Single or multiple agent? What are the principal's contribution obligations?
When speaking of 'single agency' it is important to emphasise the difference between the single-agent agent and the agent operating 'on an exclusive basis'; the latter, in fact, is the person who, on the one hand, undertakes not to engage in any competing activities and, therefore, to act as an agent for other competing principals, but who, on the other hand, reserves the right to work as an agent for other principals who do not operate in different sectors (multi-agent agent).
In Italian law, the agent's exclusivity constitutes a natural element of the contractArticle 1743 of the Civil Code, in fact, prohibits the agent from taking on the task of handling, in the same area and for the same branch, the business of several competing undertakings. In the agency contract, exclusivity therefore constitutes a right and a normatively regulated obligation, provided for both in favour of and at the expense of each of the parties[1] and which is normally included in agency contracts.
A different figure from that of the exclusive agent is that of thesingle agenti.e. the agent who works for only one principal and who, therefore, undertakes to not to take on any other agency assignment,[2] also with reference to non-competing sectors other than that in which the principal operates.
The distinction between single and multiple agents has a strong relevance in the event of the application of ERM, which provide a more advantageous regime for the one-firm agent in several respects, such as, for example, longer notice periods and more favourable ways of calculating the severance payment and the indemnity for the post-contractual non-competition covenant.
Regardless of the applicability of AECs, this distinction certainly has great relevance from a point of view social securityas there are provisions for the one-firm agent of the higher contribution ceilings than the multi-firm agent.[3] The reason for this difference is essentially related to the more difficult exercise of the activity, resulting from the prohibition of it for any other principal.[4]
With reference to the existence or non-existence of a single-mandatory relationship, jurisprudence is not unequivocal in considering whether it must result from an express written agreement between the parties, or, on the contrary, may derive from a mere factual situation. This contrasting jurisprudence essentially concerns the correct interpretation of the legislative text and, more precisely, the interpretation of Ministerial Decree 20.2.1974, Article 4(c), which provides as follows:
"The principal within three months of the start date of the relationship must provide, using the appropriate forms prepared by ENASARCO or by other means, the following information for each agent or sales representative: (c) thepossible commitment of the agent or sales representative to carry on business for only one principal"
According to a first orientation the agent's right to receive the (higher) social security contribution as a single agent cannot result from a mere factual situation; on this point, the Supreme Court states that
"the contribution ceiling is reserved only for those agents or commercial representatives who have undertaken to exercise their activity vis-à-vis a single principal; this can be proved by the fact that, within three months of the commencement of the relationship, the principal has communicated that exclusive undertaking to ENASARCO, as well as by any other means of proof of the existence of a contractual undertaking or obligation with only one principal, as it is not sufficient merely to ascertain the factual modalities with which the relationship actually took place"[5]
The Supreme Court therefore held that "committed' means 'obligated', with the consequent irrelevance of the performance of an agency relationship with a single principal, but without the assumption of an actual obligation of exclusivity resulting from a written agreement between the parties.
Contrary, based on a second orientation of the Supreme Court, the right of the one-man agent to the contribution on a higher ceiling:
"arises as a function of the actual exercise of the activity for a single principal, irrespective of a finding of formal assumption of a specific obligation vis-à-vis that principal."[6]
_____________________
[1] Baldi, Il contratto di agenzia, Milan, 2001, 70.
[2] Saracini, Toffoletto, Il contratto di agenzia, Milan, 2002, 213.
[3] http://www.enasarco.it/notizie/minimali_e_massimali_2017.
[4] Perina - Belligoli, The Agency Relationship, Turin, 2015, 55.
[5] Civil cassation 1994, no. 1302; see also Civil cassation 2000, no. 14444.
[6] Cass. Civ. 2007, no. 17080; Cass. Civ. 2002, no. 699; Cass. Civ. 2000, no. 4877.
The principal's bankruptcy. For what amounts can the agent be filed as a debtor?
Article 2751-encore c. c., confers in favour of the agent a general lien on movable property that is placed in accordance with Article 2777 of the Civil Code immediately after legal costs and employees' claims. That article reads as follows:
"Claims relating to: [...] the following have a general lien on furniture commissions arising from the agency relationship due for thelast year of performance and the allowance due for termination same."
This rule constitutes one of several indications of the legislative tendency to assimilate the agent to the employee; by virtue of this provision, the agent may claim a general lien on the debtor's assets both for commissions accrued in the last year of performance and for indemnities due as a consequence of the termination of the relationship itself.
It should be noted that in 2013 the United Sections[1] have definitively established that the principle that the general privilege provided for by the provision under comment does not assist claims for commissions due to the corporation exercising the activity of an agent.
As for the annual deadline provided for in Art. 2751-encore c.c. it is referable to commissions and not to other indemnity items; moreover, according to doctrine[2] and case law[3]this last year does not start from the date of declaration of insolvency, but since the termination of the relationship, since in the explicit letter of the rule, reference is made to the "last year of service" and not to the last year in respect of the bankruptcy. It should be pointed out that, according to the majority case law, if the agency relationship was still in existence at the date of bankruptcy, this annual period should be considered to coincide with the date of the declaration of bankruptcy itself.[4]
It is very important to point out that Article 1748 of the Civil Code provides that:
"The agent shall be entitled to commission on business concluded after the date of termination of the contract if the proposal is received by the principal or the agent at an earlier date or the business is concluded within a reasonable time after the date of termination of the contract and the conclusion is predominantly attributable to the agent's activity."
In the light of this normative dictate, therefore, the privilege includes business promoted by the agent before the termination of the relationship and concluded both before and after the termination[5] even if they have not yet been performed by the principal.[6]
On the contrary, the recognition that Article 2751-bis(3) makes of the privilege relating to the indemnities due for the termination of the relationship is independent of any reference or temporal limitation.[7] The same cannot be said for thesupplementary customer allowancewhich is of a contractual and not a regulatory nature (governed precisely by the ERM) and therefore non-returnable in the exhaustive list provided for in the rule under analysis.
On the basis of the foregoing, in the event the contractual relationship is terminated for reasons not attributable to the agent and, following the termination of the relationship, the principal enters into bankruptcy, the agent will have the right to file a claim for the commissions relating to the last year of business and severance indemnities pursuant to Article 1751 of the Civil Code and, in the event of termination ad nutumcompensation for lack of notice.
A much-discussed issue concerns the effects of bankruptcy on an ongoing agency relationship at the time of the declaration of insolvency itself. In fact, in the silence of the law, the question arises as to whether, in the event of the principal's bankruptcy, the agency contract should be governed by the general rules set forth in Article 72 of the L.F. and therefore its performance should be suspended until the liquidator, authorised by the committee of creditors, declares to take over or dissolve the relationship, or should the rule dedicated to the mandate (Article 78 L.F.) apply, with the consequence that if the principal goes bankrupt, the contract itself is automatically dissolved.
This issue has great practical relevance, in fact, should Article 72 of the Bankruptcy Law be deemed applicable, the contractual relationship is not dissolved following the mere declaration of bankruptcy, but rather remains suspended in a sort of quiescent phase, until such time as the liquidator opts for the continuation or termination of the relevant contractual relationship, with the consequent right, in the latter case, of the agent to severance indemnities. Otherwise, i.e. application of theArticle 78 F.L., the dissolution operates as of right, with the consequent exclusion of the agent's right to payment of indemnities due for the termination of the relationship.
The majority case law on this point holds that:
"with reference to the agency contract, by virtue of the peculiar fiduciary nature of the relationship of principal, in the event of bankruptcy, the new general rule contained in Article 72 of the Bankruptcy Law is not applicable, and indeed the contract is terminated ope legis, with the exclusion of the agent's right to payment of the indemnity for termination of the relationship and lack of notice precisely as a consequence of the operation of the termination of the contract for a cause independent of the will of the parties."[8]
On the contrary, if the general rules of Article 72 of the Bankruptcy Law are deemed applicable and the liquidator opts for the continuation of the relationship, the agent's claims accrued as a result of the performance of its activity during the bankruptcy are lodged in prededuction for the activity performed after the declaration of insolvency pursuant to Article 111(1)(1) of the Bankruptcy Law.[9]
Finally, it should be noted that, with regard to contributions paid to the institute ENASARCO since they are neither compensatory nor commissionable in nature, they are not covered by the privilege under Article 2751 encore Civil Code, nor can they fall under the provision of Article 2753 of the Civil Code, which is exclusive to subordinate employment.[10]
_________________________________
[1] Cass. Civ. Sec. Un. 2013 no. 27986.
[2] Venice - Baldi, The Agency Contract, p. 299, 2015, Milan.
[3] Trib. Perugia 30.12.1991; Trib. Rome 19.9.2007.
[4] Trib. Prato 18 January 2012, in Bankruptcy 2012, p. 583, with a brief note by COMMISSO, Dissolution ex lege of the agency contract in the event of the principal's bankruptcy.
[5] Venice - Baldi, The Agency Contract, p. 300, 2015, Milan.
[6] Cass. Civ. 2011, no. 9539.
[7] Trib. Rome 19 September 2007.
[8] Trib. Prato 18 January 2012, in Bankruptcy 2012, p. 583, with a brief note by COMMISSO, Dissolution ex lege of the agency contract in the event of the principal's bankruptcy
[9] Practical Memento, Business crisis and bankruptcy, p. 435, no. 3100, 2016, Ipsoa.
[10] Venice - Baldi, The Agency Contract, p. 299, 2015, Milan
What are the seller/manufacturer's warranties for material defects in the thing sold?
The discipline of the warranty for material (and not legal) defects is regulated in arts. 1490 et seq. of the Civil Code. Specifically, it is subdivided as follows: arts. 1490-1496 regulate the warranty for defects of the thing, while art. 1497 of the Civil Code regulates the warranty for lack of quality.
Italian jurisprudence has developed, alongside these guarantees, a further one known as 'aliud pro alio", which occurs whenever the material defect of the thing sold is so serious as to render the good completely incapable of performing the function for which it was purchased.
As far as possible, given the complexity and articulation of the issue, an attempt is made below to distinguish the various disciplines of guarantees known to the Italian legal system.
(a) Warranty for defects (Arts. 1490-1496 Civil Code)
This warranty is owed by the seller only if at the time of the conclusion of the contract the buyer was unaware of the existence of the defects, or if such ignorance is not culpable, since the defects were not readily recognisable (Art. 1491 of the Civil Code).[1]
As to its content, it confers on the buyer the possibility of acting to request, at his discretion, the termination of the contract or the reduction of the price (Art. 1492 Civil Code), in addition in any event to compensation (Art. 1494 Civil Code). Excluded from this guarantee is, on the other hand, an action for exact performance, i.e. an action whereby the seller is requested to eliminate defects by repairing the goods sold.[2]
It is important to emphasise that the choice between an action for reduction of price and an action for termination of the contract is irrevocable once it has been made by a court application (Art. 1492(2) of the Civil Code), since a party may not even bring an action requesting the reduction of the price as a subordinate claim to the application for termination of the contract, or vice versa.[3]
Finally, the parties are entitled to exclude this warranty for defects, with the only limitation being the case where the defects are concealed in bad faith by the seller. Particular attention must be given to warranty disclaimers (the discussion of which alone would require a much more extensive study), which fall under the special rules of Art. 1341 of the Civil Code,[4] which regulates so-called 'unfair terms' and provides for the obligation to expressly sign the clause with a double signature, failing which the clause is null and void.[5]
(b) Guarantees for lack of quality pursuant to Article 1497 of the Civil Code.
Whereas defect consists in an imperfection/defect of the good, lack of quality occurs whenever the thing (even though it has no manufacturing/forming/preservation defects) is ascribable to one species rather than another, even within the same genus.[6]
The discipline of this warranty is particular, since on the one hand Art. 1497 para. 1 of the Civil Code makes it subject to the terms of complaint and prescription provided for in Art. 1495 of the Civil Code (and which will be dealt with in section X below), but on the other hand it differs from them, since Art. 1497 para. 2 of the Civil Code provides that termination of the contract is allowed ".according to the general provisions on termination for non-performance".
Although case law over time has always been oscillating as to whether the presence of defects and the lack of quality should be subject to the same discipline or not,[7] the most recent judgments, seem to hold that the action under Art. 1497 of the Civil Code differs from the action under warranty for defects in that in the former:
- the buyer may exercise an action for exact performance (pursuant to Art. 1453 of the Civil Code);
- the buyer could not claim a reduction of the price, as this is not provided for by the general rules on non-performance.[8]
(c) Aliud pro alio
One has aliud pro aliowhen the thing sold belongs to a kind entirely different from that of the thing delivered, or has defects that prevent it from performing its natural function or the concrete function assumed by the parties to be essential.[9] Consider, for example, the transfer of a work of art falsely attributed to an artist. This hypothesis entitles the buyer to request termination of the contract for non-performance by the seller, pursuant to Art. 1453;[10] or to the sale of houses that are uninhabitable or otherwise lack the habitability requirements (C. 8880/2000) or of cars with forged chassis numbers (C. 7561/2006).
In case of aliud pro aliothe buyer is not subject to any duty to give notice, but has the possibility of either demanding performance or bringing an action for termination, and according to Art. 1453 the seller will be liable only if at fault, in accordance with the general principles governing non-performance and, therefore, subject to the ordinary limitation period of ten years.[11]
(d) Damages
In the case of material defects of the thing, the buyer is entitled not only to claim termination of the contract or reduction of the price, but also compensation for damages. Art. 1494 of the Civil Code also provides for a presumption of fault on the part of the seller, who is required to prove that he was blamelessly unaware of the existence of the defects of the thing.
Consistent case law holds that the purchaser must be placed in the economic situation equivalent to that in which he would have found himself if the thing had been free from defects, but not that in which he would have found himself if he had not concluded the contract or if he had concluded it at a lower price.[12] Moreover, the purchaser may also claim compensation for the expenses incurred in remedying the defects, irrespective of the actual elimination of the defects.[13]
e) Application of the Vienna Convention and the Consumer Code
It should be noted that the distinction between defects, lack of quality, defective functioning, aliud pro alio and ordinary liability has been superseded by the Vienna Convention, which provides, in Articles 35-41, homogeneous means of protection of the buyer for all hypotheses of non-conformity of the thing delivered with respect to the thing agreed upon.
Art. 35 lays down two criteria for assessing whether the goods delivered are free from defects, firstly that of conformity with what was agreed upon between the parties and, in the event that such an agreement is lacking, a series of subsidiary criteria.[14]
As to the remedies offered by the Convention, they are: the request for fulfilment (Art. 46)[15]termination of the contract (Art. 47),[16] price reduction (Art. 50)[17] and damages (Art. 45).[18]
Directive No. 1999/44/EC of 25.5.1999, implemented by Legislative Decree No. 24 of 2.2.2002 (which introduced Articles 1519 bis-1519 novies into the Civil Code) and relating to the sale of consumer goods, moved in the same direction. The new discipline provides, at the professional seller's expense, a unitary guarantee for all hypotheses of 'lack of conformity' of the goods with the contract, legitimising the consumer to request, at his choice, the repair of the goods or the termination of the contract.
___________________________
[1] Recognition of the defect is excluded if the sale was concluded at a distance, i.e. if the goods were packaged or packaged
[2] This exemption applies, of course, to sales between professionals, since the new consumer code, which was introduced in Italy with the transposition of Directive 25.5.1999, no. 1999/44/EC, implemented by Legislative Decree 2.2.2002, no. 24.
[3] Cass. Civ. 2015, no. 17138; Cass. Civ. 2004, no. 1434.
[4] Article 1341. "General terms and conditions prepared by one of the parties are effective vis-à-vis the other, if at the time of the conclusion of the contract the latter knew or ought to have known of them using ordinary diligence (1370, 2211).
In any event, conditions which establish, in favour of the one who has prepared them, limitations of liability, (1229), the right to withdraw from the contract (1373) or to suspend its performance, or which establish in favour of the other contracting party forfeitures (2964 et seq, or sanction forfeitures (2964 et seq.), limitations on the ability to raise objections (1462), restrictions on freedom of contract in relations with third parties (1379, 2557, 2596), tacit extension or renewal of the contract, arbitration clauses (Code of Civil Procedure 808) or arbitration clauses (Cod. Civil Procedure Code 808) or exceptions (Civil Procedure Code 6) to the jurisdiction of the courts'.
[5] According to authoritative doctrine (Bortolotti F. ''Manuale di diritto commerciale internazionale'' vol. II L.E.G.O. Spa, 2010; Ferrari F. ''General 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) and jurisprudence (Civil Cassation 2007, no. 1126) maintain that the double signature requirement of Art. 1341 of the Civil Code cannot be invoked and is therefore derogated from in the event of the application of the Vienna Convention. Contra minority doctrine (Pischedda P. "The evolution of export credit insurance" IPSOA, 2007).
[6] With reference to the qualities that the goods bought and sold must have, this is determined in the Italian guidelines, by the criterion of 'average quality', which operates (exclusively) in the sale of general goods. This criterion requires that the individual qualities exist to that ordinary extent which gives the goods an average value (Art. 1178 of the Civil Code).
[7] Cass. Civ. 1978 nr. 5361; Cass. Civ. 1978 nr. 206.
[8] Cass. Civ. 2000, no. 639.
[9] On the subject of the distinction between vice and aluid pro alio, the Supreme Court of Cassation recently intervened stating that there is a redhibitory vice or lack of essential qualities of the thing delivered if it presents imperfections that make it unsuitable for the use for which it should be intended or significantly diminish its value, or if it belongs to a different type or species other than that agreed upon; on the other hand, there is a delivery of aliud pro alio, which gives rise to the contractual action for termination or performance pursuant to Art. 1453, freed from the terms of forfeiture and prescription, where the goods delivered are completely different from those agreed upon, inasmuch as belonging to a different kind, they prove to be functionally wholly incapable of fulfilling the economic-social purpose of the res promised and, therefore, of providing the required utility. C. 5202/2007; C. 686/2006; C. 14586/2004; C. 18757/2004; C. 13925/2002; C. 5153/2002; C. 2659/2001; C. 10188/2000; C. 2712/1999; C. 4899/1998; C. 1038/1998; C. 844/1997; C. 244/1997; C. 5963/1996; C. 593/1995; C. 8537/1994; C. 1866/1992; C. 13268/1991; A. Rome 29.5.2008.
[10] Cass. Civ. 2008 nr. 17995.
[11] Cass. Civ. 2016, no. 2313.
[12] Cass. Civ. 2000, no. 7718; Cass. Civ. 1995, no. 1153.
[13] Cass. Civ. 1990, no. 8336.
[14] Art. 35 second paragraph 'Unless the parties agree otherwise, goods are in conformity with the contract only if: (a) they are fit for the purposes for which goods of the same kind would ordinarily be used; (b) they are fit for any special purpose expressly or impliedly brought to the knowledge of the seller at the time of the conclusion of the contract, unless it appears from the circumstances that the buyer did not rely on the seller's skill or judgement or that it was unreasonable for the seller to do so (c) possess the qualities of goods which the seller has presented to the buyer as a sample or model; (d) are packaged or packaged according to the usual criteria for goods of the same kind, or, in the absence of a usual criterion, in a manner suitable to preserve and protect them."
[15] Action available, provided that it has not resorted to an incompatible remedy. It may also require replacement of the goods if there is a fundamental non-performance under Art. 25. Reparation may be claimed instead where it does not appear unreasonable having regard to all the circumstances. See on this point Bortolotti, Il contratto di vendita internazionale, CEDAM, 2012, p. 260.
[16] Termination of the contract and consequent return of the services rendered may only be required in the event of essential non-performance or in the event of non-delivery of the goods within a reasonable additional period set by the purchaser pursuant to Art. 47.
[17] Such a claim may not be advanced if the seller remedies the defect or if the buyer rejects the seller's performance.
[18] The harm consists of the loss sustained by reason of the non-performance and the loss of profit. In any event, the recoverable harm cannot exceed the loss which the seller had foreseen or ought to have foreseen at the time of the conclusion of the contract (Art. 74), the buyer having in any event to take reasonable steps to limit the harm, the non-performing party being entitled to reduce the amount of damages by the amount of the loss which it could have avoided (Art. 77).
Dealer, distributor or regular customer?
A sales dealership contract is an integrated distribution agreement between two or more entrepreneurs, and it is often difficult to distinguish between a dealer-concessionaire relationship and a sales relationship with a regular customer; the European Court of Justice has indicated certain distinguishing and characterising criteria that help its qualification, such as price predetermination, exclusivity and a high volume of sales relationships.
The sales dealership contract (also referred to as a distribution contract) is one of the most widespread forms of integrated distribution and is used both at the level of marketing through dealers (such as exclusive importers in charge of a state) and at the retail level (think of the classic example of car dealers).
This contract, although in our country is not legislatively regulated,[1] takes the form, in principle, of the marketing of particular products, through a coordinated action between two or more entrepreneurs: the licensor (who undertakes to produce) and the dealer who undertakes to purchase the products periodically.[2]
Here are the main distinguishing features of this type of contract:[3]
- is a distribution contract, having as its main object and purpose the marketing of the grantor's products;
- the dealer enjoys a position of privilege (such as, for example, although not necessary, area exclusivity), in return for the obligations it assumes to ensure a correct distribution of products;
- the concessionaire acts as buyer dealer and therefore, unlike the agent and/or procurer, does not merely promote the parent company's products, but purchases them and bears the resale risks (cf. main differences between the agent and the grantor).
- the dealer is integrated into the grantor's distribution networkbeing obliged to resell the products according to the directives and directions of the grantor himself.
That being said, very frequently, especially in cases where the parties have not specifically regulated the relationship, the question arises as to whether the grantor's counterpart is a dealeror a simple "regular customer". Think of the case in which the grantor starts selling in a market to a certain person, who gradually assumes more responsibilities and commitments typical of a dealer (e.g. obligation to promote): in such cases, the problem arises as to whether the relationship between the parties can be qualified as a series of sales contracts, rather than as the execution of a sales dealership contract, and therefore whether the buyer has in fact "transformed" from a mere customer into a dealer, responsible for the distribution of the products in a certain territory under his jurisdiction.
Case law on this point holds that a sales concession contract exists whenever a
"unnamed contract, [...] is characterised by a complex function of exchange and cooperation and consists, on a structural level, of a framework contract [...], from which arises the obligation to conclude individual sales contracts or the obligation to conclude pure product transfer contracts on the terms set out in the initial agreement. "[4]
One of the main consequences of classifying a relationship as a sales dealership, and not simply a relationship between manufacturer and regular customer, is that the dealership contract is normally framed as contract of durationwhich cannot be terminated without giving the distributor reasonable notice. Accordingly, if the situation is indeed the latter, there will be an obligation on the seller to give notice if it decides to cease supplying the other party, and vice versa, an obligation on the purchaser to purchase the products from the grantor during the notice period.[5]
In 2013, the European Court of Justice, in the Corman-Collins judgment,[6] attempted to define as precisely as possible what are the characteristic traits of the dealer, in order to distinguish this figure from the 'regular customer'.
In particular, according to the Courts of the Court, a durable commercial relationship between economic operators is configurable as a sale of goods when
"is limited to successive agreements, each concerning the delivery and collection of goods. "
Conversely, the relationship must be regarded as a sales concession when the distribution is regulated (in writing or de facto) by
"a framework agreement having as its object a supply and procurement obligation concluded for the future, which contains specific contractual clauses relating to distribution by the dealer of the goods sold by the grantor."
In conclusion, according to the Court, if the relationship is limited to the supply of goods, regardless of whether it continues even over a long period of time, it must be qualified as a regular customer, who makes several purchases over time. If, on the other hand, the reseller assumes specific obligations typical of distribution, the relationship must be qualified as a sales licence.
However, these interpretative criteria dictated by the Court of Justice must be used by national courtswhich are required to identify the elements from which it may be inferred whether or not such obligations have been undertaken. In particular, it will be necessary to ascertain how the relationship between the parties actually developed, even irrespective of whether or not the parties entered into a contract.
These principles are not always easy to apply and do not always lead to an unambiguous interpretation. Attached below, by way of example, are some characterising elements and which may, according to Italian case law, lead to the qualification of the relationship as a sales concession, i.e.
- the predetermination of resale prices and related discountsthe existence of an exclusive, significant, continuous and economically conspicuous series of contracts of buying and selling the grantor's products;[7]
- agreements on the sale of products "submarine"the fact that the dealership was repository of products, that the volume of turnover of sales was relevant.[8]
[1] Only in Belgium was the sale concession already regulated by the law of 27 July 1961.
[2] See on this point Bocchini and Gambino, I contratti di somministrazione e di distribuzione, 2017, UTET, p. 640 ff.
[3] See on this point Bortolotti, Manuale di diritto della distribuzione, CEDAM, 2007, p. 2 et seq.; Bortolotti, Contratti di Distribuzione, Itinera, 2016, p. 538 et seq.
[4] Cass. Civ., no. 1469 of 1999; Cass. Civ., no. 13569 of 2009.
[5] Cass. civ. no. 16787 of 2014; Appeal Cagliari 2 February 1988.
[6] Judgment 19.12.2013, in case C-9/12.
[7] Cass. Civ., no. 17528, 2010.
[8] Cass. Civ., no. 13394 of 2011.
How is the contract termination indemnity calculated according to the 2014 Industry AEC?
Article 10 of the 2014 Industry AEC (see also , divides the severance pay into three components:
- termination indemnity, set aside by the principal in the ENASARCO fund (FIRR) (Chapter I);
- supplementary customer indemnity paid to the agent or representative even in the absence of an increase in customers and/or turnover (Chapter II);
- merit-based allowance, linked to an increase in customers and/or turnover (Chapter III).
Para. (3) of Article 10 also provides that the indemnity is to be calculated on all sums, however denominated, received by the agent in the course of the relationship, as well as on sums in respect of which at the time of termination of the relationship the right to payment in favour of the agent or agent has arisen, even if they have not been paid in whole or in part.
This implies that these allowances (on this subject see also calculation of indemnity pursuant to art. 1751 of the civil code., calculation of former AEC 2009 allowances, calculation of ex ANA allowances 2003) should also be calculated taking into account:
- non-commissionable remuneration, such as reimbursement of expenses and/or ancillary activities;
- amounts accrued but not yet received and/or paid to the agent at the date of termination.
I. FIRR
The FIRR is set aside at ENASARCO by the principal and, upon termination of the relationship, is due to the agent regardless of any increase in clientele and/or business. On the other hand, it is not paid in the event of termination of the relationship at the initiative of the principal, justified by the following conduct on the part of the agent: undue withholding of sums due to the principal, unfair competition, violation of the exclusivity obligation for a single firm.
The obligation to set aside the FIRR only exists if the AEC apply to the relationship. The AEC are only applicable to the contract if both parties (principal and agent) are members of the contracting trade unions, or, otherwise, the parties have expressly referred to the AEC in the contract, or have provided for their implicit application in the course of the relationship (e.g., where the principal has provided for a spontaneous, constant and uniform application of certain provisions of the AEC).[1] This implies that in the event of non-application of the AEC, the principal is not required to set aside the FIRR, but only to pay social security contributions to Enasarco.[2] (on this point cf. the social security obligation of the Italian agent and the foreign principal).
It is important to note that case law[3] and doctrine,[4] unequivocally hold that the claim for payment of the FIRR must be made against Enasarco and not against the principal, except for any sums not set aside by the latter.
This allowance is calculated annually as follows:
ONE-MAN AGENT
- 4% on the portion of commissions up to € 12,400 per year
- 2% on the portion of commissions between € 12,400 p.a. and € 18,600 p.a.
- 1% on the portion of commissions exceeding € 18,600 per year
MULTI-FIRM AGENT
- 4% on the portion of commissions up to € 6,200 per annum
- 2% on the portion of commissions between € 6,200 p.a. and € 9,300 p.a.
- 1% on the portion of commissions exceeding € 9,300 per year
II. SUPPLEMENTARY ALLOWANCE
According to majority case law, AECs represent a guaranteed minimum treatment for the agent,[5] such indemnity will be paid to the agent upon termination of the relationship and will be due to the agent regardless of proof by the agent that it has developed the principal's business and/or clientele, as is the case with the civil law indemnity under Art. 1751 of the Civil Code (on this point see severance pay in agency contracts).
It will be recognised at the following rates:
| 3% | on the total amount of commissions and other sums due |
| 0.50% additional | on commissions accrued from the fourth year (up to a maximum annual limit of € 45,000 in commissions) |
| additional 0.50% | on commissions accruing from the sixth completed year (up to a maximum annual limit of € 45,000 in commissions) |
This indemnity shall be due in all cases where the termination of the relationship is not due to a fact attributable to the agent (whether in the case of a fixed term or open term contract). No facts attributable to the agent shall be deemed to be facts:
- resignation due to established serious breach of duty by the principal,
- resignation as a result of permanent and total disability,
- resignation due to infirmity and/or illness that does not permit continuation of the relationship,
- resignation following the attainment of the ENASARCO old-age or early old-age pension,
- resignation following the attainment of an old age or early old age pension INPS.
III. MERITOCRATIC ALLOWANCE
The AEC Industry 2014 provides for a rather structured calculation to quantify the meritocratic allowance, which will only be paid to the agent if it is higher than the sum of the two allowances analysed above (FIRR + supplementary).
The calculation of the meritocratic allowance is as follows:
- Determination of theincrease in customersconsisting of the difference between the commissions received by the agent at the beginning and at the end of the relationship, bearing in mind that the prognosis period will vary depending on the agent's status as a sole or multiple agent and the duration of the relationship, according to the following table:
| Type and duration | Years |
| Multi-firm agent with a term of 5 years or less | 2,00 |
| Single agent with a term of 5 years or less | 2,25 |
| Multi-firm agent with a term of more than 5 years and less than or equal to 10 years | 2,50 |
| Single agent for more than 5 years and less than or equal to 10 years | 2,75 |
| Multi-firm agent for more than 10 years | 3,00 |
| Single agent for more than 10 years | 3,25 |
- The initial figure is made homogeneous with the final figure by applying to it the Istat revaluation coefficient for labour credits.
- The rate of migration of customers according to the following table:
| Type and duration | percentage |
| Multi-firm agent with a term of 5 years or less | 27% |
| Single agent with a term of 5 years or less | 15% |
| Multi-firm agent with a term of more than 5 years and less than or equal to 10 years | 22% |
| Single agent for more than 5 years and less than or equal to 10 years | 20% |
| Multi-firm agent for more than 10 years | 37% |
| Single agent for more than 10 years | 35% |
- For the first year of the prognosis period, the aforementioned rate of migration is subtracted from the value of the increment referred to in point 1. For the subsequent years of the prognosis period, the same migration rate is subtracted from the value determined for the previous year of the prognosis period. The results thus obtained are added together.
- The amount obtained is reduced on a lump-sum basis by a variable percentage equal to:
- To 10% for contracts of 5 years or less;
- To 15% for contracts with a duration of more than 5 years and less than 10 years
- At 20% for agency contracts exceeding 10 years.
- Compare the meritocratic indemnity calculated according to the preceding points with the maximum value of the indemnity provided for in the third paragraph of Art. 1751 of the Civil Code.
- The termination indemnity and the customer indemnity are deducted from the meritocratic indemnity obtained.
[1] See Bortolotti, Distribution Contracts, 2016, Wolter Kluwer, p. 87 ff.
[2] Trib. Rome 14.1.2010.
[3] Trib. Bari 2.5.2012.
[4] Bortolotti, Distribution Contracts, 2016, Wolter Kluwer, p. 365 ff.
[5] See on this point Cass. Civ. 2014 no. 7567. However, it should be noted that the European Court of Justice, in a judgment of 23 March 2006, challenged the legitimacy of the supplementary client indemnity as provided for by the AEC, which allows the agent to receive a termination indemnity in any event, even if the agent has not actually developed the principal's clientele and the latter benefits from it even after the termination of the relationship; in line with this orientation there is a minority direction of the case law on the merits, which has held the AEC inapplicable to our system and has therefore not recognised the agent's entitlement to the rules set out therein as a guaranteed minimum (Tribunale Treviso 29 May 2008. Tribunale Treviso 8 June 2008; Tribunale di Roma 11 July 2008).
Contract of sale or contract of sale? ...and what if the Vienna Convention applies?
Under Italian law, for the purposes of differentiating between a contract and a sale (of a future thing), it is a general principle that prevalence or otherwise of work over the supply of matter. This means that, in principle, there is a contract of contract and not of sale whenever the performance of the subject matter constitutes a mere means for the production of the work and the work is the essential purpose of the transaction.
1. Difference between contract of sale and applato.
In the case of the sale of a future thing, i.e. whenever the object of the transaction is a good that has yet to be realised, an issue of great practical relevance and considerable legal complexity may arise as to whether the contract can be identified as a sale or, conversely, as a contract.
Under Italian law, for the purposes of differentiating between a contract of contract and a contract of sale (of a future thing), it is a general principle that the prevalence or otherwise of work over the supply of matter. This means that, in principle, there is a contract of contract and not of sale whenever the performance of the subject matter constitutes a mere means for the production of the work and the work is the essential purpose of the transaction.
Consider the classic example where the object of the transaction is a good that is part of the ordinary production of a business, but to which the principal requests that certain modifications be made. In such cases, according to case law, you will have contractedwhenever such changes, they consist not of marginal adjustments and secondary aimed at adapting them to the specific needs of the recipient of the service, but are such as to give rise to a new good, different from that of normal production. Italian jurisprudence focuses, in particular, not so much on the amount of work required to make such changes, but rather on the type of changes that have actually been made to the product. [1]
Moreover, should the contract provide for the commissioning and/or installation of the good itselfItalian jurisprudence makes a further distinction: a contract of sale (with an attached obligation of installation) is to be considered a contract of sale if
"the supply and, where appropriate, also the installation if the subcontractor of the works is the same manufacturer or usual trader of the products and materials in question, unless, of course, the contractual clauses oblige the subcontractor of the said works to carry out a quid novi with respect to the normal production series [...].
Where, on the other hand, the contractor is neither the manufacturer nor the reseller of the goods to be installed or put in place, the activity of installing a good performed by the service provider, being autonomous from that of production and sale, identifies or refers to a contract of contract, since the subject matter is considered to be the instrument for the performance of a work or the rendering of a service."[2]
2. What if the Vienna Convention applies?
A different approach occurs, on the other hand, in the event that the Vienna Conventionon the International Sale of Goods, 1980.
This Convention applies to the relationship whenever the subject matter of the contract is the sale between parties having their place of business in different states; specifically, Art. 1 of the Convention provides that it applies:
- "when these States are Contracting States; or
- "when the rules of private international law refer to the application of the law of a Contracting State."
Read also - Other articles on the Vienna Convention.
Of course, even in the case of the application of the Vienna Convention, the question still arises as to the identification of the contractual relationship and, specifically, whether the relationship can be identified as a sale (with the consequent application of the Convention itself), or whether it is a contract.
On this point, the Convention itself dictates interpretative principleswhich allow the parties to identify what is to be considered a 'sale'. L'Article 3(1) of the Conventionand, includes as a contract of sale, also
"[...] contracts for the supply of goods to be manufactured or produced shall be regarded as sales unless the party ordering them is to supply an essential part of the materials necessary for such manufacture or production."
Furthermore, the second paragraph of the aforementioned article states that:
"This Convention does not apply to contracts in which the predominant part of the obligation of the party supplying the goods consists in the provision of labour or other services."
This article also extends to the scope of the Convention contracts for which the seller, in addition to delivery of the thing and transfer of ownership, it also undertakes to offer labour or other servicesprovided that such services do not constitute the "preponderant part"(in English 'preponderant part'), of the seller's obligations.
In order to understand whether the contribution of labour/services is "predominant", a comparison must be made as to the economic value of the services offered and the value of the tangible component of the goods themselves,[3] as if they constituted two separate and distinct contracts.[4] Thus, where the obligation for the provision of labour or services exceeds 50 per cent of the seller's obligations, the Convention does not apply.[5] Some courts require that the value of the service obligation "clearly" exceed that of the goods.[6]
What essentially distinguishes the two approaches, is that the Italian Courts, tend to give less weight to the relationship between the economic value of the material and the services connected to it: the difference between a contract and a contract of sale, consists mainly in the obligation that the entrepreneur has undertaken, i.e. to identify whether he has undertaken to supply a product that is part of his normal production activity, or whether it is necessary to make substantial modifications to the (line) product, such as to give rise to a product that is different in its essence from the one normally produced by the supplier.
[1] Cass. Civ. 2001 nr. 6925; Cas. Civ. 1994 nr. 7697.
[2] Cass. Civ. 2014, no. 872.
[3] Obergericht Aargau, Switzerland, 3 March 2009; Bundesgerichtshof, 9 June 2008; Court of Arbitration of the International Chamber of Commerce, 2000.
[4] Kantonsgericht Zug, Switzerland, 14 December 2009
[5] Kantonsgericht Zug, Switzerland, 14 December 2009, available on the Internet at www.cisg-online.ch; Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry, Russia, Award No. 5/1997, English translation availa- ble on the Internet at www.cisg.law.pace.edu;
Bundesgericht, Switzerland, 18 May 2009, English translation available on the Internet at www.cisg.law.pace.edu (applying the Convention to a purchase of a packaging machine consisting of ten individual devices as well as several transportation and interconnection systems, which also imposed upon the seller the obligation to install the packaging machine and prepare its operation at the buyer's works).
[6] Kreisgericht Bern-Laupen, Switzerland, 29 January 1999, available on the Internet at www.cisg-online.ch.
The social security obligation of the Italian agent and the foreign principal.
The ENASARCO Foundation is the National Assistance Board for Agents and Sales Representatives and was established in 1938. Since 1973[1] ENASARCO has become an entity governed by private law that pursues purposes of public interest through the management of supplementary compulsory forms of pensions in favour of Commercial Agents and Representatives and whose public control is entrusted to the Ministry of Labour, Health and Social Policies and the Ministry of Economy and Finance.
ENASARCO's activities, legal nature and the tasks that the Foundation pursues are governed by the Regulation of Institutional Activities, which was recently amended on 1 January 2012.
Articles 1 and 2 of the Regulation impose the obligation of registration and consequently of contribution to the ENASARCO Foundation on all agents (whether in individual or company form) operating on the national territory on behalf of Italian principals or foreign principals having their head office or any .
There is nothing in the 2012 Regulations on the obligation of registration of agents operating in Italy in favour of principals from the European Union who do not have a head office or dependency in Italy. This regulatory 'gap' has been filled by a circular of ENASARCO[2] and an interpellation by the Ministry of Labour[3] which also extended the obligation to register to the following categories:[4]
- for agents operating in Italy and abroad, provided that the agent resides in Italy and performs a substantial part of its activities there;
- for agents operating in Italy and abroad who do not reside in Italy, provided that the agent has its centre of interests in Italy (assessed by reference to the number of services rendered, the duration of the activity, and the will of the person concerned);
- for agents who habitually work in Italy and who go to perform activities exclusively abroad, provided that the duration of such activity does not exceed twenty-four months.
As to the annual amount to be set aside by the principal in the FIRR, it is quantified by the AEC industry 2014 as follows:[5]
"Single agent or sales representative in
- 4% on the portion of commissions up to Euro 12,400.00 per year;
- 2% on the portion of commissions between Euro 12,400.01 per year and Euro 18,600.00 per year;
- 1 % on the portion of commissions exceeding Euro 18,600.00 per year.
Agent or multi-firm representative:
- 4% on the portion of commissions up to Euro 6,200.00 per year;
- 2% on the portion of commissions between Euro 6,200.01 per year and Euro 9,300.00 per year;
- 1 % on the portion of commissions exceeding Euro 9,300.00 per year."
The compulsory social security rates, which the principal is required to pay annually to ENASARCO, are regulated in Article 4 of the Regulation and are equal to:
| 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 |
| 13,50% | 13,75% | 14,20% | 14,65% | 15,10% | 15,55% | 16,00% | 16,50% | 17,00% |
Contributions are calculated on all sums due to the agent for any reason in connection with the agency relationship, even if not yet settled, including advances and premiums (art. 4 of the Rules), but within the mandatory limit of € 37,500.00 per year if the agent is engaged in business for a single principal and € 25,000.00 for each principal of a multi-firm agent (art. 5 of the Rules).
In the event of failure to pay contributions on the part of the principal, Article 36 of the Regulation imposes as a penalty the payment of a rate of 5.5% per annum on the amount of contributions not paid by the due date, with a cap of 40%.
It is important to emphasise that although the obligation to pay contributions is borne equally by the principal and the agent, it should be noted that the principal is solely responsible for the payment of contributions, even for the part borne by the agent, and that such payments must be made '.with a maximum periodicity of three months, in relation to sums owed to the agent for any reason."
As for the limitation period of ENASARCO's right to claim payment of contributions, it is five years.[7] On the other hand, the prescriptive term of the agent's action for damages for failure to pay or insufficient payment of ENASARCO contributions is ten years, commencing from the time when the agent, having reached retirement age, loses the relative right or sees it reduced by reason of the omission.[8]
As already mentioned in the introductory part of this article, to which we refer,[9] the pension scheme managed by ENASARCO represents a unique case not only in Europe, but also in Italy, since it is supplementary to the pension that agents are obliged to pay personally to INPS.[10] Representatives and commercial agents are therefore obliged to pay contributions to two bodies: on the one hand, personally to Inps and, on the other hand, to ENASARCO, whose contribution, as we have seen, is paid by the principal as withholding agent.[11]
As regards the quantification of INPS contributions, a variable rate of approximately 20/23% is envisaged. It should be noted, however, that on the portion of income exceeding € 100,324.00 for those enrolled after 01.01.1996 (and € 76,718.00 for those enrolled before that date), there is no obligation to pay INPS.
[1] Pursuant to Law No. 12 of 2 February 1973
[2] AIS Circular No. 2/2012 protocol number AIS/46.
[3] Ministry of Labour Interpretation No. 32/2013.
[4] See also Baldi-Venezia, The Agency Contract, 2014, GIUFFRÈ.
[5] The FIRR provided by the 2014 AEC industry is given as an example; however, it is noted that the FIRR provided by the other AECs in force to date are generally in line with this collective agreement.
[6] Article 7, Law No. 12 of 2 February 1973.
[7] Cass. 1983 No. 5532.
[8] Cass. Civ. 1983 No. 5532.
[9] See § 1 of this article.
[10] See footnote 1
[11] The recognition of this special status of the Fund dates back to Law 613/1966 and has remained unchanged to this day.
Vienna Convention and termination of the contract of sale. Limitation and prescription periods of the action.
As already noted, the Vienna Convention does not deal with the limitation of actionswhich, according to the most authoritative doctrine[1] and case law,[2] is governed by the domestic rules. The limitation period, therefore, pursuant to Article 7(2) of the same Convention, is governed by the rules of the applicable law and, in the case of Italian law, by Article 1495 of the Civil Code et seq.
- Time limits under Art. 39 and 49 of the Convention
In contrast, the Convention expressly regulates the time limits for the forfeiture of the purchaser's right to warranty. Art. 39 reads as follows:
- The purchaser forfeits the right to rely on a lack of conformity if he does not report it to the seller, specifying the nature of the lack of conformity, within a period of one year. reasonable termfrom the time it found or should have found it.
- In all cases, the purchaser loses the right to assert a conformity defect if he does not report it at the latest within a period of two yearsfrom the date on which the goods were actually delivered to it, unless such expiry is incompatible with the duration of a contractual guarantee.
Art. 39 thus provides that the buyer's right to rely on a lack of conformity of the goods, including the right to terminate the contract, ceases to exist if he does not report it to the seller within a reasonable time after he has discovered it or ought to have discovered it and, in any case at the latest within two years from the date on which the goods were actually delivered to it.
Contrary to civil law rules, in the event that the purchaser wishes to request termination of the contractual relationship, the Convention provides for a further limitation period, in addition to that described above for reporting the defect, which requires it to notify the seller of its intention to declare the contract terminated. Art 49 of the Convention provides as follows:
- The purchaser may declare the contract terminated [avoided]:
- if the seller's non-performance of any of its obligations under the contract or this Convention constitutes a fundamental breach of the contract; [...].
- However, when the seller has delivered the goods, the buyer's right to declare the contract terminated expires if it has not done so:
- in the event of late delivery, within a reasonable time from the time it became aware that delivery had taken place;
- in the event of non-compliance other than late delivery, within a reasonable deadline.
This article contemplates the most radical of remedies for non-performance by the seller: termination of the contract. Para. (2) of Art. 49 provides that where the buyer has delivered, the purchaser loses the right to terminate the contract if it does not exercise it within a "term reasonable" through its own unilateral declaration.
The buyer under the Vienna Convention must therefore:
- within a reasonable time (and at the latest within two years after delivery) to notify the defect (Art. 39);
- within a reasonable time after delivery, declare the contract terminated (Art. 49).
On the interpretation of 'reasonable time' in Art. 49 for the declaration of termination of a contract, the Courts have pronounced themselves taking into account the type of goods sold and product sector.
The period of five months from the moment the buyer informed the seller of the defects in the goods was deemed unreasonable;[3] a declaration of termination made eight weeks after the buyer became aware of the existence of the defects was also held to be out of time;[4] "The period of eight months after the buyer should have known of the defects was also held to be 'unreasonable'.[5] On the other hand, the period of one month to five weeks was considered reasonable and therefore timely to make the declaration referred to in Art. 49 (2) (b).[6]
Moreover, according to authoritative doctrine, the reasonable period of time referred to in Art. 49(2) may never exceed the period of time referred to in Art. 39(2), i.e. two years from the date on which the goods were actually delivered.
"The buyer loses the right to rely on the lack of conformity and consequently to terminate the contract. In such a case, the time limit provided for in Art. 39 prevails over that provided for in Art. 49(2)(B); the date of the complaint under Art. 39 and that of the declaration of termination under Art. 49 may not coincide, but the time limit for both starts at the same time, and has the same expiry date [note date of actual delivery].[7]"
This implies that within a maximum of two years after delivery, the buyer must either denounce the defects (ex art. 39) or declare the contract void (ex art. 49)if it intends to seek termination of the contractual relationship in court.
About the mode with which such a declaration must be made, Article 26 of the Convention provides:
"A declaration of termination is effective only if it is made by notice to the other party."
This implies that this declaration must contain expressly and unequivocally that the contract has been terminated and therefore terminated.[8]
[1] Digest of Case Law on the United Nations Convention on Contracts for the International Sale of Goods, UNCITRALS, 2016 UNITED NATIONS, 2016 Edition, p. 25; Schlechtriem, Internationales UN-Kaufrecht, Tübingen 2007, 124, n. 162; Honsel, Das einheitliche UN-Kaufrecht, available at. http://20iahre.cisg-library.org."
[2] Bundesgerichtshof, Germany, 23 October 2013, Internationales Handelsrecht 2014, 25 = CISG-online No. 2474; Bundesgericht, Switzerland, 18 May 2009, English translation available on the Internet at www.cisg.law.pace.edu; Appellationsgericht Basel-Stadt, Switzerland, 26 September 2008, English translation available on the Internet at www.cisg.law.pace.edu; Supreme Court, Slovakia, 30 April 2008, English translation available on the Internet at www.cisg.law.pace.edu; Oberlandesgericht Köln, Germany, 13 February, 2006, also in Internationales Handeslrecht 2006, 145 ff.; Cour d'appel de Versailles, France, 13 October 2005, English translation available on the Internet at www.cisg.law.pace.edu, Tribunale di Padova, sez. Este, 20 February 2004, available at http://www.uncitral.org/docs/clout/ITA/ITA_100106_FT_clean.pdf.
[3] Bundesgerichtshof, Germany, 15 February 1995; see also Oberlandesgericht München, Germany, 2 March 1994] (4 months).
[4] Oberlandesgericht Koblenz, Germany, 31 January 1997.
[5] Cour d'appel Paris, France, 14 June 2001; see also Tribunal of International Commercial Arbitration at the Russian Federation Chamber of Commerce and Industry, Russia, 22 October 1998. (which considered a complaint made after five or six months to be untimely); Hof 's-Hertogenbosch, Denmark, 11 October 2005.
[6] [Tribunal cantonal du canton de Valais, Switzerland, 21 February 2005] (one month); CLOUT case No. 165 [Oberlandesgericht Oldenburg, Germany, 1 February 1995] (five weeks); Bundesgericht, Switzerland, 18 May 2009, Internationales Handelsrecht 2010, 27 (one to two months).
[7] Bianca and Bonell, Commentary on the Vienna Convention on the International Sale of Goods, New Civil Laws Annotated, CEDAM, Padua, 1989.
[8] Kantonsgericht des Kantons Zug, Switzerland, 30 August 2007; UNCITRAL Digest of Case Law on the United Nations Convention on Contracts for the International Sale of Goods, UNCITRALS, 2016 UNITED NATIONS, 2016 Edition, p. 233.
The agent's right to commission: when is the principal obliged to pay?
Commission is normally the agent's main means of remuneration, consisting of a percentage related to the value of the business promoted by the agent. The Civil Code regulates the right to commission in Art. 1748 of the Civil Code. Specifically, para. (1) of that article provides that:
"For all business concluded during the contract, the agent is entitled to the commission when the transaction has been concluded as a result of its intervention. "
Moreover, the fourth paragraph of Article 1748 of the Civil Code reads as follows:
"The agent is obliged to return the commissions collected only if and to the extent that it is certain that the contract between the third party and the principal will not be performed for reasons not attributable to the principal."
The agent is therefore entitled to the commission only if there is the conclusion of a contract between the principal and the third partycommission is not due and, in any event, if it has already been paid to the agent, must be returned to the principal if the third party fails to perform the contractfor causes not attributable to the principal itself.
The above articles set out the prerequisites for the agent's entitlement to commission to arise. This moment, however, must be absolutely distinct from the moment of accrual of the commission itself, i.e. when the agent may claim its payment (see also on this point The 'star of belief' in the agency contract).
This distinction follows from a reading of Art. 1748(4) of the Civil Code:
"Unless otherwise agreed, the commission shall be payable to the agent from the moment and to the extent where the principal has rendered or should have rendered the performance under the contract with the third party. The agent shall be entitled to commission at the latest, without limitation, from the time and to the extent that the third party has rendered or should have rendered the performance if the principal had rendered the performance at its expense."
A reading of this rule shows that there are two distinct moments on which the actual accrual of the commission depends:
- when the service is performed by the principal (the so-called 'general' criterion);
- at the latest, and without fail, when the service was performed by the third party (the good performance of the business).
With reference to the first pointcommission accrues from when the principal performs its service, or should have performed it by virtue of the contract concluded with the third party (i.e. the customer). This constitutes the so-called "general" regime, which applies whenever the parties have not agreed otherwise.
On this point, it must certainly be emphasised that the rule does not expressly refer only to the moment in which the principal performs his service, but rather to the moment in which he should have executed itaccording to the agreements he had made with the client.
Think of the classic example where the principal undertakes to deliver the goods by a certain date: if the principal does not send the goods by that date, the commission will still be due to the agent, as the failure to perform is attributable to a default on the part of the principal.
An interesting aspect is that the article obliges the principal to pay the commission to the agent, only in the event that the same is actually required to perform the service under the contract. This implies that if the principal's non-performance is due to causes not attributable to it, the agent's right to payment of the commission itself is forfeited.
Returning to the case analysed above, i.e. the delivery of goods: if the principal has not sent the goods due to force majeure, i.e. because the customer has not paid for the goods sold or the balance of the down payment in the manner agreed upon by the parties, the principal will no longer be liable to pay the commission.
Therefore, the right to the commission accrueda, unless otherwise agreed between the parties, when the principal's failure to perform constitutes a breach vis-à-vis the third party.
The general criterion described above is however derogable by the parties, who may agree otherwise, postponing or bringing forward the time at which the right to commission accrues, anchoring it at a different time than the principal's performance.
This option granted to the contracting parties is ceiling mandatory, which is enshrined in the second sentence of Art. 1748(4) of the Civil Code:
"the commission shall be due to the agent, at the latest, from the time and to the extent that the third party has performed or would have had to perform the service if the principal had performed the service at its expense."
This means, in essence, that it is possible to postpone the accrual of commissions, as long as it is made payment by the third partyi.e. at the latest upon the successful performance of the business. The latter hypothesis, however, must always be subject to the principal having performed its own performance. In essence, the reference to the time when the third party should have rendered the performance must be interpreted as meaning that the agent may treat the commission as due even in the event of non-payment by the customer, but only where this results from the default of the principal (cf. on this point Venezia-Baldi, Il contratto di agenzia, p. 273, Giuffrè Editore, 2014).
With the following examples, an attempt is made to make the above case clearer:
- the principal correctly delivers the goods to the customer, who, notwithstanding the principal's performance, does not pay the price of the goods within the agreed time limit: in this case, the principal cannot be considered to be obliged to pay the commission, since the non-performance of the third party is not justified by a non-performance of the principal himself
- the principal delivers the wrong goods to the customer, who fails to pay the price within the agreed time limit. In this case, it may reasonably be held that payment of the commission is due, since the third party's non-performance is caused by the principal's own non-performance (on this point cf. Bortolitti, Distribution Contracts, p. 285, 2016, Wolters Kluver).
The agent's right to inspect the principal's books.
Article 1749 of the Civil Code grants the agent the right to access the principal's accounting records, ensuring transparency in the determination of commissions. It is a central rule in the balancing of the contractual relationship, especially in cases where the agent does not have powers of representation. This contribution analyses the contents of the article, the manner of exercising the right of access and the related procedural profiles, also in the light of the most recent case law.
_____________________________
Article 1749 of the Civil Code grants the agent the right to inspect the principal's accounting records. The purpose of this rule is to make the ratio as balanced as possible between the agent and the principal, especially in cases where the agent himself has no powers of representation and is therefore not in a position to directly verify what business has been concluded by the principal.
Specifically, the second paragraph of Article 1749 of the Civil Code,[1] provides that:
"the principal delivers to the agent a bank statement commissions due at the latest on the last day of the month following the quarter in which they accrued. "
The third paragraph of Article 1749 of the Civil Code states that:
"The agent is entitled to demand that he be provided with all the information necessary to verify the amount of the commission paid and in particular an extract from the books."
This article is essentially based on the general principle that the principal must act with loyalty and good faith vis-à-vis the agent, imposing, on the one hand, on the principal itself the obligation to make available to the agent, at least on a quarterly basis, a statement of the commissions due, as analytical as possible, and, on the other hand, the agent must have the possibility of verifying that the commissions paid have been calculated correctly.
The importance of this rule is underlined by the fourth paragraph of the same article, which stipulates thenon-derogationeven partial, of the obligations set out therein:
"any agreement contrary to the provisions of this article shall be null and void."
The main procedural tool used by the agent to assert this right is Article 210 of the Code of Civil Procedure. This rule states that the examining magistrate, upon application by a party, may order the other party or a third party to "produce in court a document or other thing whose acquisition it considers necessary for the trial".
The practical application of this rule is not always easy to solve (on the contrary...) and Italian jurisprudence has often had to solve numerous problems related to it.
First of all, it is important to emphasise that, for our legal system, the investigative tool provided for in 210 c.p.c. has residual nature and may only be used if the proof of the fact is not obtainable by the applicant and if the initiative is not merely for exploratory purposes;[2] the granting of such an application is left to the discretion of the court, which may admit it only if it finds that
"the proof of the fact sought to be proved cannot be acquired aliunde, since the initiative cannot have merely exploratory purposes or replace the burden of proof placed on the party."[3]
It follows that the agent, who bears the burden of proving that business has been concluded, may not use that instrument to make up for the failure to comply with one of its evidentiary requirements and must prove that the failure to provide evidence is not attributable to it, and must also specifically indicate the documents from which it requests an extract (which must be directly or indirectly identifiable), since a request that is too general would in fact be exploratory and therefore inadmissible.
According to a recent Supreme Court ruling,
"the agent has a genuine right of access to the books held by the principal that are useful and necessary for the payment of commissions and for the transparent management of the relationship in accordance with the principles of good faith and fair dealing. Accordingly, the principal, when requested (even judicially), has a real obligation to provide the documentation and information requested by the agent in order to enable the exact reconstruction of the agency relationship. "[4]
The sentence continues:
"It is, however, incumbent on the agent acting in order to obtain the production of documents to infer and prove the existence of an interest in bringing proceedings, with circumstantial reference to the relevant events of the relationship (including, first and foremost, the sending or not of commission statements and their content) and an indication of the rights, certain or determinable, for the ascertainment of which the application is made."
According to this principle, an application requesting that the principal be generically ordered to produce statements of account of all customers that the agent has supplied (e.g. without indicating their names), or of customers that the principal has supplied directly in the contract territory (and on whose successful orders the agent would have received indirect commissions), would be likely to be held inadmissible as too general and thus exploratory.
If the judge recognises that the above-mentioned requirements are fulfilled, he may issue an order for the production of such extracts, whereby, in practice (at least in my personal experience...) the principal is ordered to produce the commission statements/accounting sheets relating to the customers for whom the agent has filed an application formerly Article 210 c.p.c.
In essence, the documents to which the agent's right of access applies will be:[5]
- the sales invoices issued to customers;
- the copy of the vat books, the delivery notes of the goods;
- the ENASARCO payment receipts and in any case all those documents necessary for the verification of the individual deal;
- as well as the commission statementsall obviously referring to the area and the period in which the agent carried out his duties.
The judge, having obtained the documentation, may then order a technical accounting expert's report, aimed at verifying the orders received by the principal and counting the payment of commissions.
From a practical point of view, it must also be pointed out that this can often lead to very significant practical problems, arising from the fact that from the documents produced, and elaborated by the expert, often a copious amount of information emerges that was previously unknown (to at least one) of the parties and that this information can give rise to "a case, in the case."
Finally, it should be noted that Art. 210 of the Code of Civil Procedure is not the only instrument in the hands of the agent, who, according to the majority of case law, is in any event entitled to request the commission statement pursuant to Art. 1749 of the Civil Code, also autonomously by way of monitory proceedings.[6]
As may be understood, this issue is of absolute importance, since fundamental rights derive from Article 1749 of the Civil Code that ultimately enable the agent to prove its right to payment of commissions.
[1] Article that transposed by Legislative Decree No. 64 of 1999, Art. 12(2) of Directive 86/653/EEC, which gave the agent the right "to demand that he be provided with all information, in particular a extract from the booksavailable to the principal, necessary to verify the amount of commission due to him. "
[2] See Cass. Civ. 2011 no. 14968
[3] Cass. Civ. 2011, no. 26151.
[4] Cass. Civ. Sec. labour, no. 19319 of 2016.
[5] See Buffa, Bortolotti & Mathis, Distribution Contracts, Wolters Kluver, 2016.
[6] Cass. Civ. 2010, no. 20707.