Article 1749 of the Civil Code grants the agent the right to inspect the principal's accounting records. The purpose of this rule is to make the ratio as balanced as possible between the agent and the principal, especially in cases where the agent himself has no powers of representation and is therefore not in a position to directly verify what business has been concluded by the principal.
Specifically, the second paragraph of Article 1749 of the Civil Code,[1] provides that:
“the principal delivers to the agent a bank statement commissions due at the latest on the last day of the month following the quarter in which they accrued. "
The third paragraph of Article 1749 of the Civil Code states that:
"The agent is entitled to demand that he be provided with all the information necessary to verify the amount of the commission paid and in particular an extract from the books.”
This article is essentially based on the general principle that the principal must act with loyalty and good faith vis-à-vis the agent, imposing, on the one hand, on the principal itself the obligation to make available to the agent, at least on a quarterly basis, a statement of the commissions due, as analytical as possible, and, on the other hand, the agent must have the possibility of verifying that the commissions paid have been calculated correctly.
The importance of this rule is underlined by the fourth paragraph of the same article, which stipulates thenon-derogationeven partial, of the obligations set out therein:
“any agreement contrary to the provisions of this article shall be null and void."
The main procedural tool used by the agent to assert this right is Article 210 of the Code of Civil Procedure. This rule states that the examining magistrate, upon application by a party, may order the other party or a third party to "produce in court a document or other thing whose acquisition it considers necessary for the trial".
The practical application of this rule is not always easy to solve (on the contrary...) and Italian jurisprudence has often had to solve numerous problems related to it.
First of all, it is important to emphasise that, for our legal system, the investigative tool provided for in 210 c.p.c. has residual nature and may only be used if the proof of the fact is not obtainable by the applicant and if the initiative is not merely for exploratory purposes;[2] the granting of such an application is left to the discretion of the court, which may admit it only if it finds that
"the proof of the fact to be proved cannot be acquired aliunde, since the initiative cannot have a merely exploratory purpose or replace the burden of proof placed on the party."[3]
It follows that the agent, who bears the burden of proving that business has been concluded, may not use that instrument to make up for the failure to comply with one of its evidentiary requirements and must prove that the failure to provide evidence is not attributable to it, and must also specifically indicate the documents from which it requests an extract (which must be directly or indirectly identifiable), since a request that is too general would in fact be exploratory and therefore inadmissible.
According to a recent Supreme Court ruling,
"the agent has a genuine right of access to the books held by the principal that are useful and necessary for the payment of commissions and for the transparent management of the relationship in accordance with the principles of good faith and fair dealing. Accordingly, the principal, when requested (even judicially), has a real obligation to provide the documentation and information requested by the agent in order to enable the exact reconstruction of the agency relationship. "[4]
The sentence continues:
"It is, however, incumbent on the agent acting in order to obtain the production of documents to infer and prove the existence of an interest in bringing proceedings, with circumstantial reference to the relevant events of the relationship (including, first and foremost, the sending or not of commission statements and their content) and an indication of the rights, certain or determinable, for the ascertainment of which the application is made."
According to this principle, an application requesting that the principal be generically ordered to produce statements of account of all customers that the agent has supplied (e.g. without indicating their names), or of customers that the principal has supplied directly in the contract territory (and on whose successful orders the agent would have received indirect commissions), would be likely to be held inadmissible as too general and thus exploratory.
If the judge recognises that the above-mentioned requirements are fulfilled, he may issue an order for the production of such extracts, whereby, in practice (at least in my personal experience...) the principal is ordered to produce the commission statements/accounting sheets relating to the customers for whom the agent has filed an application formerly Article 210 c.p.c.
In essence, the documents to which the agent's right of access applies will be:[5]
- the sales invoices issued to customers;
- the copy of the vat books, the delivery notes of the goods;
- the ENASARCO payment receipts and in any case all those documents necessary for the verification of the individual deal;
- as well as the commission statementsall obviously referring to the area and the period in which the agent carried out his duties.
The judge, having obtained the documentation, may then order a technical accounting expert's report, aimed at verifying the orders received by the principal and counting the payment of commissions.
From a practical point of view, it must also be pointed out that this can often lead to very significant practical problems, arising from the fact that from the documents produced, and elaborated by the expert, often a copious amount of information emerges that was previously unknown (to at least one) of the parties and that this information can give rise to "a case, in the case."
Finally, it should be noted that Art. 210 of the Code of Civil Procedure is not the only instrument in the hands of the agent, who, according to the majority of case law, is in any event entitled to request the commission statement pursuant to Art. 1749 of the Civil Code, also autonomously by way of monitory proceedings.[6]
As may be understood, this issue is of absolute importance, since fundamental rights derive from Article 1749 of the Civil Code that ultimately enable the agent to prove its right to payment of commissions.
[1] Article that transposed by Legislative Decree No. 64 of 1999, Art. 12(2) of Directive 86/653/EEC, which gave the agent the right "to demand that he be provided with all information, in particular a extract from the booksavailable to the principal, necessary to verify the amount of commission due to him. "
[2] See Cass. Civ. 2011 no. 14968
[3] Cass. Civ. 2011, no. 26151.
[4] Cass. Civ. Sec. labour, no. 19319 of 2016.
[5] See Buffa, Bortolotti & Mathis, Distribution Contracts, Wolters Kluver, 2016.
[6] Cass. Civ. 2010, no. 20707.