The recent Judgment of the Spanish Supreme Court of September 3rd, 2025 (EDJ 2025/696789) settles a key issue concerning the criteria for quantifying and limiting goodwill compensation following the termination of an agency contract. The case concerned the dispute which arose between an agent and Vodafone España, S.A.U. (hereinafter, “VODAFONE”), after their continuous commercial relationship of more than twenty years ended due to the unilateral imposition of new contractual conditions by VODAFONE.
Case Background:
The claimant (the agent), after rejecting the new economic conditions that VODAFONE (the defendant) sought to unilaterally impose unilaterally, filed a claim for goodwill compensation against VODAFONE under Article 28 of Law 12/1992, on Agency Contracts (hereinafter, the “Agency Law”). The parties had maintained commercial relations since 1996 under various agency agreements that were successively renewed.
The conflict arose when VODAFONE unilaterally modified the financial terms and proceeded to terminate the contract, which the claimant considered to give rise to a right to compensation. VODAFONE, in turn, argued that the termination was due to the agent’s unilateral refusal to accept the new conditions, thus denying any entitlement to compensation. The claimant maintained that her activity had significantly contributed to attracting and consolidating a client base from which VODAFONE would continue to benefit after the termination of the contractual relationship.
In the judicial proceedings, both the court of first instance and the Court of Appeal recognized the agent’s right to obtain compensation, but applied significant reductions to the legally established maximum amount. The lower court set the compensation at 60% of the calculated amount, while the Provincial Court was more lenient, reducing it by 40% from the legal maximum.
This reduction was based on equitable assessment that took into account several factors, including:
- The 21-year duration of the contractual relationship.
- The advertising and marketing activities carried out by Vodafone.
- The prestige and brand image of Vodafone.
The Supreme Court’s Judgment:
The central issue on appeal concerned whether such a reduction of the legally permitted maximum compensation amount was lawful. The Supreme Court, citing previous judgments such as STS 582/2010, of October 8th, among others, reaffirmed the mandatory nature of Article 28.3 of the Agency Law and of its European source: Directive 86/653/EEC.
In the Supreme Court’s words:
“any clause that, in advance, prevents the obtention of the legally established maximum compensation upon termination of the contract is void,” since “the particular importance of this right to goodwill compensation as a manifestation of the ‘level of protection of commercial agents in their relations with their principals’ is confirmed in Article 19 of the Directive.”
Therefore, the Supreme Court reiterated that goodwill compensation can only be subject to legal reduction due to the existence of a maximum limit: the average annual remuneration received by the agent during the last five years, or during the term of the contract where this is shorter (Article 28.3 of the Agency Law; Article 17.2(b)) to the term indicated in the Directive; see also STS 528/2020, of October 14th.
In accordance with this, any agreement or contractual clause that seeks to limit or reduce this amount below the legally established maximum is invalid due to the mandatory nature of the rule. Neither the principal may impose, nor the courts may apply any “equitable moderation” or discounts based on factors such as brand notoriety or advertising activities carried out by the principal.
The Court explicitly reaffirmed existing case law, stating:
“The prohibition therefore extends to any prior agreement that limits the agent’s right, once the contract has ended and in case of conflict with the principal, to obtain compensation up to the amount provided for in Article 28 of the Agency Law” (STS 582/2010, of October 8).
Thus, it confirmed the principle that goodwill compensation cannot be reduced by contractual agreements nor by subsequent judicial moderation as these are both contrary to the mandatory nature of the compensation regime established by the Directive and by the Agency Law (Articles 3.1 and 28 LCA).
The Decision of the Chamber:
Consequently, the Chamber set the amount for goodwill compensation at the average annual remuneration received by the agent during the last five years of activity, plus the corresponding statutory interest.
To sum it up, this decision confirms the established doctrine requiring the strict application of the legal limit and the non-waivable and mandatory nature of the right to goodwill compensation, declaring void said contractual clauses and inadmissible any judicial interpretations that enforce them.
Vilá Abogados
Kengo Matsuoka
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October 24th, 2025
