Article 28.1 of Spanish Act 12/1992 on the Agency Contract (LCA) grants a commercial agent who has brought in new customers, or significantly increased business with existing ones, the right to compensation where that activity “may continue to produce substantial benefits for the principal”. Article 28.3 LCA sets the ceiling: the annual average of remuneration over the last five years. Article 3.1 LCA makes those provisions mandatory, and the Supreme Court has held since 2010 that this rules out any judicial reduction of the resulting figure.
The Judgment 628/2026 of the Spanish Supreme Court of 22 April 2026 (ECLI:ES:TS:2026:1719) is not new case law (it is the fifth ruling in eight months restating the same doctrine). In an agency relationship lasting nineteen years, the first-instance court had cut the proven annual average (EUR 996,298.72) by 30%, relying on the principal’s brand image, the amount spent in advertising and the volatility of the affected market (mobile telephony). The Supreme Court rejects every one of those grounds, listing them expressly and shutting down the “equitable moderation” argument some defendants still run. The Judgement cites four other judgments on the same point since September 2025, three of them likewise against the same telecom operator (Vodafone).
Effects and risks for commercial networks
The real story is not the doctrine, settled for sixteen years, but that first-instance courts keep applying reductions the Supreme Court keeps striking down. For a principal terminating an agency relationship, that gap is a genuine risk: a favourable first-instance outcome may not survive appeal, so a litigation strategy built around securing a discount there is increasingly unreliable.
Two lines of defence remain, both evidential rather than discretionary. First, contesting whether the right arises at all under Article 28.1 LCA (no customer base was created, no future benefits will accrue, or the award is not equitable on statutory grounds). Second, invoking Article 30 LCA, which excludes compensation where termination is attributable to the agent provided the breaches relied on were clearly stated in the termination letter itself, since courts have separately shown they will police that requirement strictly.
This case law does not apply to distributorship relations. Applying Article 28 LCA by analogy to distribution contracts is not automatic): (i) the distributor must prove both the transfer of customers and the grantor’s continued use of them, (ii) the award is calculated on net profits rather than gross margin and (iii) unlike in agency, it may be excluded by agreement.
Conclusion
If your goodwill compensation strategy, whether you sit on the agent’s or the principal’s side of the table, still assumes a first-instance discount will hold, it is time to revisit it: on this point, appeal is not a risk to manage but an outcome to expect. We can review your agency contracts and termination files now, before a dispute forces the issue.
Article published by Callol, Coca & Associates
