Which waivers and transactions can be challenged by the commercial agent pursuant to art. 2113 cc?

Concurrently with the closure of an agency relationship, it is customary for the parties to formalize with a document all the existing disputes between them (indemnity, commissions still due, etc.).

Evaluating the validity and effectiveness of this document is far from easy, given that it depends on various circumstances, which are not limited only to an analysis and interpretation of the content of the text, but also from the moment in which this agreement was drawn up (i.e. before or after the termination of the relationship), as well as the legal form covered by the agent (natural person or company).

The art. 6 of the law 11 August 1973, n. 533 has fully amended art. 2113 cc, relating to the invalidity of waivers and transactions, extending (as will be developed below) the application to all the relationships provided for by art. 409 cpc, including agency relationships. The civil law provides in the first paragraph that:

"waivers and transactions, which have as their object the rights of the employee deriving from mandatory provisions of the law and collective contracts or agreements concerning the relations referred to in Article 409 of the Code of Civil Procedure, are not valid. "

Para. (2) imposed a time limit of six months for contestation starting from the date of termination of the relationship, or of the waiver or settlement if this occurred at a later date; the contestation may be executed, according to para. (3) of Art. 2113 of the Civil Code, in a manner that is not particularly orthodox, i.e. "with any written deed, including out-of-court, of the worker capable of disclosing the will. "

The fourth and last paragraph of art. 2113 of the Italian Civil Code, on the other hand, provides that waivers and transactions are always valid if formalized in a protected location within the terms provided for by art. 410 of the Code of Civil Procedure, that is, before the labor court, or the territorial management of labor.

The rule therefore sets itself as a limit to the faculty of disposing of the rights of the worker and has the purpose of offering the same an instrument, consisting in the faculty of challenging the dispositive acts that may have been determined by a situation of imbalance in the contractual relationship, provided that:

  • the subject of the agreement are real waivers and transactions and not mere receipts;
  • in terms of structure, characteristics and operating methods, the relationship falls within those mentioned in art. 409 cpc;
  • the subject of the transaction are mandatory provisions of the law of collective bargaining.

Below is a brief review of the points listed above.

1. Receipts, Waivers and Settlements.

In the first instance, art. 2113 of the Italian Civil Code applies only to waivers and transactions carried out by the worker, which differ from generic final receipts which do not have any settlement substance and are therefore not real declarations of a willingness to negotiate. The receipts are considered mere attestations underlying to affirm the satisfaction of certain rights and, therefore, do not prevent a subsequent request for judicial protection of further rights not yet satisfied.[1]

In order for a waiver or settlement to be conceivable, it is necessary that the employee, in making the declaration, has an exact representation of the rights, whether definite or determinable, of which he voluntarily intends to deprive himself in favour of the employer or on which he wishes to settle;[2] if, on the other hand, the subject matter is not delimited and the party is not aware of it, there is neither waiver nor settlement, regardless of the situation in which the declaration is made and signed. It reads:

"the settlement receipt signed by the employee, which contains a declaration of waiver of higher sums referring, in general terms, to a series of claims that can be hypothesised in the abstract in relation to the performance of the employment service and the conclusion of the relevant relationship, may assume the value of a waiver or settlement, which the employee has the burden of challenging within the time limit set forth in Article 2113 of the Civil Code, on the condition that it is established, on the basis of the interpretation of the document or the concurrence of other specific circumstances inferable aliunde, that it was issued with the knowledge of definite or objectively determinable rights and with the conscious intention of abdicating or settling them. "[3]

2. Employee, commercial agent and 2113 cc

As anticipated, art. 2113 cc refers to the "employee"given the express reference to relations provided for by art. 409 cpc

The art. 409 identifies disputes that must be decided according to the rite of work, also including self-employment relationships of a non-subordinate nature, including those of representation and agency, provided that the work performance is characterized by a continuous and coordinated work performance, mainly personal.

The question arises spontaneously whether only commercial agents acting as natural persons are subject to the rite of work, or also agents who, even if they operate in the form of joint-stock companies, have a structure such that in fact the personal element prevails. of the service (e.g. single-member companies, companies between individual agents, etc.).

According to the most recent jurisprudence of the Supreme Court, only agents who act as natural persons are considered to be subject to the rite of work, excluding all the hypotheses of agent constituted in corporate form, both of persons and capital, regular or irregular whether they are:

"A limited partnership, irrespective of the number of partners, constitutes in any event an autonomous centre of imputation of legal relations with respect to the partners themselves; therefore, when an agency contract is concluded between the principal and a limited partnership, the dispute over the termination of that contract falls outside the jurisdiction of the employment court, regardless of whether one of the partners has materially carried out the personal activity of an agent, since that activity is necessarily mediated by the company, losing the character of personality with respect to the principal"[4]

In the case of a waiver or transaction made by an agent who does not perform its services in a predominantly personal manner, it will not be subject to the guarantor discipline of Art. 2113 of the Civil Code, which will therefore be reserved solely for agents performing the activity as natural persons.

3. Mandatory rules.

The concept of mandatory rule is indirectly linked to the principle of contractual autonomy, sanctioned by art. 1322 of the Italian Civil Code, by virtue of which "the parties can freely determine the content of the contract within the limits imposed by law. " Therefore, those rules whose application is imposed by the legal system regardless of the will of the individual are said to be mandatory.[5]

In the context of labor law, the mandatory rule has the purpose of re-establishing that parity between contractors, typical of private relationships, which the diversity of social and economic situations could prevent in the context of the employment relationship.[6] "The mandatory rule therefore has the function not of a mere formal guarantee of personal freedom, but moves in the sense of making this freedom effective, and starts from the idea that man's existence does not depend only on his self-determination, but also on relationships economic and / or power in which he lives and which lead him to depend on variants on whose production he does not (generally) exercise any influence.[7]

Art. 2113 of the Civil Code operates precisely in this context, with specific regard to the validity of any transactions or waivers made by the employee on rights deriving from mandatory rules. Understanding therefore what is specifically meant by a mandatory rule is essential in order to be able to apply this regulatory provision also in the context of commercial agency.

The doctrine almost unanimously agrees in distinguishing a group of rights absolutely unavailable and guaranteed at the constitutional level (defined primary or strictly personal such as, for example, the right to health, weekly rest, holidays, social security, etc. ), whose dispositive acts would be totally void pursuant to art. 1418 cc and would remain outside the scope of application of the law and other rights, of a patrimonial nature (cd secondary), which, on the other hand, although they are laid down by mandatory rules, are in no way unenforceable: it is in relation to them that the rule at issue would operate with the consequent annulment of the enacting act.[8]

Only for such property rights - which would be fully dischargeable - does the special rule of Article 2113 of the Civil Code apply, which makes cancellable waiver and settlement agreements, provided they are timely challenged within the six-month time limit and concern rights that have already accrued. On the contrary, Art. 2113 of the Civil Code does not apply to rights that have not yet arisen or accrued, since in such a case the dispositive agreement would otherwise regulate the effects of the employment relationship in a manner different from that established by law and could lead to the nullity of the act.[9]

3.1. Commissions.

In this context, the majority jurisprudence is oriented towards the belief that any waivers or transactions relating to commissions accrued by the agent should not be considered binding. It is read:

"are valid - and therefore not subject to the appeal regime provided for in Art. 2113 of the Civil Code. - waivers and settlements concerning the amount of the agent's commissions, the determination of which is left to the free disposal of the parties."[10]

3.2. Indemnity pursuant to art. 1751 cc and AEC indemnity.

A different argument, on the other hand, concerns the agent's right to the severance pay indemnity pursuant to art. 1751 of the Italian Civil Code, given that the resulting text following the changes made in implementation of Directive 86/653 does not seem to leave many doubts in this regard; the penultimate paragraph of this provision reads: "the provisions of this article are mandatory to the disadvantage of the agent ".

Absolute legal certainty and clarity (and its consequent interpretative activity), ceases if we analyze this rule in relation to art. 19 of Dir. CE 653/1986, which establishes the mandatory right to indemnity only in the period preceding the end of the contract:

"The parties may not derogate, before the end of the contract, from Articles 17 and 18 to the detriment of the commercial agent. "

The problem arises that, by crossing art. 1751 cc penultimate paragraph, with art. 19 of the directive, the provision on indemnity could no longer be considered mandatory following the termination of the relationship, with the implicit consequence that the renunciation or settlement subsequent to the termination of the relationship would not have as its object a mandatory right and thus subject to the discipline of referred to in art. 2113 of the Italian Civil Code, which would remain applicable only to waivers and transactions that took place during the execution of the relationship.

To provide further clarity, the Court of Cassation, in a partially outdated judgement, noted however that the Italian legislator, in transposing the EU rule, omitted the phrase - before the expiration of the contract - simply stating that the provisions of the same article are mandatory to the disadvantage of the agent.

According to the Court, this means that although, according to the directive, the settlement agreements reached after the expiry of the contract relating to the extent of severance pay could be considered fully legal, now, in the system outlined by the new provisions of our civil code, the legislator wished to maintain the mandatory nature of art. 1751 cc even after the termination of the contract.[11]

It follows that, depending on whether the provision in question is considered, following the interruption of the contract, as derogable or mandatory, any waiver may be considered as open to challenge or not to be challenged.

However, one should not be distracted from the fact that the object of an appeal under Article 2113 of the Civil Code must remain common what Article 1751 of the Civil Code precludes, i.e., contractual provisions that are unfavourable to the agent: jurisprudence has in fact recognised that if such an agreement is possible to amend a contract that has already been concluded, a fortiori an exception must be considered permissible, "...".not in peius', as opposed to the legal regulation following the conclusion of the contract. [12]

Translating this principle into practice, if only Art. 1751 of the Civil Code applies to the contract, the agent will have to prove that the settlement agreement/waiver was detrimental to him by demonstrating that the conditions provided for in the code (i.e. having procured new customers to the principal or having significantly developed business with existing customers, as well as the benefits received by the principal), as well as the unfairness of the agreed payment, are met.

Less clear is the case where the parties have agreed on the applicability of the commercial AEC and have reached an agreement that in fact recognises exactly the indemnities provided for by such discipline; it must be acknowledged that the prevailing orientation of jurisprudence, even though it attributes to the collective discipline a value of a "guaranteed minimum", nevertheless recognises the agent, who proves that the conditions set forth in Article 1751 of the Civil Code exist, to ask the judge for an addition necessary to bring it to equity [13]. Following this orientation, even a settlement agreement that took place after the termination of the contract, where the parties recognised the agent's indemnities under the CSA, would be contestable to the extent that such indemnities are shown to be lower than those due to the agent under civil law provisions.

3.3. Post-contractual non-competition agreement and art. 2113 of the Italian Civil Code

Although no case law precedents have been found, another element that could be the subject of potential litigation is highlighted, concerning the relationship between Article 2113 of the Civil Code and Article 7 AEC Trade 2009, on the subject of post-contractual covenants not to compete. The provision states:

"In implementation of the provisions of Article 1751-bis of the Civil Code, the payment of a
non-commissionable indemnity, mandatorily in a single solution at the end of the relationship,
against the post-contractual non-competition agreement, when it is included in the individual
agency assignment

Since this is an expressly mandatory rule deriving from a collective economic agreement, it would seem to fall perfectly within the scope of Article 2113 of the Civil Code, with the consequence that an agreement providing for the payment in instalments of said indemnity could potentially be challenged by the agent.

Given the delicacy of the matter, it is therefore advisable to formalise any waivers or settlements relating to the severance indemnity, within the terms provided for by Article 410 of the Code of Civil Procedure, i.e. before the employment judge, or, alternatively, before the territorial labour directorate, since they become unappealable by law.

[1] Cassino Court, 1.7.2008, n. 997.

[2] Cass. Civ. 2006, n. 11536, Cass. Civ. 2004, n. 11627, Civ. 2003, n. 9636.

[3] Court of Appeal Catanzaro, 18.4.2017, no. 423

[4] Cass. Civ. 2022, 10184; in this sense too Cass. Civ. 2012, n. 2158. Contra Cass. Civ. 1997, no. 4928 ".A relationship of para-subordination, with the consequent jurisdiction of the employment tribunal, can also be established in the case of an activity provided in the context of a company management, by means of de facto companies or partnerships, even irregular ones, where it appears that the said activity is in fact provided in such a manner that there exists that state of socio-economic dependence which constitutes the essential element of para-subordination and of which the predominantly personal activity is the typical indicator.

The company profile may well be limited to a simple pact between the partners concerning the distribution of work and revenue, with symptomatic attenuation, therefore, of the element constituted by the joint exercise of an economic activity, provided for by Article 2247 of the Civil Code, as well as that, referred to in Article 2082 of the same code, of organisation for the purpose of the production or exchange of goods or services."

[5] Torrente - Schlesinger, Manual of private law, Giuffrè Editore.

[6] Cester - www.treccani.it.

[7] By Meo, The mandatory legal norm in Labor Law, Marche Polytechnic University.

[8] One Legal, Commented Civil Code, Wolters Kluwer.

[9] Cass. Civ. 2006, n. 2360, Cass. Civ. 2004, n. 2734.

[7] Torrente - Schlesinger, Manual of private law, Giuffrè Editore.

[8] Cester - www.treccani.it.

[9] By Meo, The mandatory legal norm in Labor Law, Marche Polytechnic University.

[10] Trieste Court, 2.1.2001.

[11] Cass. Civ. 2004, n. 7855; in this sense Venezia, The agency contract, 2020, Giuffé; Saracini-Toffoletto, The agency contract, Giuffré.

[12] Cass. Civ. 2000, n. 11402.

[13] Trieste Court, 2.1.2001, Cass. Civ. 1988, n. 6.

The essential elements of the agency contract.

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

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

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

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

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

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

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

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

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

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

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

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

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

1. The area

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

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

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

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

- Read also: Area exclusivity in the agency contract.

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

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

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

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

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

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

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

- Read also: The agency contract and the employment relationship: distinguishing criteria and evaluation parameters.

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

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

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

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

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

3. Continuity of activity

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

- Read also: What is the difference between an agency contract and a business intermediary?

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

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

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

What happens in such cases?

3.1. Agency contract and ancillary activity

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

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

- Read also: Agent and/or Area Manager? A brief overview.

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

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

3.2. Ancillary agency activities to the main contract

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

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

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

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

4. Sale of goods

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[17] Cass. Civ. 2382, 1987.

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

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

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

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

Commercial agent: responsible or owner of the data processing?

Lawyer Riccardo Berti

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

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

1. Owner, manager or appointee?

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

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

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

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

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

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

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

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

2. The measure of 9.7.2020 against Wind Tre.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  • the agent finds and manages lists of customers on its own account, provides them with information privacy as principal and then chooses to which of its principals it will propose the conclusion of the deal (at which point the 'selected' principal will provide the prospective client with its disclosure privacy together with the contract). In this case the agent will be autonomous data controller.
  • the agent finds, on behalf of the principal, customers and/or works on contact lists submitted to him by the principal. In this case the agent will external controller and the principal will be the owner. The agent will not have to provide his own information, but will merely provide the client with the forms privacy prepared by the principal, except in special situations (e.g. the agent wants to manage the principal's customer data independently, where the agency mandate so permits, in order to send informative communications to customers, etc., in which case he will have to submit a second information notice to the customers, collecting consent for this processing himself). Data processing takes place under the umbrella of the principal's organisation, of which the agent is an external appendage.
  • the agent not only acts on behalf of the principal, but also operates exclusively with the principal's tools, in offices made available by the principal, on the principal's computers and following the principal's instructions. In this case, for the purposes of privacythe agent becomes a subject who operates under the authority of the principal (formerly 29 GDPR), as there is no longer any reason to speak of an external controller because the agent is completely internalised in the controller's structure and cannot be distinguished, at least with regard to data processing, from any employee.

- Read also: The agency contract and the employment relationship: distinguishing criteria and evaluation parameters.

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

4. Differences in EU

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

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

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

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

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

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

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

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

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

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

- Read also: The natural person agent, parasubordinate work and the employment rite.

5. The agent's privacy adjustment

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

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

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

Three things are particularly important in the nomination:

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

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

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

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

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

6. B2C and B2B

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

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

7. The

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

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

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

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

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

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

8. Appointments, authorisations, etc.

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

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

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

9. Adaptation as a work in progress

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

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

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

Lawyer Riccardo Berti

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

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

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

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

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

[5] Case 7 U 4012/17 of 31.07.2019   

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

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

[8] Auslegungshilfe | Bayerisches Landesamt für Datenschutzaufsicht.

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

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

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

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

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

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

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

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

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

1. Employee or agent?

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

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

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

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

In particular, it is stated by the Court that:

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

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

- Read also: The agency contract and the employment relationship: distinguishing criteria and evaluation parameters.

2. Agent or self-employed?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

Derogabilità in peius AEC

Agency agreement and waiver in peius of the AEC.

Although the commercial agent falls within the category of self-employed workers, the majority jurisprudence does not consider it necessary to exclude the applicability to that relationship of the rules set forth in Article 2077 of the Civil Code, which establishes the non-derogation in pejus of collective agreements by the parties.

Therefore, in the event of the application of the AEC to the contract, any conflict between the collective discipline and that resulting from the individual contract, the individual discipline will prevail only if it is more unfavourable to the agent.

There are, however, differing legal and doctrinal orientations, which favour the validity of an individual agreement that is worse than the common law collective discipline.

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

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

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

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

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

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

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

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

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

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

On the basis of this assumption, i.e. the character of the staff member endowed with organisational autonomy and not subject to binding disciplinary authority, the - albeit long-standing - case law of the Court has held that the partial subjection of the staff member to the rules dictated for employment relationships

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

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

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

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

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

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

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

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

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

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

[5] Court of Appeal Venice, 25.1.2011.


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

contratto di agenzia e vendite online

Agency agreement and online sales: exclusive, non-competition and indirect commissions.

If a manufacturer chooses to sell online via its own e-commerce, it will certainly have to reckon with the reactions of its agents, likewise if the manufacturer sells to wholesalers or distributors who decide to put the purchased products online. Not to mention if this strategy is implemented by some agent who decides to start promoting sales with the help of the web.

This article will analyse what legal impacts online sales have on the 'traditional' sales network, examined from three points of view, that of the manufacturer, the third party and the agent.

1. Online sales by the manufacturer and impacts on sales agents.

Before analysing what are the legal repercussions in the event of a decision to put contractual products online, the following question should be answered: can the manufacturer sell in the areas where its agents operate?

To answer this question, one has to take a few steps back and understand how the principal may actually operate within the area granted to the exclusive agent.

- Read also: Area exclusivity in the agency contract.

Exclusivity is governed by Art. 1743 of the Civil Code, which prohibits the principal, unless otherwise agreed, from using the services of other agents within the territory. According to settled case law, this clause, which constitutes a natural element of the contract, ((Civil Cass. 2012 n. 16432; Civil Cass. 2002 n. 5920; Civil Cass. 1994 n. 2634; Civil Cass. 1992 n. 5083.)) does not only bind the principal not to appoint more than one agent within the same territory, but is also intended to protect the agent from any interference by the principal within the area, including the conclusion of business within the territory itself.((Cass. Civ. 2004 No. 14667.))

On the other hand, the regulation also provides that the agent is entitled to commissions even on business concluded by the principal directly with customers '.belonging to the reserved area or category or group of customers"(Art. 1748(2) of the Civil Code); this provision would seem to confer on the principal a 'free mandate' to sell directly within the territory, on the sole condition that he pays the agent the so-called indirect commissions.

Italian jurisprudence has arrived at a compromise that takes into account the opposing interests of the parties, as governed by the above-mentioned rules, holding that the freedom of the principal must be limited to the exercise of occasional sales within the territory, as it must be excluded that the principal may carry out systematic and organised sales there sales activities. ((One reads, for example, in a recent Supreme Court ruling that: "in matters of agency relationships, the principal may not operate, on a continuous basis, in the agent's area of competence but, pursuant to Article 1748(2) of the Civil Code, is only entitled to conclude, directly, individual deals, even if of significant size, the performance of which gives rise to the agent's right to receive so-called indirect commissions. It follows that, where the proponent's intervention is merely isolated, the right to payment of the commission is, in turn, episodic and not periodic in nature, and, as such, is subject to the ordinary limitation period under Art. 2946 of the Civil Code and not to the 'short' limitation period under Art. 2948(4) of the Civil Code. (Cass. Civ. 2008, no. 15069); see also Cass. Civ. 2009 no. 8948, Cass. Civ. 1993 no. 5591; on this subject cf. Bortolotti, Distribution Contracts, 2016, Walters Kluver.))

Following this orientation, if the contract does not expressly recognise the principal's right to make direct sales (even in a structured manner) within the exclusive territory, the principal who decides to set up a sales strategy through channels online subject itself to the risk of being challenged by its agents, for breach of exclusivity, especially if the trade via web generates a substantial amount of sales.((See Cass. Civ. 2009 no. 8948 where it was "ruled out the existence of just cause for the agent's termination without notice from the agency relationship on the sole basis of the principal's failure to pay the small commissions on only nine contracts concluded directly and of a marginal total amount."))

Very interesting is the cue promoted by a part of the doctrine, ((Baldi - Venezia, Giuffrè Editore, pg. 73 et seq.)) (which probably considers the orientation of the jurisprudence referred to above as too aleatory and not in line with the literary normative dictate of Art. 1748, para. 2 of the Civil Code) on the basis of which the principal should only be prohibited from carrying out an actual promotional activity, instead deeming lawful the answering of questions from customers who spontaneously address the principal, thus extending also to this hypothesis the distinction between active and passive sales of antitrust law.

2. Online sales within the exclusive agent's territory through third-party distributors.

A somewhat different problem is to understand when sales by third parties within the agent's territory may constitute a breach of exclusivity.

As analysed above, unless otherwise agreed, the exclusive agent is entitled to formerly Art. 1748(2) of the Civil Code to commissions also on all sales that the principal makes within its territory; it is therefore common ground that if the principal makes sales to a wholesaler based in the contract territory, the agent may claim the right to payment of indirect commissions. In order to understand whether the customer (legal entity) may be considered to be within the territory, it is appropriate to refer to a fairly old judgment of the Court of Justice, ((Judgment Kotogeorgas v Kartonpak of 12.12.1996, Case C-104/95.)) more recently confirmed by the Court of Cassation,((Cass. Civ. 2012 no. 5670.)) which clarified that any legal entity having its head office in the territory in which the agent enjoys exclusivity belongs to the zone.

It is less clear and obvious whether this third party, once it has purchased products from the principal, makes sales online directly to customers in the agent's reserved area, the agent may claim the right to commission from the principal.

Also responding to this question was a more recent ruling of the European Court of Justice:

"Article 7(2), first indent, of the Council Directive 86/653/EEC of 18 December 1986on the coordination of the laws of the Member States relating to self-employed commercial agents, must be interpreted as meaning that a commercial agent entrusted with a specific geographical area is not entitled to commission for transactions concluded by clients in that area with a third party without the direct or indirect intervention of the principal."It follows that there will only be a breach of exclusivity and the agent will only be entitled to an indirect commission if there has been direct or indirect intervention by the principal in sales made in the territory by third parties, ((Cass. civ. 2017 No. 2288.)) with the aim of de facto depriving the agent of business that the latter could have concluded.((See the principle established by the Court of Cassation sez. Lav. in judgment 2011 no. 11197.))

3. Online sales by commercial agents.

In contrast to distribution contracts, in agency contracts the principal may prevent the agent from carrying out online sales promotion activities (unless the agent, due to the manner in which he or she carries out his or her activities, is to be regarded as subject to antitrust law).

- Read also: Can a manufacturer prevent its distributors from selling online?

The question then arises, is the agent free to decide to start promoting online sales?

In fact, should an agent decide to do so, he or she will run afoul of what is the typical prerogative of the webi.e. that it is by its very nature visible everywhere and that any limitation aimed at preventing unjustified geographical blocks would even be contrary to European law.

- Read also:  Geoblocking: what is it and when does it apply?

On the other hand, as already explained at the beginning of this article, the agency relationship provides as a natural element of the contract the obligation of exclusivity to which the parties are bound and which any breach entails contractual offences. In particular, if the agent makes out-of-area sales, it will be in breach of the exclusivity covenant vis-à-vis the principal, since in such a case it will not be able to claim any commission being reserved exclusively for the agent of the area where it made the sale.

If, on the other hand, the contract provides for such out-of-area sales, the exclusive agent where the sale was made may bring an action against the principal for breach of the agreements between them.

Placing these principles in the online market, the question that arises is whether the mere existence of a website where sales of contractual products are offered (which by its nature is also visible outside the agent's assigned area) should be considered as a sales promotion activity that infringes the exclusivity of other agents.

To date, there appear to be no case law precedents that have answered this question, and in order to find a (at least plausible) solution, it is necessary to go back over the general principles on the subject of agency, recalling the principles dictated by antitrust law, taking into account the peculiarities of the market online.

Based on the Orientations of the Commission, the mere existence of an Internet site must in principle be regarded as a form of passive selling. Indeed, it reads:

"If a customer visits the Internet site of a distributor and contacts him, and if that contact results in a sale, including actual delivery, this is considered a passive sale. The same applies if a customer decides to be informed (automatically) by the distributor and this results in a sale."((LGC No. 52.))

Otherwise, it must be considered an active sale:

"Online advertising specifically targeted at certain customers [...]. Banners showing a territorial link on third party websites [...] and, in general, efforts made to be found specifically in a certain territory or by a certain group of customers".((LGC No. 52.))

It would therefore be consistent with antitrust law and European competition law to hold that the agent's breach of exclusivity only arises in the case of 'active' sales promotion activities, since otherwise it would have to be held that the mere answering of questions from customers outside the area, who spontaneously approach the agent, would only result in the agent's commission not being recognised.

In view of what would in any case be the impact on the sales network of the establishment of an online distribution system, it is advisable to consider very carefully regulating contractual relations in a manner consistent and aligned with the actual distribution strategies to be implemented.

Provvigioni su affari conclusi dopo lo scioglimento

Agent's right to commissions on business concluded after termination of the relationship.

When the agency relationship comes to an end, it is often the case that the agent has reported some business, or has simply started negotiations that resulted in an agreement following the termination of the contract.

In some (rarer) cases, the agent has concluded long-term contracts before the termination of the relationship.

Understanding whether or not the agent is entitled to commissions on business concluded after termination is of essential importance

In order to understand whether the agent is entitled to commission on business concluded after the termination of the contract, it is first necessary to identify which of these business transactions fall under the terminated relationship and which are to be regarded as excluded, since it is from this that the actual accrual or non-accrual of commission is determined.

In this article we will first briefly analyse the more typical case, relating precisely to business concluded after the termination of the relationship, and then delve into the rarer (but no less important) case of long-term contracts, which were concluded before the termination of the agency relationship.

1. Commissions on contracts concluded after the termination of the contract.
1.1. Civil law regulations.

Following the termination of an agency relationship, it is often the case that the agent has reported certain business to the principal, or has initiated certain negotiations that resulted in an agreement following the termination of the contract. In such cases, it is necessary to understand which of these deals fall under the terminated relationship and which are to be regarded as excluded, since the actual accrual or non-accrual of commission is determined by this.

This issue is governed by para. 3 of Civil Code 1748, which provides that the agent is entitled to commission on business concluded after the date of termination of the contract if:

  • "the proposal was received by the principal or agent prior to or
  • the business is concluded within a reasonable time from the date of termination of the contract and the conclusion is predominantly attributable to the activity performed by the agent, unless specific circumstances show an equitable distribution of the commission among the agents involved."

This approach[1] is intended to prevent the principal from running the risk of paying a double commission: one to the outgoing and one to the incoming agent.[2] In the event of termination of the relationship, therefore, the agent will be entitled to the commission:

  • whether it forwarded the order to the principal prior to the termination of the contract, or whether the principal received it directly from the local customer (in the event that the agent is entitled to indirect commission);
  • In other cases, the commission is only due if the deal has been concluded within a reasonable term from the date of termination of the contract and the conclusion is mainly attributable to to the activity carried out by the agent himself.

The second hypothesis, i.e. the one that recognises the agent's commission even if the proposal is received after the termination of the relationship, as long as it is concluded within a reasonable time, certainly requires more attention.

One of the major problems of interpretation is to identify what is to be understood by 'reasonable time'i.e. what is the maximum time limit for the agent to still be entitled to commission. On this point case law is not uniform, one reads of cases that have set this term at six months[3] and others who considered an even two-year time limit reasonable.[4] However, it must be held that the reasonableness of the time limit must also be judged on the basis of the industry sector in which the agent has operated and the customs in force in that relationship.

1.2 The AEC Framework.

Certainly clearer is the discipline of AEC Industry 2014which in Art. 6, last paragraph, provide that the agent is entitled to commission on the business proposed and concluded even after the termination of the contract, not only if the conclusion of the business is the effect of its activity, but also make it subject to the fact that

  • Upon termination of the relationship, the agent must report to the principal in detail on the commercial negotiations undertaken, but not concluded, due to the termination of the agency contract;
  • if, within a period of six months from the date of termination of the relationship, any such negotiations are successful, the agent shall be entitled to the relevant commissions;
  • Once that period has elapsed, the conclusion of any order, whether or not included in the agent's report, shall no longer be considered a consequence of the agent's activity and no commission shall therefore be paid;
  • no commission shall be due for business concluded even within six months, but not indicated in the report.

2. The right to commissions on long-term contracts.

Where the agent in the course of the relationship promotes term contracts, the entitlement to commission on deliveries made in performance of the contract procured after the termination of the relationship depends essentially on the nature of the term contract.

In principle, in the event that the term contract is a a supply contract, a subcontracting contract, or a sales contract with divided deliveriesit may be stated that (unless otherwise agreed),[5] the agent is entitled to commission on all deliveries made even after termination of the agency contract, since these are in fact acts of performance of a contract concluded in the course of the relationship.

Conversely, where the contract promoted is a framework contractwhere each supply is to be the subject of a further agreement (order - acceptance), in which case the individual supplies are to be regarded as independent sales contracts,[6] even if concluded in the context of the framework contract, with the consequence that such subsequent sales contracts will not give rise to an entitlement to commission (unless the agent can prove that such business is attributable to its promotion activity and was concluded within a reasonable time).

Continuing with the reasoning, if, on the other hand, the term relationship is signed by the principal following the termination of the relationshipIn order to understand whether the agent may be entitled to commission, it will not be sufficient to ascertain the nature of the relationship of duration, but also to prove that the conclusion of the transaction is attributable to the agent's promotional activity.

A very interesting case is recalled below,[7] which was decided by a series of three judgments of the Court of GrossetoA case in point was the following: an agent, following burdensome negotiations lasting several months, had procured for the principal (a company operating in the frozen food sector) a deal with a chain of supermarkets for the indefinite supply of frozen and pre-packaged ready meals. The administration contract was concluded a few months after the termination of the agency relationship.

The agent sued the principal for payment of commissions on supplies made in performance of the supply contract. By judgment No. 52/2012, the Court of Grosseto upheld the agent's claims, holding that:

"the administration contract was formally concluded [...]. just over two months after the termination of the agency contract [...], a term that must be considered, due to its objective brevity, absolutely reasonable.

Although the Court had found that the agent was entitled to commissions, it rejected the plaintiff's claim seeking an order that the principal pay them

"until the end of the administration contract [...] as this would be a pronouncement of sentence 'in the future' related, moreover, to a term that was not identified by the parties in the administration contract, since the same contract was concluded for an indefinite period."

The agent, a few years after the delivery of the first judgement, brought a further action, in which it sought an order that the principal be ordered to pay commissions on supplies made after the expert valuation referred to in the first judgement. The agent based its claim on the principle of Article 2909 of the Civil Code.according to which the finding contained in the final judgment shall be conclusive for all purposes between the parties. The Court again condemned the principal, stating that

"the right to obtain the payment of the commissions that will gradually accrue in relation to the prolonged performance of the supply contract, is unquestionable and has already been ascertained in the irrevocable ruling issued by this Office with the consequent application of the revocatory effect provided for by Article 2909 (on this point, among others, Court of Cass. Sez. Lav. 2001 no. 4304).

Following this ruling, in order to avoid the payment of commissions on future business, the principal proceeded to effectively giving up the business  to a company of the same group, also active in the frozen food sector. The agent then appealed again to the Court of Grosseto, arguing that the assignment of the duration contract pursuant to Article 1406 of the Civil Code entailed the transferee's obligation to pay commissions. The Court of Grosseto,[8] again supported the plaintiff's argument, stating that:

"since the characteristic feature of the assignment of the contract under Art. 1406 of the Civil Code is that it has as its object the transmission of a unitary set of active and passive legal situations resulting from each party to the contract [...], the transferee shall be obliged to pay to the plaintiff commissions - in the same amount as agreed in the agency contract - on the supplies of frozen food products made to X srl."

3. Commissions on long-term contracts and severance payments.

Lastly, it should also be emphasised that the signing of term contracts can be used as a determinant for prove that the conditions required by Article 1751 of the Civil Code are fulfilled.for the agent's right to receive severance pay (cf. Agent's severance pay. How is it calculated if AEC does not apply?). We read in an interesting Supreme Court ruling that:

"The termination indemnity compensates the agent for the asset increase that its activity brings to the principal by developing the goodwill of the business. It follows that this condition must be deemed to exist, and the indemnity is therefore due, where the contracts concluded by the agent are contracts of duration, since the development of goodwill and the continuation of benefits to the principal, even after the termination of the agency relationship, are in re ipsa'..[9]

[1] Article reformed by Legislative Decree No. 65/1999, by which the legislature transposed the principles of European Directive No. 86/653 and, in particular, Article 8, which provides as follows: "For a commercial transaction concluded after the termination of the agency contract, the commercial agent shall be entitled to commission; (a) if the transaction is mainly due to the result of the work performed by him during the agency contract and if the transaction is concluded within a reasonable period after the termination of the agency contract, or (b) if, in accordance with the conditions set out in Article 7, the order placed by the third party was received by the principal or the commercial agent before the termination of the agency contract. "

[2] Cf. Court of Rimini, 22.9.2004, No. 238, which excluded the agent's right to commissions in the event of extensions of supply offers, given the absence of the former agent's preponderant promotional intervention. On this point see VENEZIA, Il contratto di agenzia, pg. 281, 2015, CEDAM.

[3] Cass. Civ. 2006, no. 2824, in Leggi d'Italia

[4] Cass. Civ. 2013, no. 894, in Leggi d'Italia

[5] Art. 1748 para. 3 of the Civil Code, on commissions due for business concluded after termination of the contract, is entirely derogable: in favour Saracini-Toffoletto, Il contratto di agenzia. Commentario, 2014, GIUFFRÈ and Bortolotti, op. cit., p. 276; contrary, Trioni, who holds that this rule is not mandatory, given that the third paragraph of Art. 1748 cc, unlike the second and fourth, does not expressly provide for the salvation of contrary agreements.

[6] See on this point BORTOLOTTI, Concessione di Vendita, Franchising e altri contratti di distribuzione, p. 8, 2007, CEDAM.

[7] For more details see Giulia Cecconi, Le provigioni sui contratti di durata, in Agents and sales representatives, 1/2019, PUBLISHING AGE.

[8] Court of Grosseto, Judgment No. 269 of 2018.

[9] Cass. Civ. sez. lav. no. 24776 of 2013.

influencer e agente di commergio

The influencer (or youtuber) is a commercial agent: food for thought.

The influencer often carries out a sales promotion activity for a fee: does this make him a commercial agent?

In order to legally frame the figure of theinfluencerit is necessary to start with a brief analysis of their activity, trying to give it a, albeit generic, definition. L'influencer, as the word itself implies, is a person who is able to influence the opinions and attitudes of other people, because of his or her reputation and authority on certain issues or areas of interest.[1]

In particular, the marketing influencer is an industry expert (which can range from fashion, to travel, music, technology, etc.) that, with its posts, allows it to offer greater visibility to products or services it promotes, using the web channels it considers most appropriate and adequate (Instagram, Youtube, Facebook, a personal blog, etc.).

L'influencer Precisely because of the decisive role it plays within the communication processes, it is often commissioned by companies in the sector in which it operates to advertise their products, thus carrying out a sales promotion activity, which is remunerated through the payment of a fee.

Precisely because theinfluencer often carries out a sales promotion activity for a fee, typical of the better-known figure of the commercial agent, the question may arise as to whether theinfluencer (in certain hypotheses), may be accumulated to such a contractual figure (see on this point But are online platforms commercial agents?)

Before proceeding to this analysis, it is important to clarify that, with this article, we want to give some food for thought, mainly aimed at trying to better frame the new modes of intermediation, with the intention of 'monitoring' the development of distribution techniques, with the help of new technologies.

If the contractual relationship between the company and influencer is governed by a written agreement, the point of reference for the interpreter's activity must certainly be the text of the negotiated declaration in the first place.

In any case, although the negotiated text is the first parameter of interpretation, for a correct exegesis one must not limit oneself "to the literal text of the words" (Art. 1362 of the Civil Code), but it is necessary to seek, through an overall examination of the deed, by interpreting the clauses of the "one through the other" (Art. 1363 of the Civil Code), what was the result pursued by the conclusion of the agreement, i.e. what was "the common intention of the parties", i.e. the meaning they both attributed to the agreement[2].

In order to trace the will of the parties, it will be necessary to take into account how the relationship actually developed.influencer to the producing company by analysing some of the typical contractual elements of the agency, namely whether:

  1. there is or is not a consultancy activity in addition to sales promotion;
  2. there is an obligation of stability of tenure;
  3. the company has the power to dictate the market guidelines and strategies of theinfluencer;
  4. there is a contractual non-compete clause;
  5. there is a commission payment, based on sales made.

Since there is no single, 'decisive' element to understand whether a given relationship qualifies as an agency, it must be considering the different typical elements in the individual case of this contractual figure, bearing in mind that none of them alone allows the relationship to be correctly framed, but rather an overall assessment of all of them must be carried out.[3]

1. There is a consultancy activity alongside the promotion activity?

Sometimes the contractual relationships that bind the influencer to companies are governed by consultancy contracts, remunerated through the payment of a fixed fee, sometimes coupled with a variable fee, calibrated on the sales generated by the promotional activity of theinfluencer.

There is no doubt that often theinfluencer performs a genuine consulting activity, being a professional who knows the market of social and the company contacts him, not only for his notoriety, but also to understand how to advertise products through the use of digital platforms.

It is also true that it is far from unusual for published posts and videos to be 'accompanied' by a linkwhich redirects the consumer to a particular shop online (which can be either the manufacturer's or a third party's), where it is possible to purchase the product advertised by theinfluencer.

Any purchase by the consumer through the use of this link is tracked, thus enabling the parties to verify the sales actually realised through the promotional activity of theinfluenceron which variable remuneration may be calculated.

In that case, one would be faced with a so-called ' contractmixed"consisting of the merger of the causes of action of two contracts: a contract of brokerage and a contract for consulting services. According to case law, in the event the parties enter into a contract of this nature mixedthe same shall be subject to the unitary discipline of the prevailing contract. It is stated on this point that:

"The mixed contract, consisting of elements of different types of contract, is not only unique, but has a single and inseparable cause, in which the elements of the different types that constitute it are combined. It is subject to the prevailing contract and predominance is determined on the basis of economic or other indices, such as the "strength" of the type or the interest that moved the parties, unless the elements of the non-prevailing contract, regulated by its own rules, are incompatible with those of the prevailing contract."[4]

In the light of the above, in order to understand which category to subject the brokerage/consultancy relationship to, it will be necessary to refer to how the relationship has actually developed over the years and to verify whether or not the consultancy activity takes precedence over the brokerage activity, noting that, if so, it would be more complex to consider the relationship as an agency contract (Main differences between the agency contract and the commercial distribution contract).

2. Absence of an obligation of stability of tenure

To understand whether the relationship between the company and influencer may be subject to the agency discipline, it is certainly essential to ascertain that the sales promotion activity (and not only the positioning of the brand) is carried out with stability. As has already been discussed (cf. What is the difference between an agency contract and a business intermediary?) is precisely the obligation to promote sales with stability one of the distinctive elements of the agency contract. It is stated in case law that:

"while the agent is the part that assumes permanently the mandate to promote on behalf of the other (principal or principal), the conclusion of contracts in a specific area, the business procurer is the person who collects orders from customers and transmits them to the company from which he has been commissioned, without stability constraint (unlike the agent) and on an entirely occasional basis [...].

Thus, while the agent's service is stable, as he is obliged to carry out the activity of promoting contracts, the procurer's service is occasional, in the sense that it depends exclusively on the his initiative.[5]"

If ascertaining the stability of the assignment is already a complex activity in the case of brokering "traditional'.is certainly even more so if the promotion activity is carried out online. Consider the (not uncommon) case of a influencer reviewing a product on youtube. The activity they perform is to create a video and post it on the platform.

The effects of such promotional activity, in any event, last over time, sometimes for months or even years (normally until the product reviewed is superseded by a new product launched by the parent company, or until the video is deleted from the web). In such a case, one would need to understand whether or not this promotion activity that unfolds its effects over time can be considered 'stable' within the meaning of an agency relationship.

While it is certainly not easy to give an unequivocal answer to this question, it is certainly without doubt advisable to contractually regulate the manner of payment of remuneration on sales conveyed by this post realised after the termination of the relationship between influencer and company.

(On this subject, cf. The commercial agent's commissions for business concluded by the principal after termination of the relationship; ...but if the commercial agent has procured long-term contracts and the relationship is dissolved before their expiry...).

3. Duty of the principal to impart market guidelines and strategies

A second distinguishing point of the figure of the commercial agent is certainly constituted by the obligation he assumes to follow the instructions of the principal, who is the party responsible for deciding market policies and imparting commercial strategies to the distribution network. Article 1746(1) of the Civil Code expressly provides that the agent must:

"perform the task entrusted to him in accordance with the instructions received [...]'.[6]

In the agency relationship, it is the responsibility of the principal to devise sales and marketing strategies. marketingstrategies to which agents normally belong and to which they must adhere in the performance of their duties, always within the limits prescribed by the principal.

It follows that the agent has a duty to follow the principal's instructions and is obliged to act in accordance with his instructions, also with regard to the objectives to be pursued and the results to be achieved, and may not refrain from adopting certain sales methods or techniques. marketing developed by the principal.[7]

Once again, as analysed in point 1 of this article, it will be necessary to check very carefully whether theinfluencer is obliged to follow the general directives of the company, or is he himself directing the company in its choices of strategy and marketing in the area of its competence (on this subject cf. The agency contract and the employment relationship: distinguishing criteria and evaluation parameters.).

4. Absence of non-competition

Article 1742 of the Civil Code provides that:

"The principal may not use more than one agent in the same area and for the same line of business at the same time, nor may the agent take over the business of several competing undertakings in the same area and for the same line of business."

According to settled case law, the non-competition clause is a natural but not essential element of the agency contract[8]with the consequence that the parties are free to regulate their relations differently either by an express agreement or by concluding behaviour[9] (on this subject see also Area exclusivity in the agency contract e Agency contract, exclusivity and indirect commissions.).

Although an agent is normally free to act by promoting several competing products, such an 'open' mode of promotion is certainly anomalous and is found in a more limited number of contractual relationships.

Applying this principle to the present case, it could be said that if a influencer carries out its activities in favour of several competing companies, without any of the intermediaries raising any objection as to the manner in which they operate, this element could be a clue which, although in itself cannot absolutely exclude the relationship from being classified as an agency, if combined with those already analysed above, could be a component that could influence its classification

5. Payment of commissions

Where the contract expressly provides as a method of calculating the consideration of theinfluencer the commission payment, this alone cannot be regarded as a sufficient element to be able to identify the relationship as an agency. The parties, in fact, whether they wish to conclude an agency contract or a consultancy/service contract, may freely (formerly Article 1322 of the Civil Code) define the remuneration terms that they deem to be the most appropriate and suitable in the case at hand.  

Suffice it to say that if the relationship were to be framed as an atypical contract for the provision of services, Article 1657 of the Civil Code on the subject of contracts gives the parties complete freedom to decide on the manner of payment and calculation of services, which may therefore also be of a commission nature.

That being said, it cannot however be denied that the payment of the activity by means of the acknowledgement of a commission is typical of the agency relationship and it must therefore not be excluded that this must be taken into account when interpreting the contractual relationship.

In the event, the relationship is only remunerated with a fee in fixed formAlthough the European directive does not exclude the reconciliation of this method of remuneration with the figure of the agent, Italian jurisprudence (criticised by part of the doctrine[10]) stated its opposition to this argument,[11] considering that in that case the intermediary would not assume any entrepreneurial risk, which is a distinguishing feature of the figure of the agent.

A different matter, however, if the relationship were to be remunerated through the payment of a mixed remunerationunder which a fixed component is combined with a variable component. Such a solution whereby the agent is assured a "guaranteed minimum"is considered lawful and compatible with the agency employment relationship.[12]

Those analysed above are only a few elements that allow the interpreter to understand how best to frame a "dubious" contractual relationship, which must however be carefully analysed in its entirety, verifying the individual elements that characterise such a complex and versatile contractual figure.

[1] https://www.glossariomarketing.it/significato/influencer/.

[2] TORRENTE - SCHLESINGER, Handbook of Private Law, § 311, GIUFFRE EDITORE.

[3] Bortolotti, Distribution Contracts, p. 129, 2016, Wolters Kluwer.

[4] See Trib. Cagliari, 4. 5.2017; Trib. Firenze Decreto, 2.11.2016, Trib. Taranto Sez. I, 11.8.2016, Trib. Milano Sez. VII, 29/02/2012; Cass. civ. United Sect., 12.5.2008, n. 11656.

[5] Tribunale di Firenze Sez. lavoro, 4.3.2014.

[6] This obligation is also found in Art. 5, para. 2, AEC Industry 2014 and Art. 3, para. 2, AEC Trade 2009.

[7] On this point see also Bortolotti, Distribution Contracts, Wolters Kluwer, 2016, p. 166 et seq.

[8] Cass. Civ. 2002 no. 5920, Cass. Civ. 1994 no. 2634, Cass. Civ. 1992 no. 5083.

[9] Cass. Civ. 2007 no. 21073, Cass. Civ. 1992 no. 5083.

[10] PERINA - BELLIGOLI, The Agency Relationship, p. 27, Giappichelli Editore; Saracini-Toffoletto, p. 327 ff.

[11] Cass. Civ. 1986 no. 3507; Cass. Civ. 1991 no. 10588; Cass. Civ. 2012 no. 12776. The latter judgment went so far as to admit that "in the agency relationship the parties may provide for a form of remuneration for the agent's services other than a commission determined as a percentage of the amount of business concluded (such as a fixed sum for each contract concluded), but without going so far as to acknowledge that remuneration in the form of a commission can be entirely replaced by a fixed remuneration.

[12] See on this point Cass. Civ. 1975 no. 1346; Cass. Civ. 1980 no. 34; Trib. Di Milano 9 September 2011.

coronavirus contratti di distribuzione contratti di agenzia

The effects of the coronavirus on agency and distribution contracts.

The restrictive measures the government has taken against the coronavirus through the DCPM of 11.3.2020,[1] have led to the suspension of a large number of commercial activities, with a serious impact on existing contractual relationships. This article will attempt to focus attention on agency and distribution contracts, trying to understand what remedies are provided by our legal system to deal with the problems that are most likely to arise between the parties.

In contractual matters, following the above-mentioned ministerial order, the legislator did not intervene with measures ad hoc (only a few measures of a predominantly tax and contribution-related nature are to be found in agency matters),[2] merely providing in Article 91 Decree-Law of 18 March 2020, better known as 'Cura-Italia', on the subject of "provisions on delays or breach of contract resulting from the implementation of containment measures", as follows:

"compliance with the containment measures set out in this decree shall always be assessed for the purpose of excluding, pursuant to and for the purposes of Articles 1218 and 1223 of the Civil Code, the debtor's liability, also with respect to the application of any forfeiture or penalty related to delayed or omitted performance. "

The sense of this regulatory provision would seem to delegate to the judge a more accurate and prudential assessment of a possible culpable breach (Art. 1218 of the Civil Code) caused by the "compliance with containment measures" of the pandemic, also for the purpose of quantifying damages (art. 1223 Civil Code), raising compliance with these measures to a parameter for assessing the imputability and importance of the breach (art. 1455 Civil Code).

1. Civil law regulations.

As is well known, Art. 1218 of the Civil Code establishes the criteria for determining the liability of a debtor who fails to perform its bondby providing for its exemption from liability for damages (Art. 1223 of the Civil Code) whenever the non-performance or delay was caused by impossibility of performance resulting from a cause not attributable to it (Art. 1256 of the Civil Code).[3]

Art. 1256 of the Civil Code also provides that supervening impossibility may lead to the extinction of the obligation, although a distinction must be made between the case of definitive impossibility e impossibility temporary. While the former, being irreversible, extinguishes the obligation automatically (Art. 1256(1) of the Civil Code), the latter determines the extinction of the obligation only if it lasts until such time as the obligor can no longer be required to perform the obligation, or the obligee no longer has an interest in performing it.[4]

Given that in the contracts for consideration the impossibility of performing an obligation does not always automatically imply the impossibility of performance (e.g. if the seller cannot deliver a product, the buyer may still be able to pay the price of the thing sold)[5] The legislature intended to protect the non-performing party by providing in Art. 1460 of the Civil Code that either party may refuse to perform its obligation if the other does not perform or does not offer to perform at the same time, unless otherwise agreed in the contract (i.e. the seller may refuse to make payment if the manufacturer does not deliver the goods).

However, this exception may only be raised if there is proportionality between the two benefits, taking into account their respective impact on the balance of the relationship.[6]

In order to prevent the contractual relationship from being transformed into a "limbo" in which both parties merely declare that they do not wish to perform their respective obligations, if the non-performance (in our case of the seller) depends on supervening external factors (e.g. If the non-performance (in our case, the seller's non-performance depends on supervening external factors (e.g. the suspension measures of the covenant-19) the legislature (taking over the general principles dictated on the subject of rescission of the contract for non-performance, as in Art. 1453 of the Civil Code), provides the parties with certain remedies for cases where the impossibility is total or only partial.

Art. 1463 of the Civil Code (total impossibility) provides that the party who has been released from its obligation due to the supervening impossibility of performance (e.g. the seller who because of covid-19 can no longer deliver fruit that has perished because it could not be harvested during the pandemic), may not claim the counter-performance (i.e. payment of the price) and must also return what it may have already received (e.g. an advance).

Art. 1464 of the Civil Code (partial impossibility), on the other hand, provides that when the performance of one party has become partially impossible (e.g. delivery of 50% of the goods sold), the other party is entitled to a corresponding reduction of the performance owed by it (payment of 50% of the goods delivered), or may dissolve the contract if it has no appreciable interest in partial performance.

Thus, while in the case of total impossibility the termination of the contractual relationship operates as a matter of right, in the case of partial impossibility the party suffering the non-performance may opt for partial performance or (if there is an appreciable interest) termination of the contractual relationship.

Still different is the case governed by Art. 1467 et seq. of the Civil Code, relating to relationships with continuous or periodic performance, or with deferred performance, where due to external factors the performance of one of the parties requires efforts that are excessive and disproportionatethan those that were enforceable once the relationship had been entered into. Even in such a case, the party who suffers the excessive onerousness of the performance may request the termination of the contractual relationship if a serious economic imbalance is created between performance and counter-performance.

In this case, the party against whom termination is sought may avoid it by offering (formerly Art. 1467(3) of the Civil Code) to modify the terms of the contract in an equitable manner so as to bring the relationship between the performances within the limits of thenormal alea of the contract.

It is therefore very important to emphasise that the does not provide for an obligation of the parties to renegotiate and reschedule the relationshipSuch an obligation cannot be inferred from an extensive application of the principle of good faith under Art. 1374 of the Civil Code, the subject matter of which is a different case. Nor, in the writer's opinion, can such an obligation be derived from an extensive application of the principle of good faith set forth in Art. 1374 of the Civil Code, which has as its object the different case of "integration of the contract" in cases of incomplete or ambiguous expression of the contracting parties' will (and not of modification of the contractual terms, in the event of variations in the equilibrium position of the contractual relationship due to facts not attributable to the parties).[7]

Bearing in mind that these are the instruments offered by the legal system, we go on below to try to respond to some of the problems that may arise in the context of commercial distribution, bearing in mind that the legislature's reference to the institutions set forth in Articles 1218 and 1223 of the Civil Code suggests that the legislator's concern was above all to keep contractual relations alivewhere possible and in the interest of the parties.[8]

2. Effects on distribution contracts
2.1. What happens if the manufacturer can no longer supply its distributors and/or customers because of the coronavirus?

As a general rule, if the manufacturer cannot supply its distributors due to a blockage and/or slowdown in production due to the implementation of government restrictive measures, it cannot be held liable for such delays if the impossibility was original (thus not known at the time the obligation arose) and occurred after the debtor's default (Art. 1219 of the Civil Code), the contract being in a state of 'quiescence'.

Whether it was foreseen (expressly or implicitly) for the delivery of the goods[9] a essential term (Art. 1457 of the Civil Code), the relationship will be terminated as of right once the term has expired.

If, on the other hand, the time of delivery of the goods is not essential, the contractual relationship is extinguished if the impossibility continues until the purchaser can no longer be considered obliged to perform, or if the purchaser's interest in obtaining performance ceases to exist.[10] The purchaser's right not to terminate the agreement and to demand only a reduction of the price, if the performance is/can be only partially performed (e.g. delivery of only a single batch of the purchased goods), shall remain unaffected.

2.2. Can the distribution agreement be terminated because of the pandemic?

The subject of the dissolution of the distribution relationship has already been dealt with in this blog, and reference is made to that article for further discussion.

The termination of the sales (or distribution, as the case may be) licence agreement.

As explained (briefly) in the introductory part of this article, the party who "suffers" the temporary non-performance may terminate the relationship if it has no interest in the partial continuation of performance. Therefore, given that due to covid-19 the distribution relationship is interrupted for a term that may be more or less prolonged, the interest in the continuation of the distribution contract must certainly be calibrated taking into account mainly two factors: the actual duration of the event (in this case the pandemic) and the remaining duration of the contract.

As a general rule, it may be said that the more prolonged the effects of the restraint and the closer the natural expiry date of the relationship, the greater will be the possibilities of terminating the obligatory relationship. Of course, in this assessment, one must also take into account the indirect effects of the restrictive measures, which are linked to a reasonable expectation of one of the parties of the perpetuation of a very important decline in trade even after the end of the blockade.

Furthermore, if one of the parties is contractually obliged to incur high costs for maintaining the distribution relationship (rent, employees, showroom, etc.) that make the collaboration no longer de facto sustainable, it may consider terminating the relationship for excessive onerousness pursuant to Art. 1467 of the Civil Code.

In this case, the party against whom termination is sought may avoid it by offering (Art. 1467(3) of the Civil Code) to modify the terms of the contract in an equitable manner so as to bring the relationship between the performances within the limits of thenormal alea of the contract.

2.3. Can the parties not respect the non-competition agreement?

The covenant of competition in distribution (and agency) relations may be agreed in two ways, namely:

  • the manufacturer undertakes to supply only the distributor in a given territory;
  • the distributor undertakes to purchase certain products only from the manufacturer.

If, because of covid-19, the manufacturer can no longer supply its distributor because it has been placed under a production freeze, i.e. the distributor can no longer perform because of the freeze, even though the manufacturer has the possibility of supplying it (e.g. because it had in stock the material), the question arises as to whether the party that no longer has an interest in maintaining the non-compete obligation due to a fact attributable to the other contracting party may decide not to perform its obligations by using the legal means referred to above.

On the assumption that the law does not provide for any obligation of the parties to renegotiate the original contractual arrangement,[11] the existence of a principle authorising one party to oblige the other to modify the contract in the interests of rebalancing cannot be inferred.

It follows that a temporary suspension of the non-compete clause (in the writer's opinion) is not legally foundedif this does not result from an agreement of both parties. Conversely, if the prohibition of 'competing' activities for the period in question creates unsustainable conditions, one may possibly consider terminating the contractual relationship on the ground of supervening impossibility or excessive onerousness.

2.4. Should advertising budgets be provided and spent as agreed even if distribution is not possible due to the pandemic?

If one of the parties is contractually obliged to incur fixed costs for marketing and advertising, might find itself in the position of deciding not to incur such expenses, believing that they are not necessary due to the halt in production.

In order to understand whether (and which) marketing activities can be blocked, it is necessary to analyse the nature of the individual advertising/marketing activities. It can tend to be said that all those 'general' activities that serve to maintain the brand positioning within the market, must be carried out even in the event of a distribution blockade, as they are in fact necessary prior to reopening.

A different reasoning should be made on the activities of marketing relating to sales actions that cannot be performed during the pandemic. In such a case, the problem is not so much that those performances cannot be performed (and thus permit the invocation of supervening impossibility), but rather the fact that they do not bring any commercial advantage to the party promoting them; moreover, very often those expenses will not burden the party obliged to bear them so much economically that they can sustain the breach of the contractual equilibrium and thus permit the invocation of the supervening excessive onerousness of the performance.

In such a case, if the parties fail to reach an agreement, the party obliged to perform the promotional activity may have as its only (rather blunt) weapon the decision not to perform and thus not to carry out such activities, relying essentially on the fact that the non-performance may be deemed by the court (having regard also to Art. 91 of the above-mentioned Decree) to be of minor importance (Art. 1455 of the Civil Code), taking into account that the performance would not have brought any commercial advantage to the parties in any event.

3. Effects on agency contracts
3.1. Does the principal still have to pay a fixed commission/expense reimbursement, if contractually agreed?

Especially in agency contracts, it is often stipulated that the entrepreneur pays a monthly fixed amount (as reimbursement of expenses, or as a fixed commission) to which a variable part is normally added.

In this period, since the promotion activity has in fact been largely blocked, one wonders whether the principal might decide to remove (at least this phase) this fixed part.

As noted above, although the law does not provide for an instrument entitling a party to unilaterally modify the contract, it is not at all atypical to find in agency contracts contractual clauses conferring on the principal the potestative right to unilaterally modify the agent's commissions, territory and/or customers.

Cf. Unilateral changes to the agency contract by the principal.

According to the prevailing view of the Court, the granting of this power to the principal must "be justified by the need to better adapt the relationship to the needs of the parties as they have changed over time".[12] It may therefore be held that the adjustment of the commission fee on account of covid-19 can only be legitimately implemented if there is a contractual clause providing for such an option on the part of the principal, who will in any event be obliged to avail himself of it in a reasonable and appropriate manner.

It is a different matter, however, if AECs apply to the agency agreement, which confer on the one hand the possibility of the principal to modify the agent's commissions, but on the other hand the right of the agent to reject the modifications and terminate the relationship for cause if those modifications are significant (on this topic see commission changes based on AECs). It is argued that this rule cannot be altered in favour of the principal even taking into account the impact of the covid-19 on the principal's sales network, who must be aware that any change in the commission may lead to a termination of the relationship for cause by its agent.

3.2. What should agents do if they cannot visit their customers?

It is clear that if the agent can no longer visit his customers, he will not be forced to do so; moreover, if before the pandemic he did not carry out any promotion activities online and was not contractually obliged to do so, the principal will certainly not be able to impose disproportionate efforts on his agent by requiring the latter to engage in 'telematic' promotion by using new computer tools.

3.3. What are the consequences of not reaching the turnover minimums due to covid-19?

In recent years, the jurisprudential orientation is becoming more and more established[13] which, while confirming the unquestionable applicability of the general rule under Article 1456 of the Civil Code on the subject of express termination clauses, nevertheless specified that in order to legitimately activate the relevant termination mechanism, the court must in any event ascertain the existence of a serious breach, constituting just cause.[14]

Cf. The 'minimum turnover' clause in the agency contract.

Following this orientation, the failure to reach the minimum turnover due to covid-19, cannot be considered in itself as a breach such as to legitimise a termination of the relationship due to an act attributable to the agent, with the judge having to assess on a case-by-case basis the actual imputability and culpability of such non-compliance.

3.4. Does the commercial agent retain the right to commission if the customer terminates the contract with the principal because of the coronavirus?

If the customer terminates the contract with the principal because of the coronavirus (e.g. because his shop had to close or his carriers stopped), the question arises whether the commercial agent loses the right to commission under Art. 1748 of the Civil Code.

The current Art. 1748(6) of the Civil Code provides that the agent is obliged to return the commissions collected in the sole event that the contract between the principal and the third party has not been performed for reasons not attributable to the principal (a rule that is, inter alia, mandatory for the parties).

The notion of a cause attributable to the principal has been understood as any intentional or negligent conduct of the principal that resulted in the non-performance of the contract.[15]

Since the customer's breach of contract due to impossibility and/or supervening excessive onerousness of performance (due to the coronavirus) is not a fact attributable to the principal, the agent will not be entitled to receive the commission on such business and will be obliged to return it to the principal if it has already been paid in full or in part.

3.5. The repercussions on severance and termination payments.

As is well known, the parties have the right to terminate the relationship by giving the other party notice. The agent upon termination of the contract is entitled to a severance payment, unless:

  • the principal terminates the contract for an act attributable to the agent;
  • the agent terminates the contract for an act attributable to the agent.

Taking the above into account, it can be reasonably argued that the arguments made in the previous paragraph "Can the distribution agreement be terminated due to the effects of the Corona pandemic?"may, in principle, also be valid for the agency contract, although one should be aware that it is nevertheless necessary to act with the utmost care and awareness before terminating the contractual relationship, assessing prudently on a case-by-case basis.

One thing, however, is certain, that this pandemic will have a significant effect on the calculations of severance pay and loss of notice for all terminations of contracts that occur close to the arrival of the pandemic.

If those indemnities were to be excessively distorted due to the economic framework connected with covid-19, the question arises whether the agent may supplement them by availing itself of the right guaranteed by Art. 1751(4) of the Civil Code, which grants the agent the right to claim damages in addition to those indemnities.

The prevailing view holds that the damages that the agent may claim in addition to the indemnity are only those from default or tort.[16] It follows that it will be very difficult for the agent to claim further sums beyond those paid to it by way of termination indemnities, given that the decrease in turnover (which led to the decrease in indemnities) is unlikely to be attributable to fault on the part of the principal.

[1] Urgent measures to contain the infection throughout the country.

[2] Limatola, News on agency contracts in April 2020.

[3] Trabucchi, Institutions of Civil Law, § 310, CEDAM.

[4] Torrente - Schlesinger, Handbook of Private Law, §210, Giuffrè Editore.

[5] In that case the debtor's financial difficulties will not be relevant in any event, on this point see Gazzoni, Manuale di diritto privato, Edizioni Scientifiche Italiane.

[6] Cass. Civ. 2016, no. 22626.

[7] On this point, see Vertucci, Non-performance of obligations in the time of the coronavirus: first reflections, ilcaso.it

[8] Vertucci, op. cit.

[9] See Cass. Civ. Cass. of 2013, no. 3710: essentiality is a characteristic that must result either from the express will of the parties or from the nature of the contract.

[10] See on this point Studio Chiomenti, Impact of Covid-19 on contracts.

[11] See on this point Vertucci, op. cit.

[12] Cf. Cass. Civ. 2000, no. 5467.

[13] Cass. Civ. 2011, no. 10934, Cass. Civ. 2012, no. 8295.

[14] Venice, Il recesso, la giusta causa e la clausola risolutiva espressa nel contratto di agenzia, March 2020, La consulenza del lavoro, Eutekne.

[15] Toffoletto, The Agency Contract, Giuffrè.

[16] Bortolotti, Termination Indemnity and Compensation for Further Damage, www.mglobale.it

Piattaforme online agenti di commercio

But are online platforms commercial agents?

In theprevious article tried to go
outlining the legal nature of platforms online, retracing
the reasoning path taken by the Court of Justice in the recent
Uber sentences Spain[1], Uber France[2] and Airbnb Ireland[3].

From the study of this
decisions it is impossible to classify platforms online
all within the same legal category, each time having to
evaluate each individual reality, based on the services it offers: the Court
recognised that the Uberpop service, provided by the platform of the same name, should
be qualified as a transport service, while it excluded that the
intermediary service provided by Airbnb could be framed as a
real estate agency relationship, but rather as a 'service
of information societies

The Court arrived at these
conclusions by analysing in great detail the services of
intermediation that the two platforms concretely provide, starting from the
assumption that, in order to delineate the legal nature of such entities, it is
it is necessary to identify the''main element" that characterises them
through a detailed study of the services provided. In the Uber ruling
reads in fact that:

"the brokering service under discussion [must] be considered as an integral part of an overall service of which the main element was a transport service, and therefore did not qualify as an 'information society service'.[5]

It follows that,
regardless of the qualification given to the relationship by the parties, is
necessary to go from time to time to verify what is the actual
characterising factor of collaboration.

It can reasonably be said that the maxim enunciated by the Court (after all) does not depart too much from national principles on the interpretation of contracts under Art. 1362 et seq. of the Civil Code, according to which a legal transaction must be framed by taking into account what is the actual will of the contracting parties, giving greater weight to the concrete manner in which the relationship is conducted: the nomen juriswhile remaining an element of necessary evaluation,[6] does not constitute a constraint on the judge called upon to decide the concrete case, who remains free to reclassify the relationship by conferring on it the legal character that he considers to be the most correct.[7]

(Cf. on this point: difference between agent and employee, difference between agent and business intermediary, difference between agent and distribution contract).

It is clear, therefore, that if
it is to be understood whether the brokering activity performed by
a platform online can be framed as an agency relationship,
one must not only verify whether the parties have attributed to the relationship
aforementioned qualification, but also to investigate what their common intention was, going
to identify the main element characterising the activity of

The starting point for this interpretation is to determine what an agency contract is; the definition of agent given in Art. 1742 of the Civil Code certainly comes to our aid:

"With the agency contract, one party assumes the task on a permanent basis
to promote, on behalf of the other, against remuneration, the conclusion of
contracts in a given area.

To simplify, the basic elements of such a contract are:

  1. the promotion of contracts (both goods and services);[8]
  2. the stability of the assignment;
  3. the onerousness of the contract;
  4. autonomy.

In any event, one may go so far as to state that the most typical activity of all those listed above is certainly that of business promotion, to be understood as the work of (steadily) searching for and convincing the potential client, destined to lead in the event of success to the conclusion of a contract between client and principal.[9]

That being said, if agency activity were to be limited to sales promotion, understand whether the intermediation of a platform online can be brought under this contractual scheme would be almost straightforward. In any case, the issue becomes more complicated if one takes into account the fact that the promotion of the deal does not exhaust the tasks exercised by the agent, which normally include a number of preliminary or collateral activities, very often ancillary to the agency contract and functional to it.

The agent must first identify the potential customer, contact him/her and explain the typical characteristics of the products; he/she may be required to hold the principal's products in stock and subsequently deliver them to the buyer, participate in the advertising campaign, as well as be entrusted with the post-sales; he may also carry out technical product support, or be asked to organise and lead an underlying sales network.[10]

(Cf. Agent and/or Area Manager? A brief overview)

As if this were not enough, ancillary activities to the agency contract may also include verifying the correct display and presentation of products at the point of sale, as well as controlling the flow of purchases made there (so-called "sales"). sell out e sell in).[11] In line with this guideline, the Supreme Court has even found it compatible with the agency relationship to perform anancillary activity of "merchandising"namely

"a contract having as its object
object [the choice of modalities for] displaying products in spaces and
on the sales counters of a department store or shopping centre,
in order to make the products themselves more attractive to consumers
. "[12]

In summary, case law considers compatible with the agency contract a whole series of complementary activities to the principal one of business promotion, provided (and with the limitation) that such services are not predominant and thus not such as to change the typical cause of the relationship.[13]

Applying the above principles to the electronic marketplace and more specifically to the world of platforms online, it may reasonably be argued that the intermediation activity carried out through such an intermediary may potentially fall within the contractual scheme of the agency contractnot only if the platform performs only a sales promotion activity, but also if it offers further ancillary services, provided that they do not prevail over the main activity.

approach, in the writer's opinion, would also be in line with the
case law of the Court of Justice referred to above, taking into account that
this, in ascertaining whether or not the Airbnb platform could be
framed as a 'real estate agent' explicitly took into account the fact
that the main element characterising brokering activities were
related additional services[14] which, although they constituted
"an integral part of a global service"[15]were not such as to
distort the characterising activity provided by Airbnb.

While it is considered that in principle a platform online can work as a commercial agent, it is certainly a very complex task to try to adapt legal principles and jurisprudential guidelines that have been developed over the years solely on 'traditional' agency relationships to this type of market. An attempt will be made below to give the reader some hints that may help in carrying out this interpretative process, going back to the typical and accessory activities of the agency contract referred to above and attempting to understand whether and how they may be adapted to the market onlinealbeit in the knowledge that this is only food for thought on a new and very complex subject.

a) Sales promotion, customer identification and product illustration.

There is no doubt that the identification of a customer within an area can be done through the use of electronic tools such as the SEO[16]product illustration can be rendered through the use of photos, films, descriptions, as well as of live chat prepared directly by the platform, either by personnel assigned to this task (internal or external to the platform), or by automatic response programmes that use algorithms to detect the most frequent questions from customers.

b) Participation in the advertising campaign.

Again, the advertising campaign can be utilised through the use of very accurate digital tools integrated with the platform: think of the best known tool, namely Google Adwordswhich makes it possible to identify in a very precise and detailed manner not only the type of user (and therefore potential customer) towards which an advertising campaign should be directed, but also delimiting the territorial area where to direct such promotions (a means to comply with any zone limits that may be imposed on the platform/agent by the principal)

(Cf. Area exclusivity in the agency contract).

c) Merchandising and sell in and sell out activities of online platforms.

It is certainly not unusual for a platform online can take maximum care of the correct display and presentation of products on its site, automatically suggesting certain products to customers who have already made purchases, or to potential customers on the basis of searches made by them on Google. In addition, the activity of controlling incoming and outgoing sales is very often used as an default from different platforms, which indicate to the user the availability of the products offered on the platform.

d) Storage activities.

This service is also often rendered by many platforms onlineplatform, as it allows companies using the platform to relieve themselves of managing a logistical activity that (particularly with regard to retail) requires a know-how highly developed, which they often do not possess, i.e. they do not have sufficient resources to manage it.

e) Remuneration or commission: commercial agents?

It is very common for a platform to be remunerated by the payment of a percentage of the amount of the completed transaction; this element may also be considered as an indication of a relationship within the scheme of agency, since such remuneration may be framed as a commission on the conclusion of the transaction (pursuant to Art. 1748 of the Civil Code).

(Cf. The agent's right to commission).

It is clear that only a few elements characterising the agency relationship have been briefly developed above, and other equally (if not even more) important points of this type of contract have not been analysed (e.g. the relationship of interdependence between platform and producer, representation, possible social security repercussions, etc.), since this would certainly require a more in-depth analysis. It should be noted, however, that the purpose of this article was certainly not to conduct a comprehensive analysis of this issue, but merely to draw attention to a subject that is as important as it is topical.

In light of the above, not only can it not be excluded that platforms online can carry out the activity of commercial agents, but it is likely that already some platform online is in fact carrying out this activity, without having been classified as such.

In any case, considering the potential of the network and the services that can be rendered through this medium, perhaps we should start thinking that the electronic marketplace should not a priori be considered an 'enemy' tool to the agency relationshipbut rather a means of expanding and enhancing the commercial capabilities of agents and companies. In all likelihood, this model should be increasingly encouraged and possibly integrated within the sales brokerage strategies of the distribution networks of national companies.

[1] Judgment of 20 December 2017, Associación Profesional Elite Taxi vs. Uber Systems

[2] Judgment of 10 April 2018, Uber France

[3] Judgment of 19.12.2019 Airbnb
Ireland UC vs. Association pour un hébergemen et un tourisme professionnels.

[4] if you search
within European legislation, the only definition we are given is
that of "online brokerage"referred to in Article 2 of Regulation 2019/1150[6]This standard qualifies
such activity as that performed by the "company services
', pursuant to Article 1(1)(b) of the directive 2015/1535[7]in turn taken up
by Article 2(a) of the  Directive 2000/31[8] on trade

[5] Uber Judgment No. 40.

[6] Cass. civ. Sec.
Labour Ord., 2018, no. 18262.

[7] Among many, cf.
Milan Labour Court, 26 October 2017.

[8] Interesting
consider that the directive
on the coordination of Member States concerning the
agency, only covers agents promoting sales contracts
of goods, whereas our law covers the brokering of any
contract, including the provision of services. The Court of Justice Poseidon
,Judgment 16.3.2006
However, it recognised the
possibility for member states to include the
agency contracts also the provision of services. On this point cf.
Bortolotti, Contracts
of distribution, p. 106, 2016, Wolters Kluwer.

[9] Bortolotti, p. 106,
op. cit.

[10] On the subject of activities
ancillary to the agency contract, cf. Venezia, Il contratto di agenzia, p.
600, 2015, Giuffrè Editore.

[11] Bortolotti,
p. 106, op. cit.

[12] Cass. civ. Sec.
labour, 2004, no. 6896.

[13] On this point Cass. Civ.
2006, no. 1308, Bortolotti, op. cit., p. 118 et seq.

[14] I
services taken into account are those referred to in paragraph 19 of the judgment
i.e. 'In addition to the service of putting landlords and
lessees via its electronic platform of centralised
offers, Airbnb Ireland offers hosts a number of other
services, such as a scheme defining the content of their offer, in
option, a photography service, likewise as an option, insurance for
liability as well as a guarantee for damages up to an amount of
to EUR 800 000. In addition, it provides them with a service
optional to estimate the price of their rental in the light of the averages of
market derived from said platform. [...] Airbnb Payments UK holds the
funds on behalf of the lessor after which, 24 hours after the lessee's entry
in the accommodation, it transmits them to the landlord by bank transfer, thus enabling the
lessee to have the certainty of the existence of the asset and to the lessor the
payment guarantee. Finally, Airbnb Ireland has set up a system
by which the lessor and the lessee can make a judgement
by means of a vote ranging from zero to five stars, a vote that can be consulted on the
electronic platform in question.'

Airbnb Ireland Judgment, No. 54.

[16] SEO stands for Search
Engine Optimisation
or "search engine optimisation".
This term is used to refer to all work and
implementations necessary for a website to have the structure and
content that is easy for search engines to index.