While the exclusive right is a 'natural' element of the agency contract, it is not an 'essential' element, the contracting parties may derogate from this right, or contractually delimit its exact extent.
In Italian law, the agent's exclusivity constitutes a natural element of the contract: Article 1743 of the Civil Code, in fact, provides that "the principal may not use several agents at the same time in the same area and for the same branch of activity". This implies that, unless otherwise agreed by the parties, it is presumed to exist in the contractual relationship.
That said, it is noted that, although the issue of agent 'exclusivity' is of fundamental importance, the Community legislator in the dir. 86/653/ECC limited itself to partially regulating this institution, i.e. only with specific reference to the agent's commission (cf. Art. 7 Dir. 86/653/EEC).
It follows that, contrary to Italian law, the opposite principle applies in most European countries, i.e. that, in the absence of an agreement between the parties, the agent will not benefit from area exclusivity (cf. area agent, in German law).
Therefore, while in the European context (in principle), it is considered that zone exclusivity must be expressly agreed upon, in Italy the exclusive is regarded as a natural feature of the contract and, therefore, present in every relationship, unless the parties have stipulated otherwise (see also Agent and/or Area Manager? A brief overview.)
With regard to function, zone exclusivity evidently pursues the in order to protect the agent and his earnings prospects. Indeed, if the principal could use several agents in the same area, the agents would see their profit prospects significantly reduced: the agents would be in competition with each other and the commissions due for business concluded by one of them could not be paid to the others.
That being said, it should certainly be borne in mind that, while Art. 1743 of the Civil Code is intended to protect the agent from any direct actions of the principal in its area, theArt. 1748(2) of the Civil Code provides that the agent is entitled to commissions also on business concluded with customers ".belonging to the area or category or group of customers reserved for the agent". According to this rule, it is apparently assumed, unless otherwise agreed, that the principal is free to make all types of sales even in the areas that have been granted to the agent on an exclusive basis.
Italian jurisprudence, in an attempt to overcome this apparent contradiction, has expressed itself several times, asserting that the principal's right, under Art. 1748.2 of the Civil Code, to make direct sales also in the agent's territory, must be partially limited, since this right may be exercised only on an occasional basis and it must be ruled out that the principal may carry out a systematic and organised sales activities in the agent's exclusive area. It is stated, for example, in a recent Supreme Court ruling that:
"in the agency relationship, the principal may not operate, on a continuous basis, in the agent's area of expertise but, pursuant to Art. 1748(2) of the Civil Code, has only the power to conclude, directly, individual deals, even if of significant size, the performance of which gives rise to the agent's right to receive the so-called indirect commissions, has only the power to conclude, directly, individual deals, even if of significant size, the performance of which gives rise to the agent's right to receive the so-called indirect commissions; it follows that, where the proposer's intervention is merely isolated, the right to the payment of the commission is, in turn, episodic and not periodical, 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).
It must also be said that it is such systematic conduct is unlikely to be found in practiceas the principal tends to have no interest in selling directly if he then has to pay commission to the agent anyway. The manufacturer, in other words, would perform the same work as the agent in its stead, bear the agent's costs, without making a profit, and in any event have to pay commission to an inert agent. On the other hand, it is more likely that the principal, who on the basis of a reassessment of market conditions deems it preferable to sell directly to the end customer without using the agent any longer, would simply terminate the agency contract.
Nevertheless, it is nevertheless clear that this approach, according to which, in the absence of an agreement to the contrary, the principal must limit his activity in the agent's territory to occasional business, can give several practical problemsrelated precisely to interpreting the distinction, which is far from clear, between occasional, and therefore legitimate, breaches from continuing breaches of exclusivity.
In this regard, a orientation of authoritative doctrine (Bortolotti)According to which it is preferable to construe the exclusivity of Art. 1743 of the Civil Code as meaning that the principal is free to make as many direct sales in the agent's exclusive area as it wishes, provided that it pays the indirect commission, and that there is therefore a violation of the exclusivity only when the principal appoints other agents in the area or tries to circumvent the exclusivity by fictitiously interposing third parties in order not to pay the indirect commission.
In any event, provided that the exclusive right is a 'natural' element of the agency contract, it is not an 'essential' element, the contracting parties may derogate from this right, or contractually delimit its exact extent.
On the basis of the above, it is advisable, in order to avoid any uncertainty and reduce potential disputes to a minimum, to contractually clarify how and to what extent the principal may carry out direct sales in the territory and what the consequences are in the event of individual or repeated breaches of contract.