Commercial Agency Morocco | Termination & Indemnity

By Zakaria Korte, Korte Law in association with Amereller

The Moroccan Commercial Agency Framework

Morocco's Code de Commerce (Articles 393–401) governs commercial agency relationships. These provisions establish a mandatory framework that protects commercial agents, including the right to an indemnity upon termination, restrictions on contractual exclusion of this indemnity, notice period requirements, and the agent's right to commission on transactions concluded during and after the agency.

These provisions are considered “lois de police” (overriding mandatory provisions) under Moroccan law, meaning they apply regardless of any foreign law chosen by the parties in their contract.

Mandatory Indemnity on Termination

The centerpiece of Moroccan agent protection is the mandatory termination indemnity. When a principal terminates an agency contract — unless the agent has committed a serious breach — the agent is entitled to compensation. This indemnity reflects the agent's contribution to building the principal's customer base and goodwill in the territory.

Unlike some jurisdictions where the indemnity can be waived in advance, Moroccan law does not permit prospective exclusion of this right. Any contractual clause purporting to waive the agent's indemnity rights in advance is unenforceable.

Comparison with the EU Commercial Agents Directive

The EU Commercial Agents Directive (86/653/EEC), implemented in all EU member states, provides similar protection through either an indemnity model (German approach, §89b HGB) or a compensation model (French approach). Morocco's framework closely follows the French compensation model.

Key differences: The EU Directive applies only within the EU/EEA; Morocco's Code de Commerce is independent legislation. German law (§92c HGB) allows derogation from §89b when the agent operates outside the EU/EEA — but this does not override mandatory Moroccan law. Under Art. 9 of the Rome I Regulation, Moroccan overriding mandatory provisions may apply even when the parties have chosen German or other EU law.

Risk Allocation in Drafting Agency Contracts

For principals, careful contract drafting can manage — though not eliminate — exposure:

Territory and scope: Define the territory, products, and exclusivity precisely.
Commission structure: Clearly define the commission base, rates, timing, and post-termination rights.
Performance metrics: Document KPIs and minimum performance thresholds.
Non-compete clauses: Post-termination non-competes must be reasonable in scope, duration, and geography.
Governing law and dispute resolution: Understand that mandatory Moroccan provisions will still apply regardless of law choice.
Documentation: Maintain contemporaneous records of agent performance and territory development.

Practical Tips for Principals

Do not assume that a German or other EU law choice eliminates Moroccan mandatory protections — it does not. Budget for termination indemnity from the outset. Engage local counsel before terminating an agency. Consider alternative structures (distribution, direct employment) where agency risk is unacceptable — but note that each alternative carries its own mandatory protections.

Conclusion

Commercial agency in Morocco offers an efficient market entry model, but comes with mandatory protections that principals cannot contract away. Understanding the indemnity framework, its interaction with choice-of-law clauses, and the practical steps for risk mitigation is essential.

Korte Law advises international companies on structuring, managing, and terminating commercial agency relationships in Morocco and across North Africa. Contact us in Rabat or Berlin to discuss your situation.

Commercial Agency in Morocco: Termination, Indemnity, and Risk Allocation