Termination of commercial agency agreements
Compensation for the termination of the agency agreements
Paragraphs 1, 2, 3, of the aforementioned article provide that the principal shall pay the agent an indemnity to the agent, if the following conditions are fulfilled:
the agent has procured new customers to the principal or has remarkably developed the business with
the existing customers and the principal still receives substantial advantages deriving from the business with such customers; and
the payment of such indemnity is equitable, taking into account all the circumstances, specifically the commissions that the agent loses and that derive from the business with such customers.
Twelve months is the maximum that can be awarded to an agent; the case law does not lay down any rules whereby the Judge must calculate the actual amount of the indemnity.
According to paragraph 8 of the above article, the payment of the indemnity does not deprive, in any event, the agent of the right to possible damages.
Amount of the indemnity
According to the Magistrate's of Civita Castellana (1 December 1994, 'Vincenzi v. Ambro Italia'), article 1751 of the Civil Code does not lay down any specific rule for the calculation of the amount of the indemnity, but just indicates the maximum amount that could be recognised to the agent, and leaves entirely to the judge's appreciation to determine such an amount.
The aforementioned decision has observed that the equity criteria laid down by the above
provision does not relate to the determination of the amount of the indemnity, but only to the right to the indemnity.
Therefore, the judge should fix the actual amount of the indemnity on the basis of all the circumstances of the case and his appreciation.
On the other hand, the Court of Appeal of Milan granted a twelve months indemnity on the basis of two different circumstances:
the agent had remarkably developed the market, considering that, when the agency agreement had started, the principal had absolutely no business in the territory granted to the agent; and
upon the termination of the agency agreement, a significant group of clients had decided to renew their contracts with the principal.
In the light of the above circumstances, the indemnity was reduced by the Court by one fourth because of the loss of some of the clients.
It has also been pointed out that Italian law follows the German model, which
considers the development of new clients a 'conditio
sine qua non' for the recognition of the indemnity, as well as the criteria to determine the amount the indemnity.
Commissions due to the agent upon the termination of the agency agreement
Article 1748 provides that for the contracts concluded during the agency agreement, the agent is entitled to receive a commission, if the contract has been the result of his activity.
Unless otherwise agreed upon, the commission is due also for any
transactions concluded directly by the principal with any third
party, which the agent has previously acquired as a client for
business of the same kind, or with any third party, which is included
in the territory or in the group of clients reserved to the agent.
The agent is entitled to a commission on any transactions concluded after the termination of the agency agreement, if the principal or the agent has received the proposal before the termination of the agency agreement, or if such transactions are concluded within a reasonable term after the termination of the agency agreement, and the conclusion of said transaction is mainly the result of the activities performed by the agent. In such a case, the commission shall be paid only to the previous agent, unless specific circumstances justify that the commission be shared between the old and the new agent.
Unless otherwise agreed upon, the agent is entitled to commission at the moment where the principal has or should have executed his obligation on the basis of the contract concluded with the client.
The agent is entitled to a commission at the latest at the moment when, and in so far, the client has executed or should have executed his obligation, should the principal have executed his obligation.
If the principal or the client agree to implement the contract with the client wholly or
in part, the agent is entitled, for the part of the
contract which has been not implemented, to a commission reduced in accordance with the trade usages or, in the absence, to be determined by the Judge on equitable way.