Commercial Agency in Morocco: Termination, Indemnity, and Risk Allocation
By Zakaria Korte, Korte Law in association with Amereller
In short: Moroccan commercial agency is governed by Articles 393–404 of the Code de Commerce (Law 15-95) and the DOC. Where the agent is established in Morocco, these agent-protective rules apply mandatorily — a foreign (e.g. German) choice-of-law clause cannot override them — and the agent generally has a right to a termination indemnity for lost goodwill and prejudice. German principals should note the model differs from the §89b HGB goodwill indemnity: it follows the French "compensation for prejudice" approach, without the same three-step test or statutory cap.
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.
Frequently Asked Questions
How is commercial agency regulated in Morocco?
Principally by Articles 393–404 of the Code de Commerce (Law 15-95, 1996), supplemented by the general Code des Obligations et Contrats (DOC). There is no separate commercial-agents statute or compulsory agents register; the commercial agent is a self-employed intermediary permanently entrusted with negotiating or concluding transactions in the principal's name and on its behalf.
Is a Moroccan agent entitled to an indemnity on termination?
Yes. On termination the agent generally has a right to an indemnity for the prejudice suffered — unless termination results from the agent's serious misconduct (faute grave) or an unjustified termination by the agent. Moroccan law merges "client indemnity" and damages into a single compensatory claim for lost goodwill, and the agent must notify the claim within one year of termination; following the French model, it is typically assessed on the agent's average annual commissions.
How much notice is required to terminate?
For indefinite-term contracts, notice of one month per year of duration, capped at three months. Fixed-term contracts end automatically at expiry, with early termination only for serious misconduct or under a resolutive clause. Moroccan courts also require that the right to terminate not be abused, even where the formal notice period is observed.
Can the parties choose foreign (German) law?
If the agent is established in Morocco, the agent-protective provisions of Moroccan law apply mandatorily and cannot be circumvented by a foreign choice-of-law clause — any contrary clause is null. Forum-selection and arbitration clauses remain permissible, and Morocco enforces foreign arbitral awards under the New York Convention.
How does it compare to the German §89b HGB indemnity?
The German §89b HGB indemnity is a "goodwill" claim (Ausgleichsanspruch): it requires proof of continuing benefit to the principal, must be equitable, and is capped at the average annual commission over the last five years. The Moroccan system, inspired by French law, follows a broader "compensation for prejudice" approach merging goodwill and damages into one claim, without the same three-step test or statutory cap — and in practice can reach roughly two years' commissions.
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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.