Due to the development of international trade, it frequently occurs that French commercial agents contract with foreign companies , and reciprocally.
Due to the international dimension of agency agreement in this case, the drafting of the contract shall to be carried out with care. Several preliminary questions shall likewise be addressed prior to the conclusion/drafting thereof. Amongst these questions include notably the question of governing law of the contract as well as the question of the competent jurisdiction in the event of a dispute. These two questions in particular constitute strategic choices upon which particular attention should be paid.
In this regard, AUMANS Avocats we present to you today the commercial law in Italy : status, contract, severance payment, etc. !
What is the status of the sales agent in Italy ?
The Italian law on the commercial agent is mainly governed by the articles 1742 and following of the Civil Code (Civil Code) and, where applicable, by the Collective Bargaining Agreements (Collective Bargaining Agreements) which are essentially sector-specific negotiated collective bargaining agreements.
The aforementioned articles of the Italian Civil Code result from the transposition of the the European directive of 18 December 1986 as a result of an initial transposition that was incorrect.
The commercial agent contract in Italy: rights and obligations of the commercial agent of an Italian principal
The role of the commercial agent in Italian law
In Italy, as in France, the commercial agent has a independent status.
In Italy, the commercial agent has the task of promoting, on behalf of the principal, for remuneration, the conclusion of contracts within a specific sector (Article 1742 of the Civil Code).
The contract must, in principle, be evidenced in writing.
Governing Law and Jurisdiction
Regarding the applicable law to the contract, it is freely determined by the parties.
It should be noted that in practice, Italian clients almost systematically require that the contract be subject to Italian law and the jurisdiction of Italian courts.
The court before which the parties will have the right or obligation to bring any potential dispute may be chosen in advance in the agreement. The competent jurisdiction in the event of a dispute is therefore most often designated in a contractual clause by the parties (attribution of jurisdiction clause).
Commercial agent commission: What’s changing in Italy ?
Regarding the agent’s commission, there does not exist no difference significant difference between the French law and Italian law. Indeed, the different member states of the European Union have harmonized their legislation on this matter following the directive of 18 December 1986.
Thus, for all transactions concluded during the term of the contract, the agent is entitled to a commission if the transaction was concluded thanks to his intervention.
The commission is also due for matters concluded with third parties that the agent had previously acquired as clients for matters of the same type or belonging to the domain or sector or client group entrusted to the agent, unless otherwise agreed.
The agent is entitled to a commission on matters concluded after the termination of the contract for which the corresponding order was received by the principal or the agent prior to the termination. The agent’s right of succession also applies to matters concluded within a reasonable period after termination if the conclusion of such matters is primarily due to the agent’s activity.
Unless otherwise agreed, the commission is due to the commercial agent from the time and to the extent that the client has performed or should have performed the service based on the contract concluded with the client.
The commission is due to the sales representative, no later than, strictly speaking, from the moment and to the extent that the client has executed or should have executed the service if the principal has himself fulfilled his obligations (delivery of goods or provision of services, etc.).
The agent shall only be obliged to reimburse the commissions received where there is certainty that the contract between the client and the principal will not be executed for reasons not attributable to the principal. Any agreement more detrimental to the agent is null and void. The agent is not entitled to reimbursement of agency fees.
The execution of the contract by the commercial agent under Italian law
In Italian law, the agent who finds itself unable to perform the mission entrusted to it must immediately inform its principal. If it does not do so, the commercial agent may be liable to compensate its principal for the resulting damage for the latter.
The notice period and compensatory notice period payment
The Italian law provides that in the event of breach of commercial agent agreement , outside serious misconduct , the parties must execute a a notice period of between one and six months according to the duration of the contract. The notice period is thus one month in the event of termination during the first year , two months in the event of termination during the second year , etc. within a period of six months. In the event of termination of the contract for serious misconduct by the principal , if, in the end, such misconduct is not established, jurisprudence considers it to be a breach of contractual obligations of the principal and that the commercial agent must be compensated for this reason. As in French law, the agent then has the right to a notice indemnity. Specifically, in this situation, the indemnity comprises the commissions that the commercial agent would have had to receive if he had been able to execute his notice period normally.
Does the commission of the sales agent in Italy differ from French law ?
Regarding the commission of the sales agent in case of Breach of contract in Italian law , she differs quite substantially of the end-of-contract indemnity provided for by French law.
For the record, regarding end-of-contract compensation, the the 1986 directive it indeed left Member States with an alternative between the the solution provided for in Article 17.2 of said directive, reiterating the the German system , and the solution provided for the provisions of Article 17.3, mirroring the French compensation system.
Italy has adopted an indemnity system inspired by the German model. It has thus opted for the system of Article 17.2 of the directive which subordinates the right to compensation that is to say :
- the agent has brought new clients or developed significantly the operations with existing clients, furthermore subject to the principal maintaining substantial advantages following the departure of the commercial agent,
- the payment of this compensation shall be fair , taking into account all circumstances, including those lost commissions.
Finally, in Italy, the the amount of the compensation of the sales representative cannot exceed 1/5 of the commissions received by the agent over the past five years of contract execution. Or if the contract did not last five years based on the average contract duration. Damages and compensation may nevertheless be claimed in addition , subject to demonstrating a distinct harm.
Needless to say, no compensation is due to the sales agent if the termination of the contract is due to grave misconduct on the part of the sales agent.
Inversely, the end-of-contract indemnity is also due if the contract terminates as a result of the employee’s death.
Law firm specializing in commercial agency law for over twenty years, AUMANS Avocats deals with matters relating to commercial agency law not only in France but also in Italy and more generally in the different European countries, including the conclusion of agency agreement , of his/her execution or his/her termination (rights of succession, notice periods, termination indemnity of agency agreements, etc.). And this includes in cases of issues relating to private international law due to international contracts.
