admin, Autore presso Francesco Gozzo

esclusiva non concorrenza contratto concessione di vendita

The obligation of exclusivity and the covenant not to compete in the dealer agreement.

The granting of the exclusive right to the concessionaire is an incidental and non-essential element of the contract, cannot be derived implicitly from the predetermination of an 'area' to the concessionaire himselfas there is no necessary connection between the area and exclusive.

The grantor may not prevent exclusive area dealers from making passive sales outside the territory entrusted to them.

1. Sales concession and exclusivity

In a sales dealership relationship, 'exclusivity' is to be understood as the obligation on the part of the grantor to supply only the dealer with certain products in the area entrusted to him.

Although this obligation is one of the most frequently used agreements, it does not constitute an essential part of the agreement and, therefore, is not necessary for the relationship between the concessionaire and the grantor to be considered valid.[1]

Therefore, if the parties have not expressly agreed to it in the contract, it cannot be inferred either that it exists merely because a dealership contract has been concluded, or, even less so, because the dealer has been entrusted with an area (it is not at all unusual, in fact, for a dealer to act in a certain area entrusted to him, but without exclusivity).[2] On this point, we read in Jurisprudence that:

"the granting of the exclusive right to the concessionaire, being an incidental and non-essential element of the contract, cannot be derived implicitly from the predetermination of an 'area' to the concessionaire himselfas there is no necessary connection between the area and exclusive. "

However, it is not precluded that the parties may nonetheless prove that such an obligation exists even in the absence of a written contract and prove by witnesses that, for example, such an obligation arises from an oral agreement, or that it is inferred from the actual development of the relationship (cf. on the subject of agency: Burden of proof in agency contracts). On this point, a 2007 ruling by the Court of Appeal of Cagliari held that:

"In a sales dealership, the attribution of the exclusive right to the dealer is an incidental and non-essential element of the contract, but its existence, if the contract is not in writing, may be proven by witnesses and by any other suitable means (in the present case, the existence of the exclusivity clause was inferred, inter alia, from the fact that the parent company refused direct dealings with third parties by referring them to the dealer, from the advertising in the yellow pages and from the lack of other dealers in the area)."

In case the parties have not indicated thescope of application exclusivity, it must reasonably be understood to extend to the entire area entrusted to the dealer; as to the products, however, it must refer to the contractual products.[3]

2. Passive sales outside the territory.

This being said, the question arises as to whether the grantor, who has undertaken to sell certain products exclusively to an exclusive dealer in an area (e.g. Lombardy and Piedmont), may sell the same products to parties outside the territory, knowing that the same parties (potentially) could resell them in the territory of the dealer himself. The Supreme Court, in a more 'dated' orientation, held that:

"the exclusivity agreement entails, with reference to the area covered and for the duration of the contract, a prohibition to perform, not only directly, but also indirectly, services of the same nature as those forming the subject matter of the contract. [...] The prohibition to trade [...] the same products in the reserved area, [...] required the grantor - in accordance with the duty of fairness that constitutes the internal limit of any contractually assigned subjective legal situation - to refrain from any conduct likely to affect the result pursued."

However, this orientation must be updated and 'dropped' into a new regulatory framework, in line with the provisions of the Regulation (EU) No 720/2022 of the European Commission on agreements between companies operating at different levels of the production and distribution chain (vertical agreements).

In particular, Article 4 of the Regulation states that it shall not be unlawful to prevent the purchaser from making active sales in territories or customer groups which the supplier reserves to itself or allocates exclusively to another buyer, provided that the restriction does not also limit sales by the buyer's customers.

To better understand this rule, it is important to make a brief distinction between active sales and passive salesSimplifying, a passive sale can be defined as a 'purchase' in that the initiative is taken by the buyer;[4] active selling, on the other hand, is a consequence of an entrepreneurial strategy and actions of marketing targeted.

In light of the predictions briefly outlined above, a grantor can certainly create an exclusive networkdefining the territories in which their dealers can promote and market their products, but limiting such restrictions to active sales only. The licensor cannot, therefore, prevent exclusive area dealers from accepting and executing passive sales to parties outside the area entrusted to them; what can be excluded and prevented, however, is the area dealer from executing active sales, which are the result of marketing campaigns or commercial strategies carried out outside his territory.

However, the grantor has an obligation to control the network of its concessionaires (unless this obligation is contractually excluded[5]) , being liable for any breaches of exclusivity within its distribution network and, in some cases, even "intervene to counteract the behaviour of other dealers."[6]

Finally, it is emphasised that infringement of the exclusive right:

"constitutes conduct contrary to the duties of fairness and good faith and constitutes a serious breach of contract from which the termination of the contract follows."

3. Sales concession and non-compete obligation

As for thenon-compete obligation by the dealer, it too does not constitute a natural element of the contract and, therefore, in the absence of express provision, the dealer will be free to deal in competing products.[7] As with the exclusivity agreement, the parties may however prove by witnesses the existence of such an obligation.

However, the obligation of the concessionaire to carry out its activity in line with the principle of good faith in the performance of the contract remains unaffected, as it may not carry out any activity that may damage the market, brand and trade of the grantor.

Regarding the duration of the dealer's non-competition agreement, it is not subject to the limits (five years) imposed by Article 2596 of the Civil Code, insofar as it is not applicable to the discipline under examination.[8]

Regarding the issue, viewed from the perspective of antitrust law, in the light of current European legislation, Regulation (EU) 720/2022, in Article 5(1)a, introduces provisions concerning non-compete agreements within vertical agreements. In particular, the regulation provides that all agreements restricting competition may benefit from the block exemption, provided that the duration of the non-compete clause does not exceed five years. The new regulation is in line with the previous Regulation (EU) 330/2010[9]which already excluded from exemption non-compete clauses with a duration of more than five years, even if they were tacitly renewable.

However, the European Commission's new guidelines[10] have introduced an important innovation in this respect. In the case of tacit renewal, non-compete clauses that are tacitly renewed may be exempted, provided that they do not exceed a period of five years and that the distributor has an effective possibility to renegotiate or terminate the vertical agreement containing the non-compete obligation, with reasonable notice and without incurring unreasonable costs. Furthermore, the distributor must be able to switch to another supplier at the end of the five-year period. This represents a step forward compared to the previous regulation, as it introduces more flexibility and protection for the distributor while safeguarding the principle of competition.

_____________________________

[1] Appello Cagliari, 11/04/2007; Cass. Civ. 2004 no. 13079; on this point see Baldi - Venezia, Il contratto di agenzia, la concessione di vendita, il franchising, 2014, p. 135, GIUFFRÈ.

[2] Cass. Civ. 2004 No. 13079; Cass. Civ. 1994, No. 6819; Bortolotti, Distribution Contracts, 2016, p. 552, WOLTERS KLUWER.

[3] BORTOLOTTI, p. 553, op. cit.

[4] http://www.impresapratica.com/internet-marketing/vendita-attiva-o-passiva/

[5] Trib. Bologna 4.5.2012.

[6] Cass. Civ. 2003 no. 18743.

[7] BORTOLOTTI, p. 557, op. cit.

[8] Cass. Civ. 2000, no. 1238.

[9] Article 5(1)(a) of Regulation 330/2010 provided that: "The exemption provided for in Article 2 shall not apply to the following obligations contained in vertical agreements: (a) a direct or indirect non-compete obligation, the duration of which is indefinite or exceeds five years".

[10] Paragraph 248, Commission Guidelines.

by admin

The essential elements of the agency contract.

In order to identify the essential elements of the agency contract, i.e. those elements that are so characterising that they are indispensable to qualify the relationship as such, it is certainly appropriate to start from the definitions of agent that are provided to us by the legal system.

This passage, which at first glance would appear to be almost elementary, becomes much more complex when confronted with reality: the "notion"of agency provided to us by Article 1742 of the Civil Code, is partly at variance with that to which this rule has conformed,[1] that is dictated by the European Directive 86/653on the coordination of the laws of the Member States relating to self-employed commercial agents.

Article 1(2) of Directive 86/653 states that:

"For the purposes of this Directive, 'commercial agent' means a person who, as an independent intermediary, is permanently entrusted with negotiating for another person, hereinafter referred to as 'principal', the sale or purchase of goods, or with negotiating and concluding such transactions in the name of and on behalf of the principal."

Already from a first reading of the rule, it can be deduced that the elements characterising the commercial agent are essentially three, namely:

independence in the conduct of their business activities;
the continuity of the relationship with the principal;
the business of buying and selling goods.

This certainty is (probably) immediately undermined by reading the notion (not so much of agent as of agency contract) that is provided to us by Art. 1742 of the Civil Code:

"With an agency contract, one party permanently undertakes the task of promoting, on behalf of the other, for remuneration, the conclusion of contracts in a specified area. "

In this case the elements (characterising the contract) are essentially:

the stability of the assignment;
the promotion of contracts;
the area.

From an initial analysis, one realises that the most significant differences between the two definitions consist, firstly, in the concept of promotion (the directive, refers to the sale of goods, whereas the civil code, to the promotion of contracts) and, secondly, in the concept of area, which is only present in the notion proposed to us by Article 1742 of the Civil Code.

In fact, unlike the directive, in the context of which the provision for a territorial scope constitutes a mere contingency (possibly relevant from the point of view of indirect commissions, pursuant to Article 7 of the directive itself), Article 1742 of the Civil Code defines an agent as a person entrusted with the promotion of business in a given area.

Below we will analyse the elements provided by the two definitions, briefly comparing them, starting with the concept of zone, which is certainly the one that creates the most doubts and conflicting interpretations.

1. The area

The Court of Justice has repeatedly confirmed that it is sufficient for a person to fulfil the three conditions laid down in Article 1(2) of the directive in order to qualify as a commercial agent, irrespective of the manner in which that person carries out his activity (and provided that he does not fall within the exclusion hypotheses of Articles 1(3) and 2(1) thereof).[2]

Although a strict application of this orientation would lead to the conclusion that zoning is not one of the necessary requirements of the agency contract, one certainly cannot overlook the fact that Art. 1742 expressly calls for such a concept within the definition.

In line with this, there is an orientation of the most authoritative doctrine,[3] according to which, the inclusion of the concept of 'area' within the national legislation would represent an essential characteristic of the relationship, so much so that there could be no agency contract without the fixing of a specific territory reserved to the agent (or the same could be identified indirectly[4]).

But what is meant by zone and to what extent can this concept be extended (important, never confuse the concept of zone with that of exclusivity)?

Normally the zone is identified in the contract by reference to a geographical extension, however case law does not regard the requirement of the zone being determined with excessive rigidity, since it may be implicitly inferred from the reference to the territorial scope in which the parties unquestionably operate.[5]

As an alternative to the zone, case law has held that the concept of group of persons/clients, referred to in Article 7 of the Directive and Article 1748(3) of the Civil Code, in the context of indirect commissions also falls within this concept.[6]

It was even ruled out (albeit in an earlier judgment) that a contract limiting the scope of action of the agent to the promotion of sales to a single customer could be qualified as an agency.[7]

Part of the best doctrine (with which we associate ourselves) considers, however, that the conflict between the definition of Art. 1742(1) of the Civil Code and the directive would probably be surmountable through a "corrective" interpretation[8] of the rule in question, treating the reference to the area as a descriptive element of the normal situation and not instead as an essential and indispensable requirement of an agency contract.[9]

2. Independence (and conduct of business on the principal's premises)

As analysed above, the legislation includes independence among the essential requirements of the agency relationship.

Indeed, when analysing this requirement, it must be borne in mind that the agent's independence does not cease to exist only in the most blatant case in which the relationship presents the characteristics of subordination, but there are other numerous circumstances of interdependence, certainly more grey and, therefore, even more difficult to identify, which may in any event undermine the agent's autonomy, and, therefore, the configurability of this contractual case.

One thinks of the case, which is far from rare, of the agent carrying out his promotion activities at the principal's premises (where, for instance, in the automotive sector, it is even the norm for the agent to carry out his activities at the dealer-preprincipal's premises).

The question arises as to whether the status of agent is compatible with the pursuit of economic activity within the premises of the principal, given that neither the civil law nor any other provision of Directive 86/653 expressly makes the status of 'commercial agent' conditional on the person concerned pursuing economic activity outside the premises of the principal's establishment.

The European Court of Justice has ruled out that the protection granted by the directive can a priori be excluded for persons who exercise their activity at the principal's premises,[10] on the assumption that subjecting the status of agent to conditions additional to those laid down in Article 1(2) of the directive would limit the scope of that protection and thus undermine the attainment of the objective pursued by it.

It will be necessary to verify each case on a case-by-case basis and to analyse whether the exercise of the promotion activity at the principal's place of business actually affects the agent's independence and, therefore, to understand whether, due to his physical presence at the principal's place of business, the agent is in fact in a position that prevents him from exercising his activity in an independent manner, both from the point of view of the organisation of his work and from the point of view of the economic risks associated with it (even trivially due to a reduction in the expenses incurred by the agent himself, being hinged within the principal's commercial reality).

Italian jurisprudence has also come to the same conclusion, starting from the assumption that the agent's main obligation (i.e. the promotion of contracts) can be performed, depending on the type of organisation the agent uses and the business sector in which it operates, in the most varied ways;[11] "The main 'discriminating factor' for the existence of an agency relationship is and remains the actual existence or lack of decision-making autonomy and entrepreneurial risk on the part of the agent.

3. Continuity of activity

One of the elements characterising the agent's activity, and distinguishing it from other intermediaries (e.g. brokers, business brokers), is that the agent undertakes to engage in business promotion on an ongoing basis.

This obligation, which translates, on the one hand, into an attempt to conclude as much business for the principal as possible and, on the other hand, into stability in the frequentation of customers, a strengthening of loyalty and a numerical expansion of the customer base itself, has not been expressly included among the main requirements within the civil law framework (not even Article 1746(1), entitled the agent's obligations, makes express reference thereto).

Italian jurisprudence has overcome this 'loophole' by making continuity of activity one of the essential requirements of the relationship, to the extent that an agent has been held to be in breach for having only occasionally taken care of customer contact activities, even though he had nevertheless concluded several deals, even of considerable size.[12]

That being said, it very frequently happens that the activity of promotion, although carried out continuously and independently, is carried out alongside another activity, which may take on an ancillary or even a principal character.

What happens in such cases?

3.1. Agency contract and ancillary activity

Article 2(2) of Directive 86/653 grants Member States the option of providing that the directive does not apply to persons performing the "activities of commercial agents considered ancillary under the law of those Member States. "

In our legal system there is no specific provision on the subject, with the consequence that the characteristic content of the agency contract may be accompanied by accessory obligations for the agent, which do not distort the contract and maintain a merely instrumental relevance with respect to the agent's main obligation (think of the classic example of a commercial agent who also performs the activity of area manager).[13]

The case law of the European Court of Justice has also come to the conclusion that Article 1(2) of Directive 86/653 must be interpreted as meaning that a commercial agent may not be excluded from the benefit of that protection where the contract linking him to the principal provides for the performance of tasks other than those related to the activity of commercial agent, provided that that circumstance does not have the effect, having regard to all the circumstances of the case (nature of the tasks performed, proportion of those tasks, method of determining remuneration, existence of the economic risk incurred), of preventing the principal from carrying out his principal agency activity in an independent manner.[14]

The same principle also applies in the case where the agency contract is performed cumulatively (and thus with a separate relationship to the contract itself), through the performance of an activity of a different nature which binds them to the principal. Also in this case, the agency relationship will enjoy the protections of the directive, as long as the cumulative activity does not impair the independence of the principal activity.[15]

3.2. Ancillary agency activities to the main contract

The case where the sales promotion activity (even on a continuous basis) is ancillary to a different main relationship is different.

In that case, the discipline to be referred to, and which will govern the entire contract, will be that of the prevailing activity.[16]

From a practical point of view, the application of this principle is far from easy. One thinks of the classic distribution contract, which confers within it (and not in an ancillary or even unconnected contract) the power on the dealer to carry out, in certain cases and situations, an (ancillary) activity of intermediation and not pure resale.

In such a case, according to a long-standing ruling of legitimacy, if the activity of resale is prevalent over that of agency, the latter cannot in any event be attributed to the agency contract, but may at most be classified as business procuring.[17]

4. Sale of goods

The last essential requirement of an agency contract is that the agent promotes the sale or purchase of goods on behalf of the principal.

A first difference from civil law is the fact that the latter does not only cover the buying and selling of goods, but includes the much broader circumstance of brokering any type of contract (cf. Art. 1742 of the Civil Code).

The promotion and sale of services of all kinds (telecommunications, telephone, subscriptions of all kinds, etc.) undoubtedly fall within the 'Italian' notion of agent.

The conformity of our legislation with the European directive has been sanctioned by the European Court of Justice, which has clarified that when a member state in implementing the directive extends its scope of application to include the brokering of service contracts, these national rules must also be interpreted in accordance with the directive.[18]

There is, however, also at the level of European jurisprudence, a tendency towards a broad interpretation of the concept of both 'sale' and 'goods', this in favour of a broadening of the protection afforded to commercial agents, otherwise precluded by a more strict approach.

With regard to the interpretation of the concept of 'goods', the case law of the Court has held that it must be understood to mean all goods that are pecuniarily valuable and as such capable of constituting the subject matter of commercial transactions.[19]

With reference to the notion of 'sale', according to a commonly recognised definition, it consists of an agreement whereby a person assigns to another person, in return for payment of a price, his property rights in a tangible or intangible asset belonging to him.[20]

On the basis of these assumptions, the Court held that the supply of a computer program to a customer by electronic means in return for payment of a price also falls within the concept of 'sale' within the meaning of Directive 86/653 where that supply is accompanied by the grant of a perpetual licence to use the same computer program.[21]

[1] The first paragraph of Article 1742 of the Civil Code was initially added under Article 1, Legislative Decree No 303 of 10.9.1991 and subsequently replaced under Article 1, Legislative Decree No 65 of 15.2.1999.

[2] Judgment of 21 November 2018, Zako, C-452/17, EU:C:2018:935, paragraph 23.

[3] Baldi - Venice, The Agency Contract, p. 71.

[4] Cass. Civ. No. 20322, 2013, Cass. Civ. No. 2732, 1998.

[5] Cass. civ. no. 9063, 1994, Cass. civ. no. 2720, 1981

[6] Cass. Civ. no. 1916, 1993.

[7] Cass. Civ. no. 1916, 1993.

[8] Since the national court may not disapply a domestic rule that is contrary to a directive, it must interpret it in conformity with the directive itself, with the result that it will be obliged to prefer, among several possible interpretations of that rule, the one that is compatible with the directive itself (cf. Marleasing of 13.1990, Case C-106-/89).

[9] Bortolotti, Distribution Contracts, p. 102.

[10] Judgment of 21 November 2018, Zako, C-452/17, EU:C:2018:935, paragraph 28.

[11] Cass. Civ. No. 2853, 2001.

[12] Cass. Civ. No. 10130, 1995.

[13] Cass. Civ. No. 111, 1996.

[14] Judgment of 21 November 2018, Zako, C-452/17, EU:C:2018:935, paragraph 48-50.

[15] Judgment of 21 November 2018, Zako, C-452/17, EU:C:2018:935, paragraph 47.

[16] Bortolotti, Distribution Contracts, p. 131.

[17] Cass. Civ. 2382, 1987.

[18] Judgment 16.3.2006, Case C-3/04.

[19] In this sense, judgment of 26 October 2006, Commission v Greece, C-65/05, EU:C:2006:673, point 23 and case law cited therein.

[20]Judgment 3.7.2012, UsedSoft, Case C-128/11, EU:C:2012:407, point 42.

[21] Judgment of 16 September 2021, The Software Incubator Ltd, Case C-410/19.

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Commercial agent: responsible or owner of the data processing?

The figure of the agent is by no means easy to pigeonhole and has caused quite a few headaches for companies and the Garante Authority: in order to understand whether the agent is acting as data controller or data processor, it is necessary, from time to time, to verify how the relationship is (and will be) actually performed by the contractors.

Adaptation privacy of the agent therefore necessarily passes through a 'classification' of his role with respect to the company or companies he works for.

1. Owner, manager or appointee?

The position of the commercial agent from the point of view privacy has always been debated, mainly due to the fact that the agent must act in accordance with the instructions of the principal, but at the same time performs this activity with autonomy and independence, not being subject to the management and coordination power of the principal.

On the one hand, the principals had every interest in disregarding the activities and methods of the agents and therefore pushed for their qualification as autonomous data controllerson the one hand, while on the other hand the Garante has always pushed for an empowerment of principals with regard to the activities of agents.

According to the perspective endorsed by the principals, on the one hand we would have the principal, an autonomous data controller, and on the other hand we would have the agent, also an autonomous data controller, who in one way or another finds contacts for a potential contractualisation with the principal and communicates the data to the latter.

This framing is particularly advantageous for the principal because then he does not have to worry about 'how' agents retrieve data (perhaps by contacting customers who are natural persons by invasive methods and without bothering, for example, to consult the oppositions register or to check their consent to receive marketing communications), as data processing remains 'separate' between the two parties and each is responsible for what happens under his control.

However, for many years now, the Italian Privacy Guarantor has disproved this thesis, confirming that the classification of agents, except in exceptional cases, does not fall under the hypothesis of the autonomous holderbut rather in that of the external controller.

After a series of measures against various companies (especially telephone companies) that used agents for the promotion and marketing of their products and claimed not to be answerable for the actions of their agents precisely because they were 'autonomous data controllers', the Garante adopted a general provision in which it stipulated that:

"all principals [...] shall, within 60 days of the publication of this provision in the Official Journal, designate companies or third parties acting in outsourcing as data controllers".[1]

After the GDPR came into force (applicable as of 25.05.2018), the situation has not changed, as the most recent stances of the Garante on this point show us.

2. The measure of 9.7.2020 against Wind Tre.

An interesting example comes to us from the recent measure of the Garante against Wind Tre, where the Authority clarifies the classification of agents and procurers in the light of the GDPR categories.

In particular, the measure concerns the activity carried out by an agent of Wind, who, although he had been correctly classified by Wind as an external data processor (by signing an appropriate appointment and also offering training to his external employee on the subject privacy[2]), the latter had addressed directives to its proxies aimed at collecting consensus privacy decidedly 'original'. As one procurer reported, in fact:

"following the indications of the area manager Mr. ..., during each activation of sim cards, the reference operator must flag all the consents provided therein. Among other things, this operation is facilitated by a special button in the management software [...]. Only in the event that, on the occasion of the signing of the paper form printed by the system and submitted to the attention of the interested party for acceptance of acknowledgement of receipt of the information and issue of the consents, the latter should express doubts as to the consents present in the reference form, the operator shall amend them according to the indications provided directly by the interested party".

The activity carried out by the agent was clearly unlawful because privacy consent must be "expressed by an unambiguous positive act by which the data subject indicates his or her free, specific, informed and unambiguous intention to accept the processing of personal data concerning him or her"[3] and cannot be coerced or implied.

Having thus clarified the wrongfulness of Wind's agent's conduct, it remained to be understood to whom this wrongfulness was attributable.

In the present case, Wind (the data controller) claimed, defending itself, that it was not responsible for the autonomous and independent conduct of its external manager (the agent) who, despite the correct training given and the correct instructions received, had acted on his own initiative in breach of the GDPR.

However, this thesis was flatly denied by the Garante as it is clear that the agent had no interest of his own in collecting consents on behalf of Wind by forcing the will of customers.

The ruling then confirms the correct classification of the agent as externally liable, even going so far as to state that:

"this qualification in respect of the legal relationship between the parties can also be deemed to exist in the event that the party materially making contact, while remaining unknown to the data controller, in fact enters into a contractual relationship similar to that in place with directly contracted partners".

The principal/principal relationship thus exists, in fact, not only if the principal completely disregards the existence of a mandate relationship, but also if he disregards it.

Another important clarification by the Garante, contained in the measure under analysis, concerns the same procurers who had been contracted by Wind's agent. In particular, the agent, who had not classified them as data processors or in any case authorised them to carry out processing operations, on the (erroneous) assumption that they '.operate autonomously' e "each procurer is free and, therefore, autonomous in the search for parties to whom to direct business proposals".

The Garante disavowed the argument put forward by the agent and 'slapped him down', stating that the latter should have appointed the procurers as external data processors (sub-processors vis-à-vis Wind) and/or authorised processors (a category that groups together employees and similar subjects and therefore presupposes a relationship of broader direction and control on the part of the employer) depending on the case.

3. The Agent's role: owner or manager?

That being clarified, in order to assess whether, in the individual case, the agent should be classified as controller or processor, one must first understand how the relationship is (and will be) actually performed by the contracting parties. To simplify, we can identify three typical situations:

the agent finds and manages lists of customers on its own account, provides them with information privacy as principal and then chooses to which of its principals it will propose the conclusion of the deal (at which point the 'selected' principal will provide the prospective client with its disclosure privacy together with the contract). In this case the agent will be autonomous data controller.

the agent finds, on behalf of the principal, customers and/or works on contact lists submitted to him by the principal. In this case the agent will external controller and the principal will be the owner. The agent will not have to provide his own information, but will merely provide the client with the forms privacy prepared by the principal, except in special situations (e.g. the agent wants to manage the principal's customer data independently, where the agency mandate so permits, in order to send informative communications to customers, etc., in which case he will have to submit a second information notice to the customers, collecting consent for this processing himself). Data processing takes place under the umbrella of the principal's organisation, of which the agent is an external appendage.

the agent not only acts on behalf of the principal, but also operates exclusively with the principal's tools, in offices made available by the principal, on the principal's computers and following the principal's instructions. In this case, for the purposes of privacythe agent becomes a subject who operates under the authority of the principal (formerly 29 GDPR), as there is no longer any reason to speak of an external controller because the agent is completely internalised in the controller's structure and cannot be distinguished, at least with regard to data processing, from any employee.

It is clear that in the majority of cases the agent will fall under (2) and that the agent will play the role of the external controller.

4. Differences in EU

On this point, it should only be noted that in other European jurisdictions the situation may vary, e.g. in a commentary on the GDPR produced in England agents are 'normally' included in the category of persons authorised to process (assumption (3)):

"The latter category of persons who are not third parties normally comprises the employees, agents and subcontractors of the controller or processor which/who process data for them under their direct authority"[4]

In the opposite direction would seem to move the German systemwith the Munich Court of Appeal, which in a 2019 judgement[5] brings the agency relationship back to the privacy to a relationship between autonomous data controllers.

The Court, in particular, when considering the principal's duty to produce to the agent a statement of account relating to the contracts concluded thanks to the agent's intermediary work, came up against the principal's objection that such data would not be susceptible of transmissionbecause such transmission could only take place with the consent of the data subject (according to the client, in this case, there is neither a legal obligation to transmit the data, nor is this sharing necessary to fulfil the contract between client and customer).

The Munich Court of Justice, in rejecting the reenactment of the principal, but accepts its premises and confirms that of transmission ("übermittlung") of the data is[6]but then states that this transmission may legitimately take place because of the agent's legitimate interest in knowing the data.

The Bavarian court's reconstruction thus starts from the assumption that there is an equal and autonomous relationship between agent and principal, without the former having to be held responsible for the latter, which is why the court resolves the exception by identifying the legitimate interest as the means of legitimising the fact that the agent knows data of third parties (clients of the principal whom he has contracted).

An Italian judge, faced with the same question, would probably have traced the legitimacy of the transfer of data back to the relationship between principal and agent, which legitimises the entrusting of data (albeit 'supervised' in its adequacy) between one subject and the other on the basis of the contract of appointment binding them.

In all likelihood, a reading such as that offered by the German court, although difficult to reconcile with the EDPB guidelines, is grounded in the agent's independence relationship, set out in Art. 1(2) of the European Directive on commercial agents (86/653/EEC) and transposed by §84 of the German Commercial Code, which reads as follows:

"A commercial agent is someone who, as an independent trader, is permanently entrusted with brokering transactions for another entrepreneur (entrepreneur) or concluding them on his behalf. Self-employed is one who is essentially free to shape his activity and determine his working time."[7]

In confirmation of this, also reading the 'interpretation guide' to the GDPR, drawn up by the Bavarian State Office for Data Protection Supervision, shows that the German legal system favours the inclusion of the commercial agent among the entities that (normally) perform the function of data controller and not that of data processor[8]giving, precisely, particular value to the role of independent operator that the latter plays in the contractual relationship.

5. The agent's privacy adjustment

What must the agent do, therefore, to be in compliance from the point of view of privacy?

The fundamental document for the agent, in the physiological hypothesis (2) we have seen, becomes the appointment as external manager, formerly Article 28 GDPR, i.e. an actual contract regulating the nature and purpose of the processing, the type of personal data and the categories of data subjects, the obligations and rights of the data controller, the duration of the processing, etc.

This document will therefore be essential for the agent to understand what data may be entrusted to him, to whom he may communicate it, what he must do if a customer asks to exercise his rights privacywhat to do in the event of a data breach (e.g. the agent loses the laptop on which he kept the principal's customer data), etc.

Three things are particularly important in the nomination:

what happens to the data processed on behalf of the client at the end of the contract of appointment, i.e. whether they are to be returned, destroyed or retained (clearly, the agent may still retain the data if he needs it to be able to prove his performance and get paid, for instance);
whether the agent may appoint sub-responsible and the procedures to be adopted in the case. Some appointments provide for the possibility of appointing sub-agents only with the prior consent of the principal, while others leave more freedom to the agent, some, however, require the agent to inform the principal of the sub-agents it employs to process its data. And it must be borne in mind that sub-agents are not only the sub-agents, but all the suppliers that process the principal's customer data (for instance, and trivially, if I store data on Google Drive, it is Google that is my sub-processor, and if the appointment provides for the prior consent of the principal for the appointment of the sub-processor, I will have to ask the principal whether I may use Google to store his data for instance);
i audit fees of the owner, who, depending on the case, might prescribe simple card audits (questionnaires on the agent's level of compliance) or even more invasive inspections at the agent's offices (who in some cases, perhaps if he is a multi-firm agent, will have to consider whether to reject such a clause because it might conflict with previous commitments privacy taken with other principals).

If the appointment is missingit is appropriate for the agent to confront the principal on the point and, in the event of inertia on the part of the principal, to take the initiative himself, submitting to the principal a so-called 'self-appointment' as external manager so as to effectively regulate the relationship between the parties.

The agent should then keep a register of treatments, formerly Article 30 GDPR (mandatory document only for companies with more than 250 employees or which carry out data processing involving risks or which involve data belonging to special categories, but always highly recommended because it also allows the agent to identify and monitor the data streams of his professional activity).

In addition to this treatment register (highly recommended) will then go (this time compulsorily) kept a register of the processing operations of the responsible person. This particular register of processing operations must be completed for each principal who appoints the agent as external manager. Usually in the individual appointments there are references to this register and any requests by the principal on its keeping.

On the website of the Garante privacy is present, at this pageboth a model register of processing operations and a model register of the controller's processing operations.

6. B2C and B2B

It should also be borne in mind that even if this appointment is certainly more pressing when the agent has to contact natural persons on behalf of the principal, it is not a formality that can be excluded even when the agent only deals with B2B and has to contact predominantly companies on behalf of the principal.

Even in this case, in fact, the agent may process data of individual persons within the client companies (also, trivially, name, telephone number, email, etc.), i.e. data of sole proprietors or professionals that are to all intents and purposes personal data, and it is therefore necessary in any case to formalise for the purposes of privacy the relationship with the principal.

7. The

Having clarified the relationship with the principal, which is generally regulated in the contract of appointment, it is appropriate for the agent to produce its own disclosures.

Normally, the agent will not have to produce disclosures to the customers it contacts on behalf of the principal (at most, it will have to provide the principal's disclosures in accordance with the appointment), but this does not detract from the fact that the agent still needs a disclosure.

For instance, the agent will process the data of the principal, its suppliers, consultants, employees, sub-agents, etc.

All such data processing the agent does not do 'on behalf' of a principal, but does so independently, and it will be necessary to submit to the various parties with whom he comes into contact on his own account a notice on how he will process the data of these parties.

The information, which generally does not entail a request for consent privacy insofar as it is intended only for the management of the contract between the parties, it must nevertheless be provided in order to document that the data subject has been informed of how the agent will deal with his or her personal data. The proof of having submitted the information to the data subject (a signature on the form, the email with which the information was sent, the flag on the agent's website) must be maintained for as long as the data are held.

The disclosure must be drafted sensibly, without uncritically relying on online forms (think for instance of the external Google manager for the corporate cloud, Google except for certain contracts involves a transfer of data to the USA, to choose a basic information notice in which it is written that data will under no circumstances be transferred outside the European Union is already an easily detectable error in the event of an audit).

8. Appointments, authorisations, etc.

In addition to these basic documents and arrangements, the architecture privacy of the agent grows as the structure grows. Sub-agents should be appointed as external managers, as should the labour consultant, the party providing the corporate cloud (in which case it will be more a matter of finding the self-appointment that these large companies almost always prepare but sometimes struggle to find) as well as all those partners who are not in a position of subordination to the agent and who in providing their services process data on behalf of of the agent (except in special cases such as a partner with a particular professional qualification, e.g. a lawyer or an accountant, who remain autonomous data controllers even if they process data on behalf of the agent).

Employees (and their associates) will have to be given more detailed instructions on how to process both paper and computer data, regulating their access to company systems and devices, and will have to be adequately trained.

The website should be adapted with privacy and cookie policy and as the structure grows in importance, it will be appropriate to adopt policies defining how to handle data breaches in a coordinated manner, how to respond to access requests, how to manage software and IT tools, etc.

9. Adaptation as a work in progress

European legislation requires a 360 degree approach to the phenomenon privacychecking for each business activity whether it may involve personal data and how these are positioned in the structure privacy corporate.

Adaptation must then always be considered a work in progress as what is adequate at one time may become obsolete later. Our data increasingly travel on computer systems and networks that evolve at a rapid pace, if until yesterday the security standards of a laptop with Windows 7 were adequate today this is no longer the case, if until last year training to avoid attacks ransomware included a number of examples now the attackers no longer use any of those methods and have invented new, more devious ones.

As bureaucratic and documentary as it may appear, the approach described in these lines is only intended to create procedures to make it easier for the agent to make substantial adjustments, so that he or she can look with an organised set-up at what really matters, i.e. to avoid personal data processing done lightly and therefore very risky, think about the computer protection of the systems on which the agent works (encrypting a portable device today is really trivial and free of charge and can be life-changing in the event of loss of the device), and adapt data protection over time to the changing corporate set-up and to regulatory and technological developments.

Lawyer Riccardo Berti

[1] Ownership of the processing of personal data by persons using agents for promotional activities - 15 June 2011, Published in the Official Gazette No. 153 of 4 July 2011, Register of Measures, No. 230 of 15 June 2011.

[2] The written form for the appointment of an external controller is not a mere prudential suggestion, but a real regulatory obligation, provided for in Article 29(9) GDPR (note, in the language of the GDPR 'written form' does not only mean paper form, on the contrary, the European legislation encourages the digitisation of privacy documentation).

On the other hand, as regards the training obligation, the legislation prescribes that the person in charge may process data on the documented instruction of the owner, so in a 'simple' agency relationship, mere instructions to the agent may suffice, whereas in the case of Wind, which offers agents the use of its own management software, it is clear that this instruction obligation is in fact transformed into an obligation to train external collaborators, to ensure that they use the tools that the company makes available to them safely and with awareness.

[3] Recital 32 EU Reg. 679/2016 (GDPR)

[4] The EU General Data Protection Regulation (GDPR): A Commentary' C. Kuner, L. A. Bygrave, C. Docksey, L. Drechsler. Oxford University Press (2020).

[5] Case 7 U 4012/17 of 31.07.2019

[6] According to Art. 4 point 2) GDPR, transmission is a form of communication of data, which in turn, according to Art. 14 para. 3 lit. c) GDPR, is an activity involving two or more data controllers (whereas data controllers and authorised persons are not communicated/transmitted data, but rather they carry out data processing on behalf of the data controller, whereas the outsider is, in fact, a single entity).

[7] §. 84 HGB "Handelsvertreter ist, wer als selbständiger Gewerbetreibender ständig damit betraut ist, für einen anderen Unternehmer (Unternehmer) Geschäfte zu vermitteln oder in dessen Namen abzuschließen. Selbständig ist, wer im wesentlichen frei seine Tätigkeit gestalten und seine Arbeitszeit bestimmen kann".

[8] Auslegungshilfe | Bayerisches Landesamt für Datenschutzaufsicht.

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General terms and conditions: battle of the forms, Vienna Convention and civil code.

To understand whether, when and to what extent the general terms and conditions apply to the sales relationship is the purpose of this article, in which an attempt will be made to outline the differences between the civil law and the Vienna Convention rules.

In commercial negotiations it is far from uncommon for the buyer, while expressing to the seller his willingness to accept the proposal received, to include in his declaration additional or different conditions to those used by the other party.

It sometimes happens that the purchaser merely accepts the proposal, enclosing its general terms and conditions within the communication. Sometimes, the general terms and conditions are not even attached to the order confirmation, but only referred to (e.g. by means of a link which links to a page on the site where they are uploaded). It still happens that both parties enclose their "general terms and conditions" to all the documentation they exchange in the course of negotiations for a particular sale, or even in the course of their much broader business relationship (in purchase orders, emails, invoices, website, delivery notes, delivery notes, etc.).

To understand whether, when and to what extent the General Terms and Conditions (GTC) apply to the sales relationship is the purpose of this article, in which an attempt will be made (as far as possible) to outline the differences between the civil law and the Vienna Convention (CISG).

With the aim of giving the article a systematic approach and hoping that this will make an issue that is certainly far from easy more understandable, we prefer to proceed by stepFirstly, analysing what happens if only one of the contracting parties has referred to its GTC at the stage of the conclusion of the contract, and then moving on to the more complex situation where both parties have referred to their GTC (so-called ".battle of the forms").

1. Proposal and acceptance: Art. 1229 of the Civil Code and Art. 19 CISG.

Although the Vienna Convention does not contain a rule expressly regulating general terms and conditions, since its Part II (Art. 14-23) comprehensively regulates the "formation of the contract", it will be necessary to refer to the rules contained therein in order to understand what formal requirements the GTC are subject to.[1]

In particular, Art. 19(1) of the Convention provides that a reply to a contractual proposal purporting to be an acceptance, but which contains additions, limitations or other modifications, is to be considered as a rejection of the proposal and is therefore to be considered as a counter-proposal.

From a first reading of this provision, it would appear that the CISG also adopts the principle transposed by the civil law system in the fifth paragraph of Art. 1326 of the Civil Code, under which "an acceptance not in conformity with the proposal is equivalent to a new proposal".

In fact, the Civil Code very strictly accepts the so-called '.mirrow image rule", i.e. the need for a fully corresponding relationship between the content of the proposal and the acceptance, even considering it necessary that the meeting and merging of proposal and acceptance should involve not only the main clauses, but also the ancillary ones. The case law reads:

"On the subject of the parties' agreement, the hypothesis provided for in the last paragraph of theArticle 1326 of the Civil Code. also occurs when the changes requested at the time of acceptance are of secondary value; therefore, in progressive training contractsin which the agreement of the parties on all the terms is reached gradually, the moment of finalisation of the transaction is normally that of agreement final on all main elements and accessoriesunless the parties intended to bind themselves in the agreements reached on individual points by reserving the regulation of secondary elements. "[2]

La CISG, on the other hand, knows an exemption to the "mirrow image rule"contained in Art. 19(2). In particular, the response to an offer received, which has a different content, but not to such an extent as to substantially alter its terms (c.d. immaterial modifications), constitutes an acceptance of the offer unless the offeror, without undue delay, contests such discrepancies either orally or by serving a notice to that effect on the other party.

But what are the immaterial modifications introduced by Article 19(2)?

International jurisprudence has considered not substantiale.g. a change in the acceptor favourable to the proposer[3] or for these irrelevant[4]an amendment to the packaging clause[5]an amendment to the clause on the time limit for reporting defects[6]a warning that the price might fluctuate due to changes in market prices[7].

The third paragraph of the aforementioned Art. 19 comes to the interpreter's rescue, indicating the variations that instead are substantial and which therefore, if made in the answer, transform it into a rejection of the proposal, so that it necessarily becomes a counter-proposal. These are the modifications:

"the price, the payment, the quality and quantity of the goods, the place and time of delivery, the limits of one party's liability to the other or the settlement of disputes."

Arguably, the choice of having adopted a "mirrow image rule" is not rigid, it is dictated by the need to prevent one of the parties, who, in the presence of changed factual circumstances, intends to escape from its contractual obligations, from achieving this result by pointing out a non-substantial discrepancy between the proposal and acceptance and, therefore, the non-conclusion of the contract.[8]

Thus, in any hypothesis in which the adherent's general terms and conditions involve non-substantial modifications, the contract, in the absence of an objection on the part of the proposer, must be deemed to have been concluded and will be governed by the clauses contained in the acceptor's form (again, it should be noted that only the hypothesis in which it is only the adherent who has invoked the GTC and not both parties are being analysed at present).

2. When the GTC apply to the contract: Civil Code and CISG compared.

Taking the reasoning further, in the event that the adherent's GTC contain significant changes with respect to the proposal, the application of the civil law rules, as opposed to the Vienna Convention rules, has obvious practical impacts.

In fact, if only the civil law rules apply to the relationship, the problem will (mainly) be solved by using the tools provided by Art. 1341 of the Civil Code, which provides, in a very condensed form, (para. 1) that the GTC are effective vis-à-vis the party who received them, if they were known or knowable by him using ordinary diligence at the time of the conclusion of the contract, with the exclusion (para. 2) of the clauses "vexatious" the validity of which is, however, subject to specific written acceptance by the recipient.

With regard to non-'vexatious' clauses, there are essentially two limits to the enforceability of the GTC imposed by law:

the reference to the time of the conclusion of the contract, the purpose of which is to exclude the effectiveness of general terms and conditions that the adherent has had the opportunity to become aware of at a time subsequent to the perfection of the contract (e.g. a text inserted in the invoice[9]);
As for the criterion of ordinary care, this must refer to a concept of normalitywhich must be calibrated according to the type of economic transaction, it being however excluded that the adherent may be required to make a special effort or expertise in order to know the general terms and conditions used by the predisposing party.[10]

If the Vienna Convention applies to the relationship, in addition to Art. 19, Arts. 14 and 18, which govern the "formation of the contract", as well as Arts. 7 and 8, which govern the criteria of interpretation, will come to the rescue.

Indeed, according to much of the doctrine[11] and case law[12]In the event of the application of the CISG to the relationship, the above rules are the only ones that must be adopted in order to understand the formal requirements to which the CISG must be subject, with the consequent inapplicability of the rules of Art. 1341 of the Civil Code.

Like already analysed in a previous article, Art. 14 provides that a proposal addressed to one or more persons, in order to be such, must be sufficiently precise (sufficiently defined) and indicate its author's willingness to be bound.

In adopting this principle to the general terms and conditions of sale, the German Supreme Court stated that it must be apparent at the formation of the contract:

expresses the offeror's intention to incorporate the GTC into the offer;
the text must have been transmitted or, in any event, made available to it prior to the conclusion of the contract.[13]

The actual 'availability' of the GTC must be bilaterally assessed in each case, in the sense that it is also incumbent on the receiver, at the negotiation stage, to ascertain and understand whether or not the GTC are applicable to the relationship, using the diligence of the 'general terms and conditions of sale'.reasonable person"imposed on him by Art. formerly Article 8(2).[14]

It would seem, therefore, that the Convention imposes a higher degree of diligence on the entrepreneur in ascertaining and verifying by what contractual terms the relationship is governed; this is certainly in line with the spirit of the Convention, designed to regulate international sales relationships between operators in the sector who are required, necessarily, to have a level of competence appropriate to the activity they perform.

Similarly to civil law, the time at which the GTC are made known to the recipient is essential, which is why case law has held that GTC that have been submitted to the recipient once the relationship has already been concluded, i.e. by means of a reference thereto in the sales invoice, cannot form part of the contract.[15]

3. Implied acceptance by conclusive facts.

Once it has been established that the conditions were known or knowable to the recipient, the Convention being characterised by the principle of freedom of form (and evidence) under Art. 11, in the absence of express acceptance, it must be understood whether they were accepted implicitly, in accordance with the combined provisions of Art. 11 and Art. 11.Article 18 (acceptance of the proposal) and Article 8.

In fact, Article 18(1) states firstly that "a statement or other conduct of the recipient indicating consent to an offer constitutes an acceptance."Furthermore, Art. 18(3) states that "the recipient of the offer may indicate consent by performing an act relating, for instance, to the shipment of goods or payment of the price."

On this point, a US court ruled that:

"under the CISG, acceptance does not require a formal signature or acceptance of the offer. [...] The investigation showed that at the time STS had sent sales quotations to Centrisys, including general terms and conditions as an annex to the communication. By adopting the sales quotation, Centrisys accepted the contractual proposal for the sale of the centrifuge, including the general sales conditions."[16]

It is thus inferred that if the GTC were known or knowable (using the diligence of the reasonable man set forth in Art. 8) by the receiver and have been accepted by the latter by implication, they will form part of the contract unless the parties agree or the usages and customs applicable to the relationship make their validity conditional on a form which the parties have not complied with.

4. Language of the CGC.

A very brief digression on the subject of the obligations of diligence of the receiving party, there are divergent orientations as to the validity of general terms and conditions written in a language not known to the receiving party; part of the case law, in fact, considers that the GTC written in a foreign language are in any event valid, precisely by virtue of the obligations under Art. 8(2), it being held that an entrepreneur or in any event an international operator, before signing a contract, is bound to verify what he is signing even (trivially) by having a simple translation made.[17]

5. Battle of the forms: knock-out and last shot rules.

At present, the scenario where only one of the two parties has sent its general terms and conditions has been analysed.

What happens, on the other hand, if one party sends a proposal to the other party, enclosing its own GTC, and the other party responds, albeit accepting the proposal, by enclosing its own GTC that differs from those received, and then both commence performance of the contract?

Considering that the parties have executed the contract, the need arises to understand from which clauses standard the relationship is regulated and two main approaches are used to do this: the last shot rule and the knock-out rule.

As an advocate of "last shot rule"it is deemed appropriate to refer to the most authoritative doctrine:

"if the general terms and conditions of the acceptor substantially alter the terms of the proposal, the contract cannot be considered to have been concluded, not even by excluding the conflicting general terms and conditions, as would be the case in part of the doctrine and case law which favour the so-called "Rechtsgültigkeitslösung" o "knock-out rule'. In our view, if the contract is performed, this must be considered as acceptance by the (original) offeror of the acceptor's counter-proposal - of which the general terms and conditions that substantially modify the original proposal also form part; in doctrine it has been referred to as the "knock-out rule".last shot rule'[18]

According to the different theory of 'knock-out rule"In the event that the parties have exchanged conflicting forms, the fact that the contract has been executed should be interpreted as the intention of the parties, not so much that they have not reached an understanding (otherwise the execution of the contract would not be explained), but rather that they have reached a consensus regardless of the conflicting clauses, which clauses must instead be removed from the contract.

The German Federal Court espoused this theory, justifying it on the basis of the criteria of good faith and fair dealing (Art. 7(1) CISG), stating that clauses contained within general terms and conditions become part of the agreement (only) if they do not conflict with each other.[19]

Certainly, this theory has implications that are far from easy to execute and difficult to apply in practice, if one thinks of the fact that it will have to be left to the judge to reconstruct the actual will of the parties pursuant to Art. 8, going so far as to delete the clauses on which there was no actual meeting of wills between the contracting parties.

[1] Bortolotti F. ''Handbook of International Commercial Law'' vol. II L.E.G.O. Spa, 2010; Ferrari F. ''General terms and conditions of contract in contracts for the international sale of movable goods'' in Obb. e Contr., 2007, 4, 308; Bonell M.J. ''The general terms and conditions in use in international trade and their evaluation at the transnational level'' in ''Le condizioni generali di contratto'' edited by Bianca M., Milan, 1981); Larry A. DiMatteo, International sales law. A global challenge, Cambridge, 2014.

[2] Cass. Civ. 2003, no. 16016.

[3] Oberster Gerichtshof, Austria, 20.3.1997.

[4] China Internationale Economic & Trade Arbitration Commission, 10.6.2002.

[5] Oberlandesgericht Hamm, Germany, 22.9.1997.

[6] Landgericht Baden-Baden Germany, 14.8.1991.

[7] Cour d'Appel de Paris, France, 22.4.1992.

[8] Bellelli, sub. art. 19, Vienna Convention on Contracts for the International Sale of Goods, commentary coordinated by Bianca, CEDAM, 1992.

[9] Cass. Civ. 1962, 2890.

[10] Bianca, Civil Law, The Contract, 1987.

[11] Bortolotti F. ''Handbook of International Commercial Law'' vol. II L.E.G.O. Spa, 2010; Ferrari F. ''General Terms and Conditions of Contract in Contracts for the International Sale of Goods'' in Obb. e Contr., 2007, 4, 308; Bonell M.J. ''Le condizioni generali in uso nel commercio internazionale e la loro valutazione sul piano transnazionale'' in ''Le condizioni generali di contratto'' edited by Bianca M., Milan, 1981).

[12] Trib. Rovereto 24.8.2006; Cass. Civ. 16.5.2007, no. 11226.

[13] Bundesgerichtshof, Germany, 31.10.2001; on this point also Zeller, The CISG and the Battle of the Forms, in Di Matteo, op. cit.

[14] Zeller, The CISG and the Battle of the Forms, in Di Matteo, op. cit.

[15] Chateau des Charmes Wines Ltd. v. Sabaté USA, Sabaté S.A.

[16] Golden Valley Grape Juice and Wine, LLC v- Centrisys Corporation, 22.10.2011.

[17] MCC.Marble Ceramic Centre v. Ceramica Nuova D'Agostinoin the opposite direction, Oberlandesgericht Celle, Germany, 2.9.1998.

[18] Ferrari, sub art. 19, Vendita internazionale di beni mobili, op. cit. in Mastromatteo, La Vendita internazionale, Giappichelli, 2013.

[19] Bundesgerichtshof, Germany, 9.1.2002.

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Proposal, acceptance and pre-contractual responsibility. Vienna Convention and the Civil Code compared.

The purpose of this article is to give the reader an overview of how the Vienna Convention has regulated the institutions of the proposal of an offer, its acceptance, pre-contractual liability in negotiations and the main differences from Italian law.

At the outset, it should be pointed out that, since the Vienna Convention is characterised by freedom of form (and of proof) under Article 11, the proposal and acceptance are also to be considered free-form acts, since they may be manifested in any manner (thus either orally or by conclusive facts).[1] This provision is in any event derogable in nature, with the consequence that not only may the parties provide for the necessity of a specific form for the validity of the contract they intend to enter into, but also that such a derogation may result from the existence of usages and customs (on this point cf. commentary on art. 9).

1. Art. 14: Definition of proposal.

"A proposal for a contract, addressed to one or more specified persons, constitutes an offer if it is sufficiently definite and if it indicates the intention of its author to be bound in case of acceptance. A proposal is sufficiently definite when it indicates the goods and, expressly or by implication, fixes the quantity and price or gives indications capable of determining them.

A proposal addressed to unspecified persons is considered only as an invitation to offer, unless the person making the proposal has clearly indicated otherwise."

The definition of a proposal in the Vienna Convention is finalised in Article 14(1), which lists in detail what are the necessary elements for it to be considered valid.

In particular, that article provides that the proposal, to be such, must be "sufficiently precise", indicate the offeror's willingness to be bound, expressly state the goods or goods to be contracted and also implicitly fix (or in any event give indications for determining them) the quantity of those goods and the price[2]by referring, where they have not been determined, to the trade customs and practices referred to in Articles 8 and 9 of the Convention.

Importantly, if one wishes to expressly exclude that the manifestation of will can be regarded as a genuine proposal, it should therefore be expressly provided for, through the insertion of formulae such as 'this is an expression of interest, not an offer to buy'.

This provision, although it has no express equivalent in the civil code (which does not list in any article what the requirements of an effective proposal are), however, reflects principles that are basically common domestic law: the proposal must manifest the will of the party to be bound and, likewise, be of sufficient content to define the contractual programme to be performed.[3]

An element that is detaches instead from our right and certainly that of Art. 14(2), which provides that a contract proposal must be addressed to one or more specified persons. If, on the other hand, the proposal is addressed to a generality of persons, it has the value of a mere invitation to negotiate or to offer, unless the contrary is clearly indicated.

Therefore, the legislator of the Convention did not accept the rule (known and present in Italian law) of theoffer to the public referred to in Art. 1336 of the Civil Code as a proposal capable of leading to the conclusion of the contract at the time when acceptance is brought to the knowledge of the principal.

2. Art. 15: Withdrawal of the proposal.

"An offer has effect when it reaches the addressee.

An offer, even if irrevocable, may be withdrawn if the relevant declaration reaches the addressee before or at the same time as the offer."

Like Italian law (Art. 1335 of the Civil Code), the Vienna Convention also configures the proposal (and offer) as recetive actwhich takes effect only when it has been brought to the knowledge of the addressee. The Convention, in order to better explain when a proposal (and offer) is brought to the knowledge of the other contracting party, expressly provides in Art. 24 that

"For the purposes of this Part of the Convention, an offer, a declaration of acceptance or any other manifestation of intent "is received" by its addressee when it is addressed orally to the addressee or is delivered by any other means to the addressee at its place of business or mailing address or, if it has no place of business or mailing address, at its habitual residence"

The second paragraph of Article 15 also recognises the proposer's right to "withdraw"(and not revoke, a power granted to it by Art. 16(1)) the offer within the time limit of its delivery to the offeree.

The Civil Code does not regulate this difference, but only regulates the institution of the offer in Art. 1328 of the Civil Code, and the difference between these elements is 'only' developed by doctrine.[4]

It should be noted that the two hypotheses (withdrawal and revocation) differ in that in the first case the proposal is eliminated, even before it has become effective; in the second case of revocation, on the other hand, a manifestation of will already producing effects is eliminated.[5]

3. Art. 16: Revocation of the proposal

"As long as the contract has not been concluded, an offer may be withdrawn if the withdrawal reaches the offeree before the latter has made an acceptance.

However, an offer cannot be revoked:

(a) if it indicates, by setting a specified time for acceptance or otherwise, that it is irrevocable; or
(b) whether it was reasonable for the addressee to regard the offer as irrevocable and whether it acted accordingly."

As noted above, while Art. 15 governs the withdrawal of the proposal, Art. 16 governs the different institution of revocation.

From an initial and cursory analysis of that article, it might be thought that the uniform law discipline is aligned to the point of matching that of domestic law: although Art. 16(1) provides that a proposal may be revoked as long as the contract has not been concluded, it makes the effectiveness of the revocation conditional on the assumption that the same reaches the receiver, before it has sent its acceptance.

In fact, on closer inspection, the civil law discipline otherwise provides that the proposal may be revoked up to the conclusion of the contract, but Art. 1326(1) of the Civil Code provides that this moment occurs thereafter, i.e. when "the proposer has knowledge of the other party's acceptance"

Thus, if a person makes a contractual proposal relating to a contract of sale governed by the civil code he is free to revoke it until he has knowledge of the acceptance; if the contract is governed by the Vienna Convention, he may revoke it only until the contract is concluded, but the revocation reaches the offeree before he has sent the acceptance.

There are actually two situations in which the final moment by which the power of revocation is exercised actually coincides with the moment of conclusion of the contract.

The first hypothesis is, of course, that of a contract concluded orally: in this case there is undoubtedly contextuality between sending and receipt of acceptance.

The second hypothesis, which would in itself require more elaboration (unfortunately not compatible with the mould of the present article), when the addressee of the offer may manifest consent by means of an activity in the performance of the contract itself, pursuant to Art. 18 para.[6] Since the performance of that activity entails the conclusion of the contract, the power of revocation may only be exercised before the offeree performs that activity, which in effect replaces the declaration of acceptance.

This principle, however, has two exceptions, contained in the second paragraph of this article.

With reference to the exception provided for in Art. (a), it should be noted that in principle the fixing of a specific time limit does not in itself determine the irrevocability of the contractual proposal, but represents a presumption[7] of irrevocability. In that case, in order to avoid any uncertainty as to irrevocability, it is also advisable to include in the notice a formula such as 'this offer is valid and irrevocable until [date]'.or "our offer is still valid until [date].".

As to Art. (b) of that para. it provides that the proposal may not be revoked where the offeree has reasonably believed it to be irrevocable. It is important that, also for the purposes of proof, the offeree has actually acted accordingly, for instance by producing or designing the product, by purchasing raw materials, by entering into contracts functional to the business with third parties, by hiring seasonal workers, etc.[8]

4. Art. 17: irrevocable proposal.

"An offer, even if irrevocable, expires when its rejection reaches the offeror."

Since the offeror's power of revocation is an inconvenience for the offeree, who cannot rely with certainty on the conclusion of the contract on the terms indicated in the offer, in order to facilitate acceptance the principal may make its offer firm for a certain time. In such a case the offer is irrevocable until the expiry of the time limit.

But what happens if the offeree declares that he or she rejects the proposal.

The Convention regulates this issue clearly and explicitly in Art. 17, providing precisely that such notification (which must be made in the manner and according to the precepts briefly analysed above), entails the forfeiture of the offer.

This question is not, however, developed in our Civil Code; hence the problem of the fate of the irrevocable proposal once the offeror has refused it is debated (in doctrine). It therefore remains open whether the question should be resolved in the sense that the offeror would reacquire the right to revoke, or whether with the rejection the offeree consummates its power to accept, without the need for a revocation of the proposal in order to exclude the continuation of its effectiveness until the expiry of the time limit even after the rejection has occurred.[9]

5. Art. 18: acceptance of the proposal.

"A statement or other conduct of the recipient indicating assent to an offer constitutes acceptance. Silence or inaction alone cannot amount to acceptance.

The acceptance of an offer takes effect when the expression of consent reaches the author of the offer. The acceptance has no effect if it does not reach the author of the offer within the time stipulated by the offeror or, in the absence of such stipulation, within a reasonable time having regard to the circumstances of the transaction and the rapidity of the means of communication used by the author of the offer. An oral offer must be accepted immediately, unless the circumstances imply otherwise.

If, however, by virtue of the offer, custom or usage established between the parties the offeree may indicate that it accepts the offer by performing an act relating, for example, to the dispatch of the goods or the payment of the price, without giving notice to the author of the offer, the acceptance will take effect at the time when that act is performed, provided that it is done within the time limits set out in the preceding paragraph."

With reference to the first part of the first paragraph (concerning form), the principles of freedom of form art. 11 already briefly analysed above, which leave the offeree a wide choice in determining the manner of manifestation of consent (unless, of course, it has been derogated from by agreement or such derogation can be inferred from custom and usage).

With regard to the second part of the second paragraph, case law has recognised as conclusive behaviour Valid as acceptance: acceptance of the goods by the buyer; payment of the goods by the buyer; taking delivery of the goods by a third party; acceptance by the seller of a bank guarantee and commencement of production of the goods; issuance of a letter of credit; drafting and issuance of a pro forma invoice.[10]

The last part of this paragraph provides that inaction or the silence in themselves cannot constitute acceptance and therefore do not lead to the conclusion of the contract, unless of course this has been agreed between the parties or can be inferred from any usage or commercial practice between the parties.

Article 18 para. 1 has no immediate counterpart in the Italian legal system.

Indeed, although theArticle 1326 of the Civil Code does not deal with the modalities of acceptance, it is however settled case-law that acceptance may be expressed not only by a declaration, but also by any other conduct from which the person's negotiating intent may be inferred.[11]

Similarly, silence counts as a declaration when, having established a certain relationship between the parties, a common course of action or good faith imposes on the party the burden or duty to speak.^[12] Case law confirms this orientation, adding the possibility that, according to a given historical and social moment, having regard to the quality of the parties and their business relations, the silence of one may be understood as adherence to the will of the other.[13]

6. Revocation and pre-contractual liability: civil code.

Under civil law, revocation of consent is effective even if unjustified. Indeed, as noted above, the offeror may as a rule revoke its consent until it has had notice of the offeree's acceptance.

The principal who justifiably withdraws the proposal is (only) liable, formerly Art. 1328(1) of the Civil Code to indemnify the offeree for the costs and losses incurred by the offeree as a result of having unsuccessfully commenced performance of the contract before having notice of the revocation[14] (this provision of the Civil Code constitutes a case of blameless responsibility[15] and by lawful act).

When the withdrawal of consent is unjustified, it may give rise to pre-contractual liability[16] if it infringes a reasonable expectation (formerly Article 1337 of the Civil Code)[17] of the other party on the conclusion of the contract.[18] It is stated in case law:

"Where the contacts between two parties are not such as to lead to the conclusion of the contract because of the lack of unambiguous conduct, they may nevertheless constitute negotiations that have reached such a stage of development as to give rise to a justified expectation on the part of one party that the contract will be concluded; in such a case, unjustified termination gives rise only to pre-contractual liability, with the consequent obligation to pay damages. On the other hand, the conclusion of agreements on certain points of the contract to be concluded or partial agreements, in view of their provisional nature and their effectiveness subject to the positive outcome of the negotiations, do not go beyond the scope of the pre-contractual phase and certainly do not prove the conclusion of a contract.. "^[19]

Thus, while the Civil Code certainly does not impose a duty on the parties engaged in negotiations to conclude a contract, it does oblige them to conduct them according to good faithsuch as to give rise to a reasonable expectation that the contract would be concluded.

Regarding compensable damage, case law[20] holds, however, that (in contrast to contractual liability), only the so-called "liability" in negotiations (unjustifiably interrupted) is compensable. negative interest(1), i.e. the harm the person suffers for having uselessly relied on the conclusion of the contract; this interest may be relevant both in terms of the

emergent damage, i.e. the pecuniary loss that the person would have avoided if he had not relied on the conclusion of the contract (e.g. expenses incurred in the course of negotiations, wasted activity in negotiations), and of the
loss of profit, which the latter could have obtained for other contracts from which it was diverted.

Therefore, anyone who has vainly trusted in the success of a negotiation is entitled to be compensated for the loss of advantage he could have made if, instead of employing his activity in the failed negotiation, he had devoted himself to other negotiations from which he could have made a certain profit: in this respect he will have to prove the profit he would have made from the execution of other potential business, the subject of specific advanced negotiations that he then abandoned in order to cultivate the one that failed due to the impropriety of the other party to the negotiation.

7. Revocation and pre-contractual liability: Vienna Convention.

Whereas in the Civil Code, as has been seen, the need to protect the offeree against the offeree's (broader) power of revocation is realised by making the offeree liable for the offeree's expenses and losses incurred formerly Art. 1328 of the Civil Code and, possibly, to compensation for negative interest, in the event of the application of the Vienna Convention (which as we have seen anticipates the time by which the offeror may revoke the proposal at the time of dispatch of acceptance by the offeree) the matter becomes not a little complicated.

Indeed, doctrine is not uniform as to whether the Vienna Convention regulates pre-contractual liability or not. There is, however, a prevailing orientation, which holds that the Convention does not regulate this.[21] On the other hand, there are, however, numerous commentators who consider that the Convention is nevertheless applicable to 'preliminary agreements', at least to the extent that such agreements provide for the manner in which the final contract is to be performed.[22]

In fact, in order to understand (or at least approach) these apparently conflicting orientations, it would first be necessary to differentiate the hypothesis of liability for breakdown of negotiations from the breach of specific contractual provisions regulated by the parties in a preliminary contract.

In fact, according to part of the doctrine, if the parties have not signed a proper preliminary contract and the issue concerns the mere breakdown of contract negotiationsthe issue would appear to be (indirectly) regulated by the Vienna Convention. In fact, since Articles 15 and 16 of the Convention, as we have seen, expressly deal with the question of the revocability of an offer, the fact that the Convention does not provide for any protection for the offeree leads us to believe that such a revocation does not confer on that party any right to claim damages,[23] resulting in the inapplicability of the civil law protections analysed above.

Less clear, however, is the case where the parties have signed a preliminary contract and one party defaults, since, as noted above, the Convention does not regulate the institution of pre-contractual liability.

It is certainly important to understand, at first analysis, whether the individual relationship is or is not regulated by the Convention. In fact, if one were to espouse the thesis that the Convention does not apply to any pre-contractual relationship, it would be common ground to argue that this issue is necessarily governed by the common law rules applicable to the existing relationship.[24]

Otherwise, if one were to follow the thesis of part of the doctrine,[25] which asserts that certain preliminary contracts are governed by the uniform law, it must be understood whether or not in the event of a breakdown of transactions or any breach of contract by one party during negotiations, the party suffering the harm can make use of the instruments recognised by the Convention, which concern, precisely, the breach of a contract of sale and certainly not of a preliminary contract. If this thesis were to be followed, the indemnifiable harm would therefore be (in fact) contractual in nature, with consequent greater protection than under civil law (which provides, as we have seen, for more limited compensation in the case of pre-contractual harm).

Certainly, this problem does not arise where the action seeks to recover damages for harm the object of which is excluded from the scope of Art. 2(a), Art. 4 or Art. 5. (e.g. damage caused during negotiations by fraudulent activity).

All these problems and doubts relating to the application and applicability of the Convention certainly entail greater uncertainty for the parties when concluding the contract than if only civil law were to be applied to the relationship; this element should certainly be taken into account, trying (compatibly with the difficulties that companies face daily in international trade) to regulate them as carefully as possible, not only the sales relationship, but also its negotiation.

[1] MASTROMATTEO, La vendita internazionale, Giappichelli Editore, 2013.

[2] With reference to the quantification of the price, the present article merely points out that the provision under consideration would seem to be difficult to integrate with that of Art. 55 of the Convention, which anticipates: "If the sale is validly concluded without the price of the goods sold having been expressly or impliedly fixed in the contract, or by a provision enabling it to be determined, the parties shall, unless otherwise provided, be deemed to have tacitly referred to the price usually charged at the time of the conclusion of the contract, in the trade concerned, for the same goods sold in similar circumstances." Indeed, if the fixing of the price is a condition for the completion of the sale, it is difficult to admit that one can speak of a validly concluded contract without this determination, at least implicitly, having taken place. Precisely for this reason, most decisions have refused to apply Art. 55 Oberlandesgericht Frankfurt a.M., Germany, 15 March 1996, Bundesgerichtshof, Germany, 23 July 1997, Landgericht Alsfeld, Germany, 12 May 1995, Kantonsgericht Freiburg, Switzerland, 11 October 2004. On this point see. UNCITRAL Digest of Case Law on the United Nations Convention on Contracts for the International Sale of Goods, 2016 Edition.

[3] Case law holds that a statement can only qualify as a contractual proposal when it manifests a unambiguous will to commit and not merely a willingness or a wish, Cass. Civ. no. 6922 of 1982; VESSICHELLI, Commentary on Art. 14, at New civ. comm. laws, 1989, p. 51.

[4] Cf. BENEDETTI, From contract to unilateral transaction, Milan, 1969, 95.

[5] RUBIN, Commentary on Art. 15, at New civ. comm. laws, 1989, p. 51.

[6] Art. 18, third paragraph: "If, however, by virtue of the offer, custom or usage established between the parties the offeree may indicate that it accepts the offer by performing an act relating, for example, to the dispatch of the goods or the payment of the price, without giving notice to the author of the offer, the acceptance will take effect at the time when that act is performed, provided that it is done within the time limits set forth in the preceding paragraph. "

[7] MASTROMATTEO, op. cit.

[8] FERRARI, sub Article 16, International Sale of Goods tome II, in Commentario del codice civile Scaiola-Branca, edited by Galgano, 2006.

[9] On this point, see Pluris online, Annotated Civil Code, Article 1329 of the Civil Code, Wolters Kluwer, 2021.

[10] On this point cf. Unicitral digest of Case Law, sub. art. 18, 2016 Edition.

[11] Cf. Civil cassation 2003, no. 3341, which states that it is the task of the court of merit to identify and value elements from which to deduce a tacit manifestation.

[12] BIANCA, op. cit.

[13] Cass. Civ. 2014 No. 10533.

[14] On this point, see BIANCA, Civil Law, The Contract, Giuffrè, 1987.

[15] Cass. Civ. 1952 no. 1729. CIAN - TRABUCCHI, Short Commentary to the Civil Code, sub. art. 1328, CEDAM, 2014.

[16] See Cass. Civ. 1786/2015; Cass. Civ..1051/2012; Cass. Civ. 11438/2004.

[17] Art. 1337 of the Civil Code "The parties, in the conduct of negotiations and in the formation of the contract, must behave in good faith'.

[18] Cf. BIANCA,

[19] Cass. Civ. 1999 no. 5830.

[20] See on this point Cass Civ. 24795/2008, Cass Civ. 1632/2000.

[21] DIMATTEO - International sales law. A global challenge, Cambridge, 2014.

[22] TOWER - Preliminary Agreements and CISG Contracts, at Drafting Contracts under the CISG, p. 191 ff., 2008.

[23] FERRARI - Kommentar zum Einheitlichen UN-Kaufrecht, Art. 5, 2009.

[24] On this point, it should be noted that under European law, Article 12 of the Rome II Regulation states that: "The law applicable to non-contractual obligations arising out of pre-contractual negotiations, whether or not the contract has actually been concluded, is the law that applies to the contract or that would have been applicable to the contract had it been concluded." Thus, while the problem of identifying the applicable law for culpa in contrahendo does not arise in the case of application of European law, the same certainly cannot be said in the case the contractual relationship is (or may be) subject to a regulation extra-EU.

[25] TORSELLO, op. cit.

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International trading and the importance of customs and traditions: Vienna Convention and Civil Code compared.

It is often overlooked that a contractual relationship is not solely governed by the text that the parties have (possibly) agreed upon and that the transaction must be interpreted on the basis of the conduct of the contracting parties before and after conclusion, as well as that the same may be supplemented by any customs and habits practised in the commercial sphere where the contracting parties operate.

The subject of the integration of the contract is, of course, regulated by both the Vienna Convention (CISG) and the Civil Code, with differences that are certainly not negligible; the choice of whether or not to apply the Convention to a given relationship has rather significant practical repercussions that are briefly analysed below.

1. Vienna Convention

Article 9 of the Vienna Convention states that:

"The parties are bound by the usages [practices] to which they have agreed and by the customs [usages] established between them.

Unless the parties have agreed otherwise, they shall be deemed to have tacitly referred in the contract and in its drafting to any usage of which they were or ought to have been aware and which, in international trade, is widely known and regularly observed by the parties in contracts of the same kind, in the trade concerned. "

According to this provision, the parties to an international sales contract are bound by both customs ("practices"), as well as to practices ("usages"), which the contracting parties have (expressly or implicitly)[1] established between them. Although the convention does not define the concepts of usages e practicesthey can be translated as follows:

"practices"with individual customs, i.e. commercial practice[2] established between the contracting parties in their previous contractual relations;[3]
"usages", with negotiated usages, or customs, understood as conduct normally practised in a certain commercial sphere, with the belief that it is binding conduct.

According to Art. 9 para. 1 of the CISCG, both the "practices", that the "usages" do not have a mere interpretative value, but must even be considered an integral part of the contractual relationship, albeit subject to certain limitations and conditions, which will be analysed below. Before doing so, for the sake of clarity, some "practices" that were deemed applicable between the parties:

the obligation of a seller to promptly deliver spare parts to the buyer, based on the practice that had been established between them;[4]
it was held that a seller could not invoke the rule in Article 18 CISG that silence does not amount to acceptance, given that the parties had established an internal practice whereby the seller executed the buyer's orders without the need for express acceptance;[5]
in another case, also for the purpose of reporting defects, it was decided that the purchaser was bound to a certain manner of examining the delivered goods on the basis of a practice that had been established over time.

But when are such practices?

First of all, it is necessary to understand whether a real ''relationship'' has actually been established between the parties.practice" and, in order to do so, it is necessary that the particles have been conducted with such frequency and over such a period of time as to cause the party invoking them to believe and presume in good faith that they would be perpetuated over time.[6]

Once this 'preliminary' element has been ascertained, it is indeed necessary to verify whether there are any contractual provisions between the parties that exclude their applicability, or whether there are contractual agreements that are in fact contrary to the practice allegedly established between the contracting parties.

In fact, although according to a jurisprudential orientation[7] usages and customs would even derogate from the provisions of the Convention, if the parties have excluded their application, or have inserted clauses that in fact conflict with them, negotiated agreements would prevail over usages. This principle follows from Article 6 of the CISG, according to which the will expressed by the contracting parties is the primary source of the rights and obligations arising from contracts concluded under the CISG.[8]

Thereafter, the onus will be on the party claiming its existence to prove the required elements,[9] with the consequence that in the event of failure to do so, custom and practice will not be binding between the parties.

Once its existence has been proven under the Convention, its legitimacy must be assessed according to the domestic law applicable in each case, so that the validity of usages does not fall within the scope of the Convention, which only regulates the criteria for their applicability.[10]

As for commercial uses (usages), which, on the other hand, are those customs that are normally practised in a certain mercantile environment, the parties are bound to them, pursuant to Art. 9(2), even in the absence of an express agreement transposing them, provided that they "were or should have been aware'..

As a general rule, international trade usages should only be considered binding if they are widely known to the parties, or if they are regularly observed in international trade.[11] It should also be noted that for a usage to be binding it does not have to be international, but local usages used e.g. in stock exchanges, trade fairs, warehouses, may also be applicable to the relationship, provided that they are also regularly applied in transactions involving foreign contracting parties.[12]

One decision was even held that the usages are automatically included in any agreement governed by the Convention unless expressly excluded by the parties.[13]

Also for the usages, the principle applies that they (if applicable) derogate from the provisions of the Convention that differ therefrom, but not from conflicting contractual agreements, contractual autonomy being the primary source of the rights and obligations of the parties.

As to the burden of proof, it is held that there is no difference in the allocation of the burden of proof under Art. 9(1) and (2), since the party claiming the existence of usages or practices binding, it must nevertheless prove the elements required by it.[14]

2. Civil Code

Certainly less linear and decidedly more complex is the civil law regulation of usages and customs, which are categorised into:[15]

Regulatory usesgoverned by arts. 1 and 8 of the lexis. These are all the unwritten rules that a given social environment consistently observes over time as legally binding rules.[16] Such usages apply to matters not regulated by laws or regulations, or to the extent to which they are referred to therein.
Contractual Uses, negotiations or usage clauses, as referred to in Art. 1340 of the Civil Code. To be understood as practices as commonly and consistently observed in contractual transactions in a given place or branch of trade. Such usages may be equated with "usages' referred to in the Vienna Convention.
Individual uses, are the practice established in relations between certain parties and relevant to the interpretation of the contract, pursuant to Art. 1362(2) of the Civil Code (assimilated to the "practices"of the CISC).

While understanding in detail the distinction between regulatory uses and contracts would certainly require a more careful and thorough examination, but for the purposes of the present article, it may be simplified by stating that the statutory usages are those applicable whenever the law refers to them (e.g. in the matter of sale, Art. 1498, para. 2 of the Civil Code on the manner of payment of the price), or when there are matters not regulated by the law itself, in which case they play an integrative function (usages praeter legem).

The negotiated uses on the other hand, are generalised business practices that are intended to be included in the contract if it does not appear that they were not intended by the parties (Art. 1340 Civil Code).[17] Such usages may, for instance, provide for the variability of the quantity or quality of the goods within certain tolerance limits, or the obligation to return the containers of the goods bought and sold, or the possible acknowledgement of a performance guarantee; in the international sphere, the uniform rules and usages of the International Chamber of Commerce in the field of documentary credits have been regarded as negotiating usages.[18]

Moreover, unlike statutory usages, negotiated (or contractual) usages apply without the need for a statutory reference: the law contains, in fact, in Art. 1374 of the Civil Code (integration of the contract) a general reference to usages as a source of integration of the contract, since the parties are bound by what is determined by the agreement and by all the consequences arising therefrom according to the law or, failing that, according to usages.

A first and important difference is related to the fact that negotiated uses (as opposed to usages which are applicable whenever the same were known or knowable to the parties at the time of the conclusion of the contract) in civil law the jurisprudence is not in agreement as to whether they can be deemed to be incorporated into the contract only by virtue of an express or tacit manifestation of the parties,[19] or whether the uses oblige the parties even if ignored by them.[20] It may, however, be reasonably argued that such usages are also effective in derogation of (obviously non-mandatory) statutory provisions, but that they must be excluded in the event of a contrary, agreed will of the parties, even if tacitly expressed.[21]

Negotiated uses must also be distinguished from individual usesi.e. the practice established in relations between certain contracting parties (the practices of the CISG).

Very important to note that, contrary to the practices, the internal practice of the contracting parties is only relevant for the interpretation of the contract, as the overall conduct of the parties (Art. 1362 para. 2 CC),[22] but does not also incorporate its contents under Article 1340 and Article 1374 of the Civil Code.[23]

It follows, therefore, that unlike Art. 9 of the CISC, the bargaining practice established between the parties cannot have the value of an actual contractual clause forming an integral part of the relationship, but can only be used as an element to interpret the contract. Difference, far from negligible.

One way of nevertheless attempting to pursue the same result, i.e. to integrate a given individual practice within the relationship, would be to have recourse to the principle of equity, referred to in Article 1374 of the Civil Code, which provides as follows:

"The contract binds the parties not only to what is expressed therein, but also to all the consequences arising therefrom according to law, or, failing that, according to usage and equity the parties shall be bound by it. uses and theequity. "

Using this principle, coupled with the principle of performance in good faith of the contract under Art. 1375 of the Civil Code, one could possibly attempt to argue that the continued and repeated conduct of one party has engendered in the other the expectation that the same would be repeated.

Certainly, such a solution would still be much more complex and difficult to implement than if the Vienna Convention were to apply to the relationship, given that the provisions of Article 9 are certainly much clearer and easier to interpret in this respect.

[1] Oberster Gerichsthoff 21 March 2000.

[2] See DE FRANCHIS, Dizionario Giuridico Itailano-Inglese, Giuffrè Editore,

[3] BUSANI, The International Sale and Purchase Agreement, p. 97 et seq., 2015, Giappichelli

[4] Court of Arbitration of the International Chamber of Commerce, France, December 1997 No. 8817,

[5] Cour d'appel de Paris, France, 10 September 2003

[6] UNCITRAL: Digest of Case Law on the United Nations Convention on Contracts for the International Sale of Goods-2016 UNITED NATIONS 2016 Edition.

[7] CLOUT case no. 313, Cour d'appel de Grenoble, France, 21.10.1999.

[8] See Hof van Beroep Antwerpen (Belgium), 24 April 2006; BUSANI, op. cit.

[9] Oberster Gerichtshof, Austria, 21 March 2000.

[10] Oberster Gerichtshof, Austria, 22 October 2001.

[11] UNCITRAL: Digest of Case Law on the United Nations Convention on Contracts for the International Sale of Goods-2016 UNITED NATIONS 2016 Edition.

[12] Oberlandesgericht Graz, Austria, 9 November 1995.

[13] U.S. District Court, Southern District Court of New York, 10 May 2002.

[14] UNICITRA Digest. Op. cit.

[15] For the sake of simplicity, no further categories, such as interpretative uses and business uses, are included in this article.

[16] BIANCA, Civil Law, The Contract, 1987, Giuffrè.

[17] BIANCA, op. cit.

[18] Cass. Civ. 2009, no. 21833

[19] Cass. Civ. 2010 no. 8342.

[20] Cass. Civ. 2007 no. 5135.

[21] Cass. Civ. 2007 no. 5135; Cass. Civ. 1988 no. 76.

[22] CIAN - TRABUCCHI, Commentary on the Civil Code, Art. 1340, CEDAM.

[23] Cass. Civ. 1988 no. 3220.

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The scientific informant: employee, agent or self-employed?

The sales representative is the person who acts as a highly qualified intermediary between the pharmaceutical company and those responsible for administering the drug (be it the doctor, the hospital or the pharmacy).

Although Italian jurisprudence has not entirely ruled out the applicability of agency rules to this figure, it has limited its application.

Below are some tools for understanding whether and when a sales representative should be classified as an employee, agent or self-employed person.

Sales promotion and intermediation in the pharmaceutical market is characterised by significant peculiarities. One of the main elements of atypicality of the sector is certainly to be found in the fact that the recipients of pharmaceutical products are the patients, whose relationship with the companies is, however, mediated by a third party (the doctor, the hospital or the pharmacy) to whom the legal system attributes, for a large number of drugs, the exclusive function of identifying the most appropriate therapy through prescription.

The activity of connecting the pharmaceutical cause with the person in charge of administering the drug is largely carried out by the pharmaceutical sales representative (also known as the pharmaceutical propagandist).

The pharmaceutical sales representative is regulated in our legal system by the Legislative Decree 219/2006 Art. 122This rule requires the person carrying out this activity to possess a university degree in the scientific disciplines that are strictly listed, as well as the obligation for each pharmaceutical company to notify the Agency by January of each year of the list of scientific representatives employed in the previous year.

Examination of this legislation does not reveal an obligation for pharmaceutical companies wishing to use a sales representative to classify that person as an employee, since they are free to adopt either a subordinate employment contract, an agency contract, or a self-employment contract, depending on the actual manner in which the relationship is carried out.[1]

Below are some hints and tools for understanding whether and when a sales representative should be considered an employee, agent or self-employed person.

1. Employee or agent?

Given the absolute openness of jurisprudence in holding that the scientific informant can be freely classified as an employee,[2] Should the parties choose to adopt such discipline, the applicability of the rules on agency to the relationship must certainly be excluded.

If, on the other hand, the relationship should be classified as an agency, in order to verify whether it has been correctly classified, it will be necessary to verify, in the concrete case, the actual content of the services rendered, taking into account the real attitude of the parties; in practice, ascertaining whether or not there is an effective subordination of the scientific informant to the hierarchical and disciplinary power of the entrepreneur, as well as an assumption of the risk of the activity.[3]

A rather dated cassation (Court of Cassation Civ. 1992 No. 9676), but not for this reason still not relevant today, maintained that the activity of scientific informant can take place both in the context of a self-employed employment relationship and in that of a subordinate employment relationship, pointing out how in the case of the 'agent' propagandist the relationship is characterised by aresult obligationand, in the second case, of means. Indeed, it is stated that

"depending on whether the performance of the activity is characterised - by the manner in which it is carried out - as a mere result or as provision of working energies with the insertion of the propagandist into the production organisation of the entrepreneur and subjection to the instructions given by the latter'.

In particular, it is stated by the Court that:

"from the aforementioned activity - which (carried out autonomously or subordinately) consists in persuading potential customers of the advisability of purchasing, informing them of the product and its characteristics, but without promoting (if only marginally) the conclusion of contracts - differs the activity of the agent, who, in the context of an obligation not of means, but of result, must also promote the conclusion of contracts, his remuneration being directly linked to these and commensurate with them. "

A further element that will have to be taken into account for a correct framing of the relationship certainly concerns the way in which the sales representative is remunerated. If this subject's remuneration is in no way parameterized to the sales that are made by the principal in his area, and that, therefore, the economic risk is passed on in full to this subject, it will certainly be much more complex to sustain his classification within the discipline of the agency, or in any case of a self-employed relationship.

2. Agent or self-employed?

Generally speaking, although Italian case law has not entirely ruled out the applicability of the agency rules to the pharmaceutical sales representative, it has limited its application.

The starting point of this interpretation process is the definition of 'agency' in Art. 1742 of the Civil Code, where among the characteristic services of the commercial agent is that of promoting contracts. It reads:

"With the agency contract one party permanently assumes the task of promoteon behalf of the other, towards remuneration, the conclusion of contracts in a given area. "

If, on the other hand, one analyses the activities of various scientific informants, one can see that they (and hence also the name) mainly carry out not so much the activity of promotion, but that of (different) propaganda.

To distinguish the two activities, it can be simplified by pointing out that thepropaganda activities consists essentially in illustrating, albeit also in a very analytical, detailed and scientific manner, the qualities of a given product (in this case a drug), while extolling its qualities and characteristics that distinguish it from its competitors.

On the other hand, thepromotional activitiesand consists, instead, of a series of activities aimed at stimulating demand for a product, such as, for example, launching promotional campaigns, developing marketing strategies, etc.

Therefore, on the assumption of the significant difference between these types of activities, some case law has held that the mere propaganda carried out by a scientific informant, by means of visits to doctors or medical managers,

"in order to promote the adoption of the drugs they represent should be considered as an atypical relationship, non the scheme of an agency relationshipin view of the fact that the propagandist, in addition to not entering into any contracts with clients of the publishing house, does not even carry out any activities aimed at concluding contracts, this event being external to the advertising activity and, moreover, eventual. "[4]

In particular, the Court of Cassation held that the activity of promoting the conclusion of contracts on behalf of the principal, which constitutes the agent's typical obligation, cannot consist in a mere propaganda activity, from which an increase in sales may only indirectly derive, but must consist in convincing the potential customer to place orders for the principal's products, since it is precisely with regard to this result that the agent is awarded the remuneration, consisting in the commission on contracts concluded through him and successfully concluded.

There is a further problem, or perhaps it is better to say that this problem is exacerbated and becomes even more glaring when the pharmaceutical sales representative works for hospitals or public health agencies. In that case, part of the case law even considers that the existence of a promotional activity should be ruled out a priori, since the intermediary who comes into contact with public bodies cannot in any way convince the P.A.. to order the product, in view of the constraint of administrative procedures of public evidence for the conclusion of contracts. "[5]

In other pronouncements, especially in so far as the scientific informant simultaneously performs the typical tasks of the agent, it has been held that the activity of advertising, although it cannot in itself constitute the typical activity of the agent, does integrate the prerequisite of promoting the conclusion of contracts.

It is considered appropriate to quote below an excerpt from a pronouncement of the Court, in which it is noted that, although the agent's services consist of acts of varied and non-predetermined content that all tend to promote the conclusion of contracts, the typical activity of the commercial agent does not require:

necessarily the search for the customer and is always attributable to the service under the agency agreement even when the customer, from whom the contract proposal submitted by the agent originates, was not directly sought by the agent but was acquired on the principal's instructions (or in any other way), provided that there is a causal link between the agent's promotional activity vis-à-vis the customer and the conclusion of the transaction to which the claim for commission relates.

In any event, for an agency contract to exist it is not necessary for the agent to be able to fix prices and discounts and in any case to modulate the conditions of the service to the particular needs of the clients of the service itself, since the standardisation of the sales conditions can make the action of advertising preeminent over that of preparing and setting up the contract. "[6]

It can therefore be concluded that the propaganda is a component of the promotion, considered by Art. 1742 of the Civil Code, and that it is sufficient to supplement it when it resumes, combined with other tasks typical of the agent, the function of organising and developing the placement of the product, so as to attribute to the agent the role of effective intermediary between the company and its customers, also by means of a mediated solicitation of the possible purchasers of the good or service.

In other words, the existence of an agency contract cannot be excluded a priori merely because the promotion of contracts is addressed to different persons to final customers (i.e. those persons who make the purchase of the good or service), it being necessary in the present case to ascertain whether the person performs an actual sales promotion activity, even if of an indirect nature.

____________________________________________

[1] On this point see Venezia, Il contratto di agenzia, p. 667, 2020, Giuffrè.

[2] Cass. Civ. 2006 no. 4271, Cass. Civ. 2001 no. 9167.

[3] Cass. Civ. 2009 no. 9696, "The distinctive element between the agency relationship and the subordinate employment relationship is to be found in the circumstance that the former has as its object the performance in favour of the principal of an economic activity exercised in an entrepreneurial form, with organisation of means and assumption of risk by the agent, which is manifested in the autonomy in the choice of the times and modes of the same, albeit in compliance - according to the provisions of Art.Article 1746 c.c. - of the instructions received from the principal, whereas the subject-matter of the second is the performance, under a regime of subordination, of working energies, the result of which falls exclusively within the legal sphere of the entrepreneur, who bears the risk of the activity carried out." Cass. Civ. 2008 no. 21380.

[4] Cass. Civ. 2006 no. 3709.

[5] Cass. Civ. 2008 no. 18686.

[6] Cass. Civ. 2018, no. 20453.

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Selective online distribution: the Amazon.it case.

1. Selective distribution: the regulatory and jurisprudential context.

Based on the assumption that the goal of every manufacturer is to maximise its profit, there are cases in which this goal can only be achieved by restricting access to the official sales network to distributors and resellers with special requirements, so as to protect the image of excellence and product quality.

This tends to be the case for technically complex products - for which customer service is particularly important - and the manufacturer believes that the certainty of an adequate service can positively influence the purchaser's choices, or in the case of beauty or fashion products, where the protection of the product's image or prestige may be considered essential in order not to dissuade the consumer from purchasing a product that is offered together with goods of much lesser value.[1]

Here is the manufacturer's interest in creating a selective distribution within which, each authorised member undertakes to sell the contractual goods or services only to distributors selected on the basis of predetermined criteria, in order to safeguard, in the consumer's perception, the aura of exclusivity and prestige of the products, thanks precisely to a presentation of the goods to the public that enhances their aesthetic and functional specificity.

Although selective distribution is abstractly capable of restricting competition on the market (thus contrary to theArticle 101(1) TFEU), it is nevertheless regarded as a legitimate selling method (pursuant to Article 101(3) TFEU) provided that:

the characteristics of the products actually require a selective distribution system, in view of their high level of quality and technologyin order to preserve their quality and ensure their proper use;
the choice of dealers is made according to objective criteria of a qualitative nature, established indiscriminately for all potential resellers and applied in a manner non-discriminatory;
the system proposes a result apt to improve competition and thus counterbalance the restrictions on competition to the same;
the criteria imposed do not go beyond what is necessary.[2]

Under these conditions, therefore, a selective distribution system is permissible.

The first and main advantage (linked in fact to the very essence of selective distribution itself) is the fact that in such a system, the manufacturer may oblige those belonging to the network and, therefore, bound to it by a contractual relationship, not to promote sales to parties (other than end users) not belonging to the network (Art. 4(b)(iii)), subject however to the possibility of sales cross between authorised members (Art. 4(d)).[3] Therefore, in the event of a breach of contractual obligations, the manufacturer will have the possibility of retaliating against the non-performing member by resorting to the remedies typical of breach of contract.

On the other hand, as far as relations with parties outside the network are concerned, with whom the producer by definition has no contractual relationship, it can now be affirmed without hesitation that the producer has the right to seek injunctive relief against the parallel distributorsif, and only if, the manner of resale is such as to damage the image of luxury and prestige - which the manufacturer seeks to defend precisely by adopting a selective distribution system - or if there is a confusing effect as to the existence of a commercial link between the proprietor of the trade mark and the unauthorised reseller.

As is well known, thearticle 5 c.p.i. - which in its first paragraph lays down the so-called principle of exhaustion, in its second paragraph provides for an exception, stating that the holder of an industrial property right may, if there are legitimate reasons, oppose the further commercialisation of its products already on the market, in particular if their condition is changed or altered; it is now common ground that selective distribution falls within this exception.[4]

The application of these principles to sales onlineThis has led to the consolidation of a guideline that considers unlawful, as constituting a serious restriction of competition, a contract that absolutely prevents the sale via web[5] and that a restriction on the distribution online would only be lawful if it aimed to make authorised dealers of a selective system comply with certain quality standards with the main purpose of safeguarding the image of the contractual products.

Given that online sales have been de facto 'cleared' by European jurisprudence, albeit with the limitations mentioned above, a further issue has arisen, namely whether parallel distributors can also claim the right to make sales via web. A recent judgment of the Court of Milan - applying the principles already well established in the field of 'traditional' sales - held that in relations extra-contractualthe proprietor of exclusive property rights, may only block sales to persons outside the selective sales network if there is actual prejudice to the luxury or prestige image of the trade mark, thus affirming that the failure to distinguish by a maerketplace (in this case amazon.co.uk) between luxury and inferior products can confuse the consumer and damage the prestige of the brand.[6]

2. The case Shiseido v. Amazon.

With order of 19 October 2020 (currently the subject of a complaint), the Court of Milan again confirmed its orientation, upholding the appeal brought by the licensees of trademarks including "Narciso Rodriguez" e "Dolce & Gabbana" for the manufacture and marketing of perfumery and cosmetics products, preventing 'amazon.it' from promoting and offering for sale products bearing its trademarks, which are the subject of selective distribution agreements.

The Court of Milan, in order to verify the existence of the fumus boni iurisIt established the existence of the following three requirements:

if the products in question could qualify as luxurious;
if the selective distributionof the applicant was legitimate;

if the off-network sale would bring an effective damage to the reputation of the trade mark.

2.1. Ascertaining the luxury category of products.

The examination of this requirement was carried out, in this case, on the basis of quality indexes, finding, with reference to the trade marks 'D&D' and 'Narciso Rodriquez':

"the search for high quality materials, the care for packaging [...], the public presentation promoted at publicity level by personalities from the entertainment industry, the wide accreditation in the sector of reference deducible from [...] awards obtained, the consolidated recognition by the specialised press".

The Court, on the one hand, held that such serious, precise and concordant evidence, pursuant to Article 2729 of the Civil Code, proved that such fragrances belonged to the high-end category (reserving the right to conduct a more detailed investigation at the merits stage) and, on the other hand, again using the same indices and parameters of assessment, declared that the aura of luxury had not been sufficiently proven with reference to the marks "Iseey Miyake", "Elie Sahh" e "Zadig&Voltaire', thus placing these fragrances in the high-end category.

2.2. Verification of selective distribution contracts.

After verifying the aura of prestige of the products in question, it was necessary to verify the actual existence of selective distribution.

According to European case law, in order to benefit from the exemptions of Article 101(3) of the Treaty, it is not sufficient that a manufacturer has made a significant promotional effort in favour of high-end products, but also the conclusion of agreements that effectively impose on other independent economic operators obligations restricting their freedom of competition, since, otherwise, each manufacturer could justify the use of a selective distribution system only on the basis of the promotional activities carried out, so that any restrictive infringement criterion would be justified by the fact that it was necessary to protect the marketing strategy desired by the manufacturer.[7]

Moreover, once the existence of a selective distribution system has been verified, according to a recent orientation of the Court of Appeal of Milan, the producer may only claim the advantages deriving from it, and thus derogate from the principle of exhaustion, if, in application, the existence of an effective vigilance exercised on the market by the manufacturer.[8]

In the present case, the Court analysed the clauses of the contracts and verified that the obligations imposed on authorised dealers appeared to be aimed solely at protecting the luxury aura of the trade marks, having been applied "objective, qualitative, non-discriminatory criteria proportionate to the luxury character of the products distributed" and therefore "confirms the regulatory and jurisprudential principles cited'.

In particular, limitations on brand and sign positioning, sales and advisory service, sales methods, use of advertising material, qualification of sales personnel and customer care were deemed appropriate.

The contracts provided for further restrictions on how sales could be made via internet, as only authorised dealers are allowed to carry out such activities. availability of at least three physical points of sale and only after specific authorisation by the licensee, who, once the admission procedure had been activated, still had to set up and operate the site in accordance with the contractually imposed standards (graphical quality of the site, quality space dedicated to competing luxury products of the same level, absence of products other than perfumery or beauty products).

The General Court held that the limitations imposed by Shiseido on its authorised retailers, including making the use of e-commerce conditional on the availability of at least three physical points of sale, did not appear to go beyond what was necessary, in view of the fact that (with reference to the requirement of physical points of sale) the same is admitted by the European Commission itself in paragraph 54 of the Guidelines of the Exemption Regulation.

2.3. Brand reputation bias.

The last element to be ascertained by the Court, which is necessary for the application for an injunction to be granted, is the existence of a concrete injury to the holder of the patent rights, since it is not sufficient to merely note the circumstance that the unauthorised seller does not comply with the standard imposed on authorised dealers.

Indeed, case law requires that the specific manner of sale must concretely damage the prestige of the trade marks in order for the proprietor to prevent the unauthorised reseller from further resale.[9]

For the purposes of the injury determination, Amazon was challenged:

the absence of physical shops (relevant for the products in question, i.e. fragrances and cosmetics, also for possible allergy testing of products),
the lack of a customer service concept similar to that provided in the real shop with the presentation of a capable person,
the combination of the perfumes in question with other heterogeneous, non-luxury products (toilet paper, insecticides),
the presence of advertising material of products of other brands, even of lower market segments, on the same Internet page where the perfumes in question are present.

Of particular interest is the fact that the General Court thus held that it was not so much the fact that other, even non-luxury products were sold within amazon that was decisive, but rather that in the same virtual space (web page), heterogeneous goods were presented, thus applying a well-established orientation of European case law to the 'virtual'.

In particular, the European Court of Justice had confirmed the possibility for entities outside the network to sell contractual products in multi-brand shops (in this case a hypermarket), provided that the sign of the retailer does not devalue its luxury image and the sale is made in a reserved department or space in order to enhance the qualities of the products.[10]

Applying this principle to the virtual means, in practice, having to ascertain not only that the good is sold in a 'proper' manner, reserving a virtual space appropriate to its allure luxury, but also that it is promoted and sold on a marketplace or e-commerce whose signage does not devalue its image.

3. Amazon is an 'active' hosting provider

An element of absolute importance is the fact that the Court in this order established the nature of Amazon as an 'information society service provider' within the meaning of the Directive No. 2000/31/EC (on this point see also the legal nature of online platforms: the Uber and Airbnb cases) and, in particular, recognising that subject's role as an 'active' hosting provider in relation to the activity of managing its own sales portal, even where the same is limited to the provision of intermediation services, i.e. it does not carry out active sales activities within the site, but as a provider of services to third parties using the platform to promote sales.[11]

The Court, in particular, established Amazon's role as an 'active' hosting provider,[12] and as such not subject to the liability exemptions outlined by Articles 14, 15 and 16 of Directive 2000/31/EC, in view of the fact that the platform (i) '(i)manages the storage and shipment of products", (ii) "operates a customer service for third-party sales listings, which is the only service the customer has to interface with the seller", (iii) "is also responsible for promotional activity through advertisements on third-party websites" and (iv) "allows consumers to infer the existence of a link between Amazon"and the companies producing the products sold on the platform.

4. Some reflections

The judgement that is the subject of this brief commentary now aligns with a well-established jurisprudential orientation that, in fact, reflects the reality of commerce today, namely a steadily increasing thinning between in-store shopping experience and online.

One can understand how the online distribution of luxury and high-end products will be less and less able to disregard the careful and rigorous care of sales methods and adhere more and more to strict standards that in physical shops are now taken for granted, not only from a legal point of view, but (above all) from a cultural point of view.

Indeed, it would not even be conceivable that a designer shop could sell a high-fashion dress together with a packet of toilet paper, which still regularly happens online, without causing such a stir for the consumer, who is perhaps more focused on the price and not on the online shopping experience.

This element will increasingly have to be taken into account by manufacturers in their sales strategies

Such a ruling, read a few years from now, will probably raise eyebrows, as a user cannot even imagine that within the same (virtual) shop a high-end perfume could be sold in the same manner and on the same page, together with liquid plumber.

[1] On the subject, Pappalardo, The Competition Law of the European Union, p. 405 ff, 2018, UTET.

[2] On this point see ECJ, 12 December 1996, Galec v. EC Commission, para. 16, ECJ, 13 October 2011, Pierre Fabre Dermo-Cosmetique, para. 41, EU Guidelines Reg. 330/2010, para. 175.

[3] In this regard, reference is made to what the Court of Justice stated in the case Metro-Saba IJudgment of 25.10.1977, at para. 27 ".Any sales system based on the selection of distribution points inevitably implies - otherwise it would make no sense - the obligation for wholesalers who are part of the network to supply only authorised retailers.

[4] Orders of 19 November 2018 and 18 December 2018 of the Court of Milan. with comment by Alice Fratti

[5] Court of Justice case, Pierre Fabre C-439/09.

[6] Court of Milan, 3 July 2019, with comment by RIVA, E-commerce and selective distribution agreements: the case 'Sisley v. Amazon', in Industrial Law, 1/2010, WoltersKluver.

[7] ECJ, 12 December 1996, Groupement d'achat Eduard Leclerc v. Cmmission, para. 111; see also Vichy v. Commission, judgment.

[8] Court of Appeal Milan, 25 November 2019, no. 5682.

[9] Court of Justice, 4 November 1997, Dior v. Evora.

[10] ECJ, 12 December 1996, Groupement d'achat Eduard Leclerc v. Cmmission.

[11] On this point, see also Traina Chiarini, Amazon is an 'active' hosting provider, according to the Business Court of Milan.

[12] To be contrasted with the passive hosting provider who, according to recital 42 of Directive 31/2000/EC, is to be qualified as such any service provider who does not exercise 'authority or control' and has a merely 'technical, automatic and passive role' and who 'neither knows nor controls the information transmitted or stored'.

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Agency agreement and waiver in peius of the AEC.

Seppure l’agente di commercio rientra nella categoria dei lavoratori autonomi, la giurisprudenza maggioritaria non ritiene doversi escludere l'applicabile a tale rapporto della disciplina di cui all’art. 2077 c.c., che stabilisce l'inderogabilità in peius dei contratti collettivi ad opera delle parti. Pertanto, in caso di applicazione al contratto degli AEC, un eventuale contrasto tra disciplina collettiva e quella risultante dal contratto individuale, prevarrà quella individuale solamente se più sfavorevole all’agente. Si registrano comunque orientamenti giurisprudenziali e dottrinali difformi, che propendono per la validità di una pattuizione individuale peggiorativa rispetto alla disciplina collettiva di diritto comune.

____________________________

In the Italian legal system, the figure of the agent operating as a natural person, for both historical and cultural reasons, is very peculiar, such as to have led doctrine and jurisprudence to frame it in the tertium genus of worker "parasubordinate".

On this point, it suffices to recall that institutes typical of salaried employment are applied to this figure, such as the notion of just cause under Article 2119 of the Civil Code, the discipline of waivers and settlements under Article 2113 of the Civil Code, as well as the devolution of disputes to the labour court expressly provided for by Article 409 of the Code of Civil Procedure.

To make matters even more 'hybrid', there is certainly the application of collective economic agreements to the agency contract, which occurs whenever:

both parties (i.e. both the agent and the principal) are members of the contracting trade unions;
there is an express reference to AEC in the agency agreement;
there is a tacit reference, i.e. whether the continuous and constant application of the AEC rules by the contractors can be inferred.[1]

The question therefore arises as to whether, since collective agreements can be assimilated to collective labour agreements, it is correct or not to extend to the former the discipline of the latter, with particular reference to the rule in Article 2077, paragraph 2 of the Civil Code, which provides that:

"Differing clauses in individual contracts, whether pre-existing or subsequent to the collective agreement, shall be superseded by those of the collective agreement as of right, unless they contain special conditions that are more favourable to employees."

This rule prohibiting derogation in peius is designed and is compatible with the privatist principles of collective bargaining, which are aimed at subjecting the subjects represented by the stipulating associations to a common discipline and at removing the regulation of certain relationships from the excessive influence of employers.

In any event, while there is an effective applicability of certain labour law institutions to the discipline of the agent, the figure of the agent (especially as conceived by the European Directive 86/653) must certainly be included in the category of the self-employed, since he assumes the risk of the useful result of his activity, in contrast to the employee who transfers this risk, through the security of his salary, to his employer.

In essence, the collaboration performed by the agent is carried out under a regime of full autonomy, whereas that performed by the employee is carried out under a regime of hierarchical subordination, with the employer organising the employee's energies.[2]

Sulla base di tale presupposto, ossia del carattere dell'agente dotato di autonomia organizzativa e non sottoposto a potestà disciplinare cogente, la giurisprudenza - seppure risalente - della Corte, ha ritenuto che il parziale assoggettamento dello stesso alle norme dettate per i rapporti di lavoro subordinato

"does not entail any equivalence between the two contracts with the consequence that the principle of the nullity of modifications in pejus of contractual agreements valid for the employment contract is not applicable to the agency contract. "[3]

The Court held that it was compatible with the contractual autonomy of the parties and, therefore, not subject to the rules of Article 2077 of the Civil Code for an individual agreement to be worse than the collective rules applicable to the individual agency relationship, precisely because of the non-subordinate nature of that contract.

More recently, it has been held in case law that collective rules on agency agreements are binding on the assumption of implicit or explicit adherence,[4] the thesis that excludes: "the non-derogability of the AEC and the applicability of Art. 2077 of the Civil Code to the agency relationship as an external source. [5]

This thesis is once again based on the assumption that the assimilation of the agency relationship to the employment relationship is to be understood as limited only to certain specific institutions, such as the notion of just cause pursuant to Article 2119 of the Civil Code, while the difference in nature and discipline between the two relationships remains firm and clear.

It has also been rightly noted in doctrine that the non-derogation of common law AECs raises many doubts since it is not reflected in any provision of law. The only provision that deals with the non-derogation of collective agreements is in fact Article 2113 of the Civil Code on waivers and settlements which, although it also applies to 'para-subordinate' agents, does not provide for the nullity of any clauses of the individual contract contrary to the CSA, but only the possibility of challenging within a period of six months the waiver or settlement having as its object the collective rule.[6]

There is, however, a prevailing orientation of jurisprudence that deems, without going into too much detail on the regions, a contractual clause that differs from and worsens the regulation of AECs to be null and void, making specific reference to the regulation of Article 2077 of the Civil Code.[7]

[1] Cass. Civ. 1993 No. 1359, In this case, the Supreme Court held that the AEC was applicable to the agency contract, even though the principal was not a member of the trade union association and there was no express reference in the contract: instead, it recognised the existence of a consolidated company practice over time of the principal's compliance with the collective legislation.

[2] BALDI - VENEZIA, The Agency Contract, p. 33, 2020, Giuffrè.

[3] Cass. civ., 03/11/1980, no. 5860.

[4] Cass. Civ. 1999 no. 368.

[5] Court of Appeal Venice, 25.1.2011.

[6] TOFFOLETTO - SARACINI.

[7] Tribunale Torino 25.5.2021, Cass. Civ. 2004, no. 10774, Cass. Civ. 2000, no. 8133.

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Scioglimento concessione di vendita e gestione giacenze e stock

Termination of the sales concession contract and inventory management: rights and obligations of the parties.

Sales dealership agreements often contain an agreement on how to deal with the stock of goods purchased by the dealer during the term of the agreement; this regulation may take the form of an option for the franchisor to repurchase the goods at a certain price, or the former dealer may distribute these goods.

Other times, the parties do not provide for any contractual provision governing this case, and upon termination of the relationship, the problem arises as to whether or not the former dealer may resell the stock in inventory, or require the supplier to repurchase the goods.

In the following, these cases will be analysed, albeit briefly, in view of their relevance from both a technical and legal as well as a practical and commercial point of view.

1. Absence of a written agreement in the concession contract.

1.1. Right to resell products in stock.

In the absence of different contractual agreements, the case under analysis must be treated from two different aspects: under the principles of civil law, on the one hand, and those of intellectual property law, on the other.

Civilly the grantor may not prevent his dealer from reselling the goods purchased by the latter, unless the same have been sold subject to reservation of title and the dealer disposes of the contractual goods before becoming the owner: in this case, in addition to the breach of contract, the disposal will even constitute the offence of embezzlement (Art. 646 of the Criminal Code).[1]

From the point of view of intellectual property lawInstead, it is necessary to take up a principle that has already been addressed several times in this blogthat of thebrand exhaustionreferred to inart. 5 c.p.i.

According to this principle, once the owner of one or more industrial property rights places a good directly or with his consent on the market in the territory of the European Union, he loses the relevant rights.

The exclusivity is therefore limited to the first act of marketingwhereas no exclusivity can subsequently be claimed by the proprietor of the trade mark on the circulation of the product bearing the mark.

Since in a sales dealership agreement, the consent to the first placing on the market (i.e. the sale by the grantor to the dealer) stems from the contractual relationship between the parties, in the absence of any agreement to the contrary, the grantor may not oppose the resale of the contractual goods even once the relationship has ended.

It is stated in case law on the subject that:

"the entrepreneur, who has purchased goods with distinctive signs, is indeed entitled to market the product even after termination of the relationship because, according to the principle of exhaustion, the holder of an industrial property right cannot oppose the circulation of a product, to which that right relates, when that product has been placed on the market by the holder of that right or with his consent in the territory of the state or in the territory of other Member States of the European Union."[2]

The principle of exhaustion nevertheless knows a limitation: the second paragraph of Art. 5 of the IPC contains a safeguard rule that allows the trade mark proprietor to oppose the circulation of the product placed on the market with his consent and, therefore, "exhausted", if there are

"legitimate reasons for the proprietor to object to the further marketing of the products, in particular when their condition is changed or altered after they have been placed on the market".

Therefore, in the absence of 'legitimate reasons'[3]the supplier may not prevent the dealer from reselling inventories, let alone from using its trade mark, if it is used by the dealer for the sole purpose of advertising the availability of the product it intends to sell or lease and the advertising activity is not such as to create in the public the belief that the dealer is part of the licensor's authorised network, otherwise such conduct would constitute a confusing offence under Article 2598(1)(1) of the Civil Code on the subject of unfair competition.[4]

1.2. Right to have inventories repurchased.

In the absence of a contractual obligation, in order to understand whether the dealer may require the grantor to repurchase the goods remaining in stock, one must refer primarily to the principles of loyalty and good faith formerly Article 1375 of the Civil Code.

The clause of good faith in the performance of the contract operates as a criterion of reciprocity, requiring each party to the obligatory relationship to act in such a way as to preserve the interests of the other, and constitutes an autonomous legal duty incumbent on the parties to the contract, irrespective of the existence of specific contractual obligations or of what is expressly laid down by law.[5]

Since this is a very broad principle and certainly not easy to implement in practice, it is necessary to assess from time to time how it should be applied to the concrete case, on the basis of all those factors that may impact on the contractual balance: it will certainly be assessed differently if the concessionaire had been contractually obliged to maintain a stock in stock, as opposed to the case where the stocks are due to a failure to adhere to the rules of prudence, which should have advised the dealer to suspend or otherwise reduce purchases and dispose of medium warmth inventories in view of an upcoming report.[6]

A ruling by the Court of Milan is recorded,[7] which considered contrary to these principles the conduct of a supplier who prevented (contrary to the principle of exhaustion) the plaintiff from marketing the product it had supplied prior to withdrawal, without having cooperated in safeguarding the interest of the other party by making available - although not contractually provided for - the repurchase of the goods.

The Court therefore ordered the defendant to pay damages, quantified in the value of the goods remaining in stock.

There is also a further ruling, again by the Court of Milan,[8] relating to a licensing relationship, in which the court reached such a result with the aid of the instrument provided by Article 1340 of the Civil Code, according to which contractual usages or usage clauses are deemed to be included in the contract if it is not apparent that they were not intended by the parties.

The Court therefore held that the licensor was obliged to repurchase the goods sold, in addition to cooperation and conduct in good faith, on the basis of the fact that in the industry in which the parties operated it was customary for the licensor to purchase at least part of the unsold goods following the termination of the relationship.

2. Existence of an agreement between the grantor and the concessionaire.

2.1. Prohibition to resell stock.

A contractual clause that imposes a prohibition on the dealer to sell goods in stock following termination of the contractual relationship, without there being a commitment on the part of the grantor to repurchase such goods, is, in the opinion of the writer, of doubtful validity, both from a antitrustand civil law, for the reasons set out below.

In the field of antitrustArticle 5(b) of the Regulation 330/2010imposes limitations on the supplier's ability to require its buyer to engage in competitive activities after termination of the relationship. "The parties may not impose any direct or indirect obligation on the buyer, after the agreement has expired, not to manufacture, purchase, sell or resell certain goods or services, unless such obligation [...].:

refers to goods or services in competition with the contract goods or services;
is limited to the premises and land from which the purchaser has operated during the contractual period;
is indispensable to protect the 'know-how' transferred from supplier to purchaser;
the duration of this obligation is limited to one year. "

Since the requirements for the legitimacy of this obligation are cumulative, the rule does not normally apply to typical forms of sales concessions, which do not imply the need to protect know-how provided to retailers, but rather to the franchising,[9] with the consequence that this exemption can hardly be applied to the contractual case under analysis.

Moreover, the non-compete obligation is not part of the 'severe restrictions' (hardcore) governed by Article 4 of the Regulationbut of those that are simply not exempt, with the consequence that these limitations are only applied to contracts that have no less importancei.e. which do not appreciably restrict competition: this is the case whenever the market share held by each of the parties to the agreement exceeds 15% on the relevant markets affected by the agreement.[10]

If the dealership contract qualifies as a contract of minor importance, an agreement imposing a prohibition on the resale of the stored goods would benefit from the exemption and would (at least from a antitrust) lawful.

Mind you, this does not alter the fact that such a contractual agreement must in any case be subjected to the scrutiny of the principles of good faith and contractual fairness, so that it may be invalid if it is not adequately counterbalanced by - for example - an obligation on the part of the grantor to repurchase the goods in stock, in particular if the latter was contractually obliged to maintain a stock minimum in stock in the course of the report.[11]

2.2. The grantor's right to repurchase the goods.

A different reasoning must be made - again for the purpose of assessing its legality - in the case where the parties provide for a right of the grantor to repurchase the stock of the products, following the termination of the relationship.

To do so, it is first necessary to understand the legal nature of such an agreement, i.e. whether it should be framed as:

preliminary contract formerly 1351 of the Civil Code, ancillary to the concession contract, i.e.
purchase option agreement, formerly 1331 c.c.

The differences between these institutions are briefly examined below.

(a) Preliminary contract.

This is the case whenever in the contract both parties agree that upon termination of the relationship the products to stock will be bought back by the supplier at an agreed price.

Ex. The parties agree that at the end of the contract the dealer shall be obliged to resell to the licensor the entire remaining stock of products at a price equal to the invoice price net of VAT, with a discount of _____.

Such a contractual clause (which would indeed constitute a preliminary contract) is certainly valid, unless it is proved that the contract was null and void ab originee.g. for lack of consent of one of the parties, abuse of rights, etc.

(b) Call option covenant.

If, on the other hand, in the contract one party undertakes to hold firm to its own proposal and the other party (the beneficiary) is granted the right to make use of the option to accept the proposal or not, we fall into the different case of the option contract formerly Article 1331 of the Civil Code.

Ex. At the end of the contract, the grantor has the option to repurchase the stock at the price _______, to be notified within _____ of the termination of the contract.

Such an agreement must also tend to be considered valid; the only problem might be connected with the case where the option right is granted free of charge, i.e. without payment of a price (so-called premium).

Some (albeit minority) case law[12] holds that in such a case the option agreement would be null and void, since the right cannot be granted free of charge (e.g. a discount on the repurchase of goods). It should be noted, however, that the majority jurisprudence is in favour of the option being gratuitous: "Article 1331 of the Civil Code does not provide for the payment of any consideration and, therefore, the option may be offered for consideration or free of charge".[13]

[1] Torrente - Schlesinger, Handbook of Private Law, Giuffrè, § 377.

[2] Trib. Milan, 6.5.2015; in case law Court of Justice, 8.7.2010, Portakabin case.

[3] The following constitute 'legitimate reasons' for the non-application of the principle of trade mark exhaustion: (a) the modification or alteration of the condition of the goods, after they have been put on the market and (b) all those cases implying a serious and grave prejudice: the latter must be ascertained in concreto. On this point cf. Trib. Milan 17.3.2016.

[4] On this point Civil cassation 1998, no. 10416; Trib. Rome, 28.4.2004.

[5] Cass. Civ. 2014, no. 1179.

[6] On this point cf. Trib. Milan, 19.9.2014.

[7] Trib. Milan, 21.5.2015.

[8] Trib. Milan, 19.9.2014.

[9] Bortolotti, Distribution Contracts, Walters Kluver, 2016.

[10] Cf. De Minimis Communication 2014 of the EU Commissionin conjunction with the Commission Notice on Guidelines on the effect on trade concept contained in Articles 81 and 82 of the Treaty.

[11] On this point cf. Trib. Milan, 19.9.2014.

[12] See Appeal Milan 5.2.1997.

[13] Trib. Milan 3.10.2013

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The granting of the exclusive right to the concessionaire is an incidental and non-essential element of the contract, cannot be derived implicitly from the predetermination of an 'area' to the concessionaire himselfas there is no necessary connection between the area and exclusive.

The grantor may not prevent exclusive area dealers from making passive sales outside the territory entrusted to them.

1. Sales concession and exclusivity

2. Passive sales outside the territory.

3. Sales concession and non-compete obligation

In order to identify the essential elements of the agency contract, i.e. those elements that are so characterising that they are indispensable to qualify the relationship as such, it is certainly appropriate to start from the definitions of agent that are provided to us by the legal system.

1. The area

2. Independence (and conduct of business on the principal's premises)

3. Continuity of activity

3.1. Agency contract and ancillary activity

3.2. Ancillary agency activities to the main contract

4. Sale of goods

Adaptation privacy of the agent therefore necessarily passes through a 'classification' of his role with respect to the company or companies he works for.

1. Owner, manager or appointee?

2. The measure of 9.7.2020 against Wind Tre.

3. The Agent's role: owner or manager?

4. Differences in EU

5. The agent's privacy adjustment

6. B2C and B2B

7. The

8. Appointments, authorisations, etc.

9. Adaptation as a work in progress

To understand whether, when and to what extent the general terms and conditions apply to the sales relationship is the purpose of this article, in which an attempt will be made to outline the differences between the civil law and the Vienna Convention rules.

1. Proposal and acceptance: Art. 1229 of the Civil Code and Art. 19 CISG.

2. When the GTC apply to the contract: Civil Code and CISG compared.

3. Implied acceptance by conclusive facts.

4. Language of the CGC.

5. Battle of the forms: knock-out and last shot rules.

The purpose of this article is to give the reader an overview of how the Vienna Convention has regulated the institutions of the proposal of an offer, its acceptance, pre-contractual liability in negotiations and the main differences from Italian law.

1. Art. 14: Definition of proposal.

2. Art. 15: Withdrawal of the proposal.

3. Art. 16: Revocation of the proposal

4. Art. 17: irrevocable proposal.

5. Art. 18: acceptance of the proposal.

6. Revocation and pre-contractual liability: civil code.

7. Revocation and pre-contractual liability: Vienna Convention.

1. Vienna Convention

2. Civil Code

The sales representative is the person who acts as a highly qualified intermediary between the pharmaceutical company and those responsible for administering the drug (be it the doctor, the hospital or the pharmacy).

Although Italian jurisprudence has not entirely ruled out the applicability of agency rules to this figure, it has limited its application.

Below are some tools for understanding whether and when a sales representative should be classified as an employee, agent or self-employed person.

1. Employee or agent?

2. Agent or self-employed?

1. Selective distribution: the regulatory and jurisprudential context.

2. The case Shiseido v. Amazon.

2.1. Ascertaining the luxury category of products.

2.2. Verification of selective distribution contracts.

2.3. Brand reputation bias.

3. Amazon is an 'active' hosting provider

4. Some reflections

Other times, the parties do not provide for any contractual provision governing this case, and upon termination of the relationship, the problem arises as to whether or not the former dealer may resell the stock in inventory, or require the supplier to repurchase the goods.

In the following, these cases will be analysed, albeit briefly, in view of their relevance from both a technical and legal as well as a practical and commercial point of view.

1. Absence of a written agreement in the concession contract.

1.1. Right to resell products in stock.

1.2. Right to have inventories repurchased.

2. Existence of an agreement between the grantor and the concessionaire.

2.1. Prohibition to resell stock.

2.2. The grantor's right to repurchase the goods.

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The original article was written in Italian and translated with Deepl and may therefore have some inaccuracies.

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INFORMATION PURSUANT TO ART. 13OF EUROPEAN REGULATION 679/2016 (GDPR)

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INFORMATION PURSUANT TO ART. 13
OF EUROPEAN REGULATION 679/2016 (GDPR)