The agent's obligation to inform the principal

The duty to provide information is governed by Art. 1746 of the Civil Code. This provision requires the agent to provide the principal with information on market conditions in the assigned area, as well as any other information useful for assessing the convenience of individual business. Specifically, that article provides that the agent shall:

"provide the principal with information regarding market conditions in the area assigned to him, and any other information useful for assessing the suitability of individual deals"

As can be seen, the information requested from the agent can be of two types:

• information concerning the market conditions;
• information needed to assess the convenience of the deal.

The agent, therefore, plays a dual role in the contractual relationship. On the one hand, he has to sound out the development of the area and customers entrusted to him, in order to keep the principal up-to-date on what is actually happening there. On the other hand, he performs the delicate task of scrutinising the suitability of individual deals and the solvency of the customers to whom orders are given.

Not a few problems arise precisely from the interpretation of this article. In particular, it is not easy to understand what are the limits to the principal's right to demand detailed and continuous information from the agent: as a general rule, it is considered that an excessive extension of this obligation could even be considered an indication to question the agent's independence and thus make the relationship qualify as an employment relationship.

That said, with reference to the duty of the agent to inform on the market conditionsit is possible to hold that the principal may require the agent to keep the agent informed, to the extent possible, of everything of which it becomes aware concerning the market situation and its changes in relation to the area assigned to it. This does not implyhowever, an obligation on the agent to make assessments, forecasts or indications as to the future prospects of the market itself. Indeed, the agent is only obliged to report information on potential or actual competitors, which is necessary for the principal to formulate a commercial policy that can be as effective as possible in the area assigned to the agent.

Under the second aspecti.e. the obligation to assess the suitability of the bargain, the agent must assess for each individual bargain (and client) what the contractor's concrete capacity to perform is.

Supplementing the provisions of Article 1746 of the Civil Code, Article 1 of the AEC Industry 2014 and Trade 2009 provides that, unless otherwise agreed,

"The agent shall carry out his activity autonomously and independently [and][...] shall be obliged to keep the principal constantly informed of the situation on the market in which he operates, but shall not be obliged to report at predetermined intervals on the performance of his activities. "

Art. 5 of the AEC Industry and Art. 4 of the AEC Commerce also clarifies that the agent:

"must perform the task entrusted to him in accordance with the instructions given by the company and provide information concerning market conditions in the area assigned to him, as well as any other information useful to the principal in assessing the suitability of individual deals. "

The agent is therefore on the one hand obliged to inform the principal and on the other hand has the right to act in full organisational autonomy: it is therefore necessary to find the right balance between the opposing demands of the agent's organisational autonomy and his obligation to follow instructionsi of the principal.

Therefore, on the one hand, the principal, having to respect the agent's autonomy, may not, for exampleon the one hand, impose on the agent the daily list of customers to be visited and plan the itineraries to be followed by the agent, but on the other hand may ask the agent to visit certain customers or categories of customers it cares about and require the agent to organise the visits in such a way as to adequately cover all customers and to report back to it.

That being said, doctrine and case law hold that the obligation to provide information has no fundamental relevance . In any event, it may in concrete terms be of such relevance as to justify, in the event of a breach, the termination of the relationship due to fault on the part of the agent, if the omissions are likely to cause serious negative consequences for the principal's business performance (Cass. Civ. 1994 No. 7644).