Terminating a mandate contract: expenses, remuneration and damage

The party commissioning the mandate may terminate it at any time. The party accepting the mandate has the same right. However, the right to terminate must be distinguished from obligations relating to settlement and liability for damage.

The rules below come from the “Termination of a mandate contract” section of the State Labour Inspectorate’s publication “Forms of employment and basic rights and obligations”.

When the commissioning party terminates the mandate

The commissioning party may terminate the mandate at any time, but must reimburse the accepting party for expenses incurred for the proper performance of the mandate. This concerns expenses incurred for that purpose, not any costs whatsoever.

Where the mandate is paid, there is also an obligation to pay the portion of remuneration corresponding to the accepting party’s activities performed so far.

If the commissioning party terminates a paid mandate without a valid reason, it must also compensate for damage. Reimbursement of expenses, payment of the appropriate portion of remuneration and compensation for damage are separate elements of this rule, each subject to its applicable conditions.

When the accepting party terminates the mandate

The accepting party may also terminate the mandate at any time. However, that party is liable for damage when both conditions are met:

• the mandate is paid;
• termination occurs without a valid reason.

This article does not assess whether a particular situation constitutes a valid reason or calculate damage.

The right to terminate for valid reasons cannot be waived in advance

The right to terminate a mandate for valid reasons cannot be waived in advance. This is a prohibition on an advance waiver of that right, not an organizational recommendation.

Optional organization of information

As an optional organizational step, you can gather:

• the contract and the parties’ recorded arrangements;
• a summary of activities performed so far;
• a summary of expenses incurred, together with any documents you hold.

This is solely an organizational recommendation, not an additional legal obligation or a condition for termination. This checklist is not intended here to determine a notice period or calculate remuneration or damage.

Scope of the article

This text concerns only termination of a mandate contract. It does not discuss substitution of the accepting party—that is, entrusting performance of the mandate to another person—or the rules for terminating an employment contract. Nor is it a guide to terminating a contract with an accounting firm: it contains neither a template letter nor instructions for changing accountants.

The form of termination, effectiveness of delivery, determination of contractual notice periods, calculation of amounts due, disputes, limitation periods, and matters concerning ZUS, PIT and insurance entitlements are outside the scope. The article does not determine an individual case or guarantee its outcome.