has adverse legal implications. The legal impacts are apparent in scenarios such as Semen v Deutsche Tamoil GmbH (C-348/07)1. Undoubtedly, the ruling had direct influence on the decisions of both parties. Particularly, factors pertaining to indemnity and compensation are the most critical. It is in this regard that this paper provides an in depth evaluation of the decision of the principal regarding choice of indemnity upon termination of a commercial agency. This is done in light of the ruling of Semen v Deutsche Tamoil GmbH (C-348/07). To enhance coherence, the paper begins by reviewing the ruling of this case2. In this case, the agent needed to be paid an indemnity by the principal after the contractual relationship was terminated. The bone of contention between parties Blanc Canet v Europcar France [2005] ECC 34 and Smith v Reliance Water Controls Ltd [2003] EWCA Civ 1153; [2003] Eu LR 874 stems from the size of the indemnity that was supposed to be awarded3. In particular, it was not clear whether the methodologies employed in indemnity calculation were in line with the legal provisions4. The court as in Cooper and others v Pure Fishing (UK) Ltd [2004] EWCA 375 held that during the calculations of the indemnity to be awarded to the agent, there was dire need to factor in all the losses that the agent would encounter. Although these are wide and varied as established in Crane v Sky In-House Services Ltd [2007] EWHC 66, they are important in ensuring that justice is served and the respective indemnity is reflective of all the losses that the agent incurs5. This preposition is further supported by Claramoda Ltd v Zoomphase Ltd [2009] EWHC 2857 outcomes6. Undoubtedly, this ruling implies that the value of the indemnity would usually be higher than the expectations of the principal7. As defined in Duffen v Frabo SpA [2000] 1 Lloyds Rep 180, this is because the business relationships that the agent establishes with a host of parties are not only intricate but also numerous8. Also, this is well examined in Douglas King v T Tunnock Ltd [2000] SLT 744. Usually, these relationships seek to ease business operations as well as meet the fundamental goals of the business. In this respect, they aim at optimizing profits and enhancing sustainable growth. To attain this, the agents invest significant resources in terms of money and finances. Although worth appreciating according to Ingmar GB Ltd v Eaton Leonard Ltd [2001] EWHC 3; [2001] Eur LR 755 and Tony Vick v Vogle-Gapes Ltd [2006] EWHC 1579 is the intellectual resource that the agents employ in attaining relative goals9. For this reason, the agents would only be satisfied if all these efforts would be rewarded by the indemnity. Further, the ruling established that the principal would still benefit from the business relationships that were established by the commercial agent. Likewise, this was akin to the findings of Hacket v Advanced Medical Computer Systems Ltd [1999] CLC 160 case10. From an economic point of view, relative benefits would probably increase with time. This is because of the presumption that businesses would ...Download file to see next pagesRead More
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