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]

  1. is a distribution contract, having as its main object and purpose the marketing of the grantor's products;
  2. 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;
  3. 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).
  4. 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.

by admin

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.

(cf. also Collective bargaining. Origins, value and enforceability. And if a contractor is a foreigner, do they apply or not?)

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).

by admin

Contratto di appalto e vendita

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.

by admin

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.

by admin

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.

  1. 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:

  1. 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.
  2. 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:

  1. The purchaser may declare the contract terminated [avoided]:
    1. if the seller's non-performance of any of its obligations under the contract or this Convention constitutes a fundamental breach of the contract; [...].
  2. However, when the seller has delivered the goods, the buyer's right to declare the contract terminated expires if it has not done so:
    1. in the event of late delivery, within a reasonable time from the time it became aware that delivery had taken place;
    2. 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.

 

by admin

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).

by admin

The agent's right to inspect the principal's books.

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.

by admin

Unilateral changes to the agency contract by the principal.

When dealing with the subject of unilateral contractual modifications, it is necessary to recall the existence of a fundamental principle of law, i.e. the 'consent of the parties' (under arts. 1325 and 1372 of the Civil Code). Based on this principle, the parties' agreement is necessary for the valid modification of pre-existing contractual agreements (on this point see also The power of the principal to change the client portfolio of his agent). The Supreme Court, precisely on this basis of law, considered null and void precisely a clause inserted in an agency contract that allowed the principal to change the commission rates at will. (Cass. Civ. 1997 No. 11003).

That being so, and on the basis of the case law cited above, it may reasonably be held that a clause conferring the power to unilaterally amend contractual terms must tend to be considered null and void, or at least must be interpreted consistently with the principles dictated by the ECA, if applicable to the relationship.

However, it should be borne in mind that jurisprudence, while not directly addressing the issue, tends to take for granted the nullity of the clause in the contract that differs from the AEC and its replacement by the latter's provision, (Cass. Civ. 2000 no. 8133; Cass. Civ. 2004 No. 10774) referring in particular to Article 2077 of the Civil Code.

Article 2 of the 2009 CSA regulates what are the principal's powers to unilaterally change, i.e. without the need for express approval by the agent, the commissions and products promoted by the agent. This rule provides that, unless otherwise agreed by the parties, such changes may be:

"by minorshall mean reductions of up to 51T3T of the agent's or representative's commissions in the calendar year (1 January - 31 December) preceding the change, or in the twelve months preceding the change if the preceding year was not worked in full;
by medium size, meaning reductions that affect more than 5% and up to 15% of the agent's or representative's commissions in the calendar year (1 January - 31 December) preceding the change, or in the twelve months preceding the change if the preceding year was not worked in full;
by majorby which is meant reductions in excess of 15% of the agent's or representative's commissions in the calendar year (1 January - 31 December) preceding the variation, or in the twelve months preceding the variation if the previous year was not worked in full. "

The rule also states that:

"The variations of minor may be implemented upon written notice to the agent or representative to be given without notice. Such changes shall be effective upon receipt of written notice from the principal by the agent or representative.
Medium and major variations may be implemented upon written notice to the agent or representative to be given, in the case of variations of medium-sized, at least two months in advance, unless otherwise agreed in writing between the parties. In the event of changes in major written notice may not be less than that provided for the termination of the relationshipunless the parties agree in writing to a different term. If the agent or representative communicates, within the peremptory term of thirty days from the receipt of the communication, that it does not accept the medium or major variations, the principal's communication shall constitute notice for the termination of the agency or representation relationship, at the initiative of the principal. "

"L'set of minor variations made in a period of 18 months prior to the last variation, will be considered as single variationfor the application of this Article 2, both for the purpose of requiring notice and for the purpose of considering the relationship as terminated at the initiative of the principal. For agents and representatives acting as sole agents, all minor variations made within a period of 24 months preceding the last variation shall be deemed to be a single variation. "

It follows from reading this article, therefore, that:

  • on the one hand the principal is conferred a potestative right to make changes that lead to a decrease in the products promoted and the commission of its agent;
  • on the other hand the agent, for the medium to large variations, has the right to communicate its refusal within 30 days from receipt of the notice, thus transforming it into a notice of termination at the initiative of the principal.

The above-mentioned rule only regulates changes to the contract by the principal, aimed at decreasing the amount of the commission and the area (products, clientele, territory).

Since Art. 1752 of the Civil Code provides that the agency agreement must be evidenced in writing, it follows that amendments are also valid only if they comply with this requirement. Importantly, the law does not require the written form "ad substantiam"but "ad probationem"This implies that it is not necessary for the modification, in order for it to be effective between the parties, to be expressly agreed upon in writing, but it is sufficient that the agreement on such a modification can be inferred even only from tacit conduct of the parties and that there is a written record of such conduct.

by admin

The termination indemnity in the agency contract: Art. 1751 of the Civil Code and AEC compared.

As has already been pointed out, severance pay in Italy follows a binary systemon the one hand, the discipline governed by theArticle 1751 of the Civil Code and, on the other hand, the regulation of AECs. (cf. also Collective bargaining. Origins, value and enforceability. And if a contractor is a foreigner, do they apply or not?)

The current version of Article 1751 of the Civil Code, as amended by Legislative Decree 1999 No. 65, implementing Directive 86/853/EEC, provides that:

"upon termination of the relationship, the principal is obliged to pay the agent an indemnity if the following conditions are fulfilled:

  1. the agent has procured new customers to the principal or significantly developed business with existing customers;
  2. the principal still receive substantial benefits arising from business with such customers;
  3. the payment of this allowance is fairtaking into account all the circumstances of the case, in particular the commissions that the agent loses and that result from business with such customers."

The third paragraph of the same article states that theallowance is not due when:

  • the principal terminates the contract for a default attributable to the agent, which, because of its seriousness, does not permit the continuation, even temporarily, of the relationship;
  • l'agent terminates the contractunless the termination is justified by circumstances attributable to the principal or by circumstances attributable to the agent, such as age, infirmity or illness, for which the agent can no longer reasonably be asked to continue the activity;
  • when, pursuant to an agreement with the principal, theagent assigns to a third party the rights and obligations which it has by virtue of the agency contract.

About the amount of the indemnity, pursuant to Article 1751(3) of the Civil Code, it:

"may not exceed a figure equivalent to oneannual allowance calculated on the basis of the annual average of the remuneration received by the agent over the last five years and, if the contract dates back less than five years, on the average of the period in question."

The criterion in Article 1751 of the Civil Code, does not contain any calculation methodbut only a ceiling (i.e. an annuity to be calculated on the basis of the average commission of the last five years) and two conditions to the fulfilment of which the accrual of the indemnity is subject, namely that

  • the agent has procured new customers and/or 'intensified' the turnover of existing ones;
  • the indemnity is "equitable" in light of "all the circumstances of the case including the commissions that the agent loses as a result of the termination of the contract.

On the other hand, the contractual regulation of AECs establishes a certain and precise method of calculation based on three different items:

  • the indemnity for termination of the relationship (the 'FIRR', consisting of an annual provision in the special fund managed by ENASARCO) calculated on the basis of the AEC;
  • l'supplementary customer allowancepaid to the agent even in the absence of an increase in clientele, (equal to approx. 4% on the total amount of commissions and other sums accrued);
  • l'allowance meritocraticlinked to an increase in customers and/or turnover.

As can be seen, both systems have within them both advantages and disadvantages for the contracting parties.

I advantages for the agent of theindemnity pursuant to Article 1751 c.c. are the fact that the compensation paid by the court is often higher than that provided for in the CEC.

The disadvantages normally lie in the fact that:

  • only a maximum is set, but a calculation criterion is absolutely missing;
  • the burden of proving the increase/intensification of the clientele and the fairness of the indemnity rests entirely on the agent;
  • the indemnity is excluded in all cases where the agent is terminated from the contract without just cause.[1]

As for the allowance calculated according to the AEC i advantages are quite obvious, given that:

  • a clear and defined calculation criterion is configured;
  • FIRR and client indemnity are due (subject to exceptions) at all times, even in the event of termination by the party;
  • no burden of proof is placed on the agent.

As to the disadvantages for the agent, it should be noted that, in fact, the indemnity paid under Article 1751 of the Civil Code is very often higher than that guaranteed by the AEC.

It should be noted that the European Court of Justice, in a ruling of 23 March 2006,[2] ha disputed the legitimacy of the severance payment as regulated by the AEC. Such agreements, according to the Court, may only derogate from the rules laid down in Directive 86/653/EEC if, on analysis ex antethe application of the AEC would result in the agent being treated economically more favourably than under Article 1751 of the Civil Code. Now, since there are no calculation tools that make it possible to predict the amount of the codified indemnity and it can only be known and calculated after the termination of the relationship and since, according to the Court, the assessment as to whether the treatment of the AEC is (always) more favourable than the civil law discipline must be made ex anteit is clear that, following this reasoning, only a calculation system that always guarantees the maximum allowance can be considered in line with the principles dictated by the directive and the ruling of the Court of Justice.[3]

Despite the ruling of the Court of Justice, However, the orientation of the Supreme Court appears to be in the process of consolidation according to which the criteria for quantifying the severance indemnity provided for by collective bargaining must in any event be considered as a minimum treatment which must be guaranteed to the agent, subject to the need for the judge, once he has ascertained the existence or non-existence of the requirements provided for by Art. 1751 of the Civil Code, to carry out a kind of case-by-case assessment in order to evaluate the fairness of the solution resulting from the AEC, with discretionary power, taking into account all the circumstances of the concrete case.[4]

It should be noted, however, that there is a minority orientation of the jurisprudence on the merits, which has held the AEC to be inapplicable to our system and has therefore not recognised the discipline set forth therein as a guaranteed minimum for the agent.[5]

____________________

[1] Art. 1751 (2) (1): "The indemnity shall not be due [...] when the agent terminates the contract, unless the termination is justified by circumstances attributable to the principal or by circumstances attributable to the agent, such as age, infirmity or illness, for which the agent can no longer reasonably be required to continue the activity"

[2] Court of Justice 2006, C-465/04.

[3] Baldi-Venezia, Il contratto di agenzia, 2014, GIUFFRÈ; Bortolotti, L'indennità di risoluzione del rapporto secondo il nuovo Accordo Economico Collettivo Settore industria, 2014, www.newsmercati.it.

[4] Cass. Civ. 2009 no. 12724; Cass. Civ. 2012 no. 8295; Cass. Civ. 2013 no. 18413; Cass. Civ. 2014 no. 7567; Cf. Baldi-Venezia, Il contratto di agenzia, 2014, GIUFFRÈ, "This solution does not appear satisfactory and, above all, does not concretely identify the quantification criteria to be adopted, leaving the judge of merit with a wide margin of discretion, which does not militate in favour of the future identification of precise and uniform criteria to the detriment of a principle of certainty'..

[5] Tribunale Treviso 29 May 2008; Tribunale Treviso 8 June 2008; Tribunale di Roma 11 July 2008.

by admin

The natural person agent, parasubordinate work and the employment rite.

Law No. 533/73 introduced into the Italian procedural system the so-called "rito lavoro", a procedure characterised by the principles of orality and immediacy. Point 3 of paragraph 1 of Article 409 of the Code of Civil Procedure, introduced by this Law expressly provides that the following are also subject to the labour procedure

"agency and commercial representation relationships [...] which take the form of continuous and coordinated work, predominantly personal even if not of a subordinate nature."

Therefore, disputes relating to agency and representation relationships are also subject to the labour court if the work performance is characterised by the continuity, from coordination and the prevailing personality (cf. also The agency contract and the employment relationship: distinguishing criteria and evaluation parameters).

A third figure, namely that of 'parasubordinate' work, has thus arisen alongside the already existing categories of self-employed and subordinate workers. It was first elaborated by doctrine, and then transposed by case law itself,[1] to respond to a real need to define those self-employed relationships in which, in fact, the worker is in a position of dependence towards the principal that is less strong than that of a subordinate worker, but certainly much more binding than self-employed relationships. In this way, a category of subjects has been enucleated that is deemed worthy of even stronger protection, which brings them closer in this respect to subordinate workers.

The question arises as to whether only commercial agents acting as natural persons are subject to labour proceedings, or also agents who, although they operate in the form of corporations, have a structure such that the personal element of the service prevails (e.g. single-member companies). According to the most recent case law of the Court of Cassation, they are deemed to be subject to the employment procedure, only disputes involving agents acting as natural personsexcluding all cases of an agent operating in the form of a company, be it a partnership or a corporation, regular or irregular.[2] In a recent ruling, the Supreme Court stated that:[3]

"where the agent is a company or avails itself of an autonomous entrepreneurial structure, the personal character of the service is lost, with the consequence that the relationship can no longer be brought under the provision of Article 409 of the Code of Civil Procedure and, therefore, to the employment rite, since, where the capacity of agent is assumed by a corporation or partnership, the company, even if lacking legal personality, still represents an autonomous centre of legal relations that stands between the partner and the principal".

Jurisprudence also holds that the natural person agent who performs the its own activity using its own personnel, provided that in the relationship the organisational aspect of the agent does not prevail over that of personal performance:[4] Although the personality of the service must be prevalent, it need not be exclusive. On the other hand, parasubordination must be excluded if the activity is carried out according to entrepreneurial criteria such that the agent merely coordinates and directs his collaborators, without performing any promotional activity.[5] (cf. also What is the difference between an agency contract and a business intermediary?)

Parasubordinate workers are subject to the same legal treatment as employees not only with regard to the application of the labour law, but also to the right to the revaluation of labour claims[6] and the substantive legal institution of the invalidity of waivers and settlements relating to the employee's unavailable rights pursuant to Article 2113 of the Civil Code, which we will discuss in the following section.

_______________________

[1] Cass. civ. Sec. labor, 1998, no. 4580.

[2] Civil cassation 2012, no. 2158, By far the prevailing case law holds, however, that when the agent is a corporation or makes use of an autonomous entrepreneurial structure, the personal character of the service ceases to exist and the relationship cannot be brought within the scope of Article 409, given that if the capacity of agent is assumed by a corporation or partnership, the corporation, even if lacking legal personality, still constitutes an autonomous centre of legal relations that stands between the shareholder and the principal; Civil cassation no. 2509/1997; Civil cassation no. 9547/2001; Civil cassation no. 14813/2005; Civil cassation no. 6351/2006; Civil cassation no. 15535/2011; App. Florence, 11/04/2007 "Disputes between the agent and the principal fall within the jurisdiction of the labour court if the activity performed has the characteristics of parasubordination, i.e. where the agent performs the activity predominantly with personal labour. This requirement is lacking when the agent performs the activity in the form of a company, even a partnership or an irregular or de facto one, and also when the activity, although performed on an individual basis, is characterised by the prevalence of the organisational moment of the work of its employees and collaborators over the personal contribution.'; Bortolotti, Il contratto di agenzia commerciale, CEDAM, 2007.

[3] Cass. Civ. 2005 No. 14813.

[4] See also Cass. Civ. Sec. lavoro, 1998 No. 14454: which excluded the predominantly personal character of the agent ".that he had availed himself of two employees, a driver, a warehouseman, several vehicles and, above all, no less than six sub-agents, taking on the economic burden of the entire organisation also in terms of remuneration'.

[5] Cass. civ. Sec. II Ord., 22/03/2006, no. 6351.

[6] Art. 429, third paragraph, c.p.c. ".The court, when pronouncing a judgment sentencing the payment of sums of money in respect of employment claims, must determine, in addition to interest at the legal rate, the greater damage, if any, suffered by the employee as a result of the diminution in the value of his claim, sentencing him to pay the relevant sum with effect from the day on which the right accrued."

by admin