The purpose of this article is to give the reader some elements for a better understanding of the regulation of the agency contract in Germany, the importance of which is very significant, taking into account the fact that the European directive on the subject of agency was inspired by this model and, consequently, Italian legislation, too, was adapted to it, with the regulatory interventions of 1991 and 1999 the figure 

1) Agency contract and self-employed person.

In German law, the legal figure of the commercial agent is governed by Book 1, Title 7 of the German Commercial Code (HGB- Handelsgesetzbuch) and more precisely by §§ 84-92c. Section 84 HGB opens this title with a definition that qualifies the commercial agent as one who is entrusted by a principal with the task of interceding, in the capacity of an autonomous trader, in business transactions in favour of the latter or of concluding them on its behalf. An agent is one who performs his activity in substantial autonomy and can regulate his own working hours.

This legislative assumption is obviously used in the courts to distinguish the commercial agent from the employee. Case law considers the definition in § 84 Para. I HGB as a general parameter for being able to distinguish the two legal figures, although the circumstances of the case must be taken into account in their entirety and totality.

Given the generic and not easily interpretable character of the concept of autonomy required by § 84 HGB for commercial agents, case law has repeatedly come across this problem. In a well-known ruling of the Federal Labour Court (BAG) in 2003, several contractual agreements were defined as "Arbeitnehmerverdächtig", i.e. which give rise to the suspicion of an employment relationship. Some of them are listed below:

  • request for the transmission of a quarterly forecast on the development of production, covering the individual production departments and a forecast of the percentage assessment of the closing of business of individual customers. Such a request goes beyond the duty to protect the interests set forth in § 86 Para. 1 HGB, which obliges the agent to endeavour to sell products or to complete business, taking into account the interests of the principal;
  • orders to block holidays. This limits the agent's autonomy to determine working hours;
  • the name of the contract is irrelevant for the classification of the legal figure; the absence of an agreement on the beginning and end of the working hours and on the indication of the organisation of the work will be interpreted in favour of the commercial agent's autonomy:

On the contrary, it does not preclude autonomy:

  • the obligation to attend weekly 5-hour conference calls and, in extraordinary cases, to carry out collection orders within a short time,
    the imposition of deadlines for the completion of work, as well as, during the company's settling-in period, the blocking of holidays for a period of 4 to 8 weeks;
  • the communication of production targets, if there remains a considerable margin for self-organisation of working hours:
    an obligation to provide information, unless the agent is obliged to provide copious information on its activities and at short intervals;
  • a quarterly forecast on the development of production certainly exceeds the usual duty to inform, but in itself cannot be regarded as a substantive indication of subordination;
    the agent's prohibition of competition;
  • instructions on working hours, as the employees of the external service also have to adapt to the time requirements of their customers.

According to the OLG (Oberlandesgericht - Court of Appeal) in Koblenz, the type of relationship is explicitly inferred from the personal dependence between the two legal figures and that an economic dependence is neither necessary nor sufficient.
The fact that the agent is linked to the principal through indications and directives that the latter has the power to issue, in general does not affect what is the status of the agent as an independent worker. The employee is one who, unlike the agent, performs his services within an organisation defined by a third party. Relevant for the qualification of the legal figure are the circumstances under which the service is performed and the manner of payment, or purely formal connotations such as the payment of taxes to the social security and health care institutions or the keeping of the agent's personal files.

2) The right to commission.

The agent has according to the § 87 para. 1 HGB right to commission. The agent may exercise this right on all business the conclusion of which has been made possible through an activity attributable to him, or on business concluded with third parties acquired by the agent as clients for business of the same type (§ 87 para. HGB). Therefore, in order to claim the right to commission, it is sufficient to any cooperation of the agent that made it possible for the deal to be concluded.

The parties may, however, agree on an exception clause. Importantly, the second paragraph of Section 87 HGB provides that "the right to the provision ceases when it is certain that the third party does not perform, the sums already received must be returned” ( 87a para. 2 HGB) (so-called star of belief).

It is important to specify that if the principal does not perform the deal completely or partially correctly or in the manner in which it was stipulated, the agent is nevertheless entitled to commission (87-a para. 3 HGB). However, the entitlement to commission shall lapse if the non-performance is attributable to conditions that are not the responsibility of the principal.

La German Supreme Court (BGH - Bundesgerichtshoff) recently ruled on §87a para. 2 HGB specifying that this does not apply if the third party has failed to perform due to a failure to perform on the part of the principal or due to causes attributable to the principal. The Court further specifies that the principal is liable for all situations that led to the non-performance, not only when they are attributable to its personal fault, but also when they are attributable to an entrepreneurial or business risk.

Although it is in the principal's interest to receive the highest number of offers from the agent, the principal's right to decide whether to accept the proposed deal remains unaffected. This decision-making power in the hands of the principal results indirectly from the 86a para. 2 HGBwhich obliges the latter to inform the agent of its intention to accept substantially less business from the agent. This decision-making power is, however, not unlimited: the principal may not refuse completely arbitrarily the conclusion of a procured contract. It must also be emphasised that jurisprudence considers it to be outside the powers of the judge to interfere in the policy of the company, evaluating the decisions taken by the latter. Therefore, the judge must accept any decision that may appear at least plausible.

3. The Area Agent.

Flanking the figure of the agent is that of the area agent (Bezirkshandelsvertreter). This figure is characterised by the fact that he/she has to deal exclusively with an area, entrusted to him/her by the principal or, in other cases, with a specific clientele.

The § 87 para. 2 HGB provides that the area agent is also entitled to commission for business that has been concluded, within the area assigned to him, albeit without his cooperation. Precisely for this reason, it is evident that the appointment of an area agent may have to be rather concealed. It is assumed that the agent may be considered a zone agent if it has been sufficiently clearly qualified as such. In the event of a dispute, the burden of proof falls on the one who claims that the agent is so qualified. Any contractual uncertainties must be clarified by the contracting party.

As for the obligations of the agentThe latter, in carrying out his activity, must look after his area continuously and with particular care, and only by acting in accordance with these criteria will he be entitled to the commission.

A rather recent BGH ruling stated that a business outside the area cannot be considered to be prevented a priori. In fact, if the principal accepts the business, this can be regarded as a tacit enlargement of the area or customer base.

As a rule, an area agent who, with the consent of the principal, carries out activities outside the principal's area or with customers other than those granted, is also entitled to the commission referred to in § 87 para. 1 HGB. However, the parties are free to agree otherwise.

4. Direct sales without producer intervention.

The direct sale to a customer by the manufacturer, despite the fact that the manufacturer has granted a exclusive right to the reseller, is to be considered a breach of contract. But even in the case where exclusivity has not been granted, the manufacturer may not perform at its sole discretion, direct sales to customers in the area the dealer's responsibility.

According to the German Federal Court of Justice, the manufacturer must take due account of and may not, without good reason, oppose the legitimate interests of the retailer who subjects his business and operations to the requirements of the manufacturer.

In a Judgment of the Düsseldorf Court of Appeal of 21.06.2013 (G.R. No. 16 U 172/12) the judges instead denied the existence of a violation of theobligation of loyalty because the manufacturer had not arbitrarily disregarded the legitimate interests of the retailer. In this case, the customers had in fact reiterated that they wanted direct sales from the manufacturer, otherwise they would not have purchased the products.

Considering that the reseller had only a de facto exclusive right, which had not been contractually agreed upon, this decision of the customers constituted, according to the courts, a sufficient reason for the admissibility of direct selling to these customers, especially since the manufacturer had previously offered the reseller a commission payment as compensation.

5. Declaration of bankruptcy and entitlement to commission.

According to the § 115 para. I in correlation with the 116 paragraph I InsO (lnsolvenzordnung - 'bankruptcy law') the opening of bankruptcy proceedings leads to the termination of the agency contractwithout the need to give notice. A continuation of the contractual activities is only possible following an agreement, even tacit, between the agent and the insolvency administrator.

As for the claims to commission accrued following the conclusion of the new contract, these must always be considered as predeductible claims (debts of the estate) § 55 para. I, point InsO. Where the activities carried out by the agent prior to the opening of bankruptcy proceedings have not yet led to the conclusion of a contract with the third party, the entitlement to commission depends on the choice of curator to conclude the deal with the third party or not.

If positivethe right to commission is considered in the light of the 55 paragraph I point InsO as a preferential claim.

Otherwise The right to commission exists in any event irrespective of whether the liquidator has opted to conclude the contract with the third party or has refused it. In such a case, the commission shall be considered an unsecured claim ex § 38 InsO.

A different matter, however, with regard to the agent's entitlement to the non-competition indemnity under the § 90a para. 1 HGBIn this case, the right ceases in the event of termination of the contract following the opening of bankruptcy. At the same time, this event also terminates the agent's non-competition clause that the parties had agreed upon.

Finally, if at the opening of the bankruptcy the contract was already terminated the insolvency administrator may request ex § 103 InsO the maintenance of the non-competition clause and the right to compensation constitutes a claim on the bankruptcy estate.