Main obligations of the agent. Is a simple propaganda activity sufficient?

According to Art. 1742 of the Civil Code, the agent in the contractual relationship "undertakes on a permanent basis to promote, on behalf of the other, against remuneration the conclusion of contracts in a specified area." (cf. obligations of the agent under German law)

With reference to this article, the Court of Cassation recently pronounced a judgment that focused precisely on the essential elements of the agency contract. The Court specified that the activity of promoting the conclusion of contracts, which precisely constitutes the typical obligation of the agent pursuant to Article 1742 of the Civil Code, cannot consist in a simple activity of '....propaganda"even if this results in an increase in sales; in fact, a mere activity of promoting the conclusion of contracts is not sufficient to accrue the agent's entitlement to commission, as it is it is necessary for the agent himself to carry out an activity of convincing the potential customer to place orders for the principal's products. Only in that case, i.e. if the promoted contract is successful due to the agent's activity, will the agent be entitled to the commission. (see also Unilateral changes to the agency contract by the principal.The agent's obligation to inform the principal).

The Supreme Court has stated on this point that the agent's performance consists of

"at acts of varied and non-predetermined content - such as advertising, preparing contracts, receiving and forwarding proposals to the principal for acceptance - acts all of which tend to promote the conclusion of contracts in a particular area on behalf of the principalnone of these activities constitutes an indispensable component of the agent's performance." (Cass. Civ. 4.9.2014 no. 18690).

Case law, therefore, makes a clear distinction between propaganda and promotional activity.

The activity of promotion, in fact, is considered to be the typical performance of the commercial agent, pursuant to Article 1742 of the Civil Code. Promoting the conclusion of a contract therefore means pushing, proposing, implementing a series of activities so that certain contracts are concluded in a given area. Promotional activities, it should be noted, include several impulse' activities and 'facilitation', aimed precisely at the placement of a good or service in a given area, designed to increase or support towards purchase the demand for the product offered by the principal.

These impulse activities include (mainly) propaganda, which is designed to persuade and inform a potential customer of the existence of the product or service, illustrating its qualities and characteristics.

In any event, mere propaganda activity is not sufficient for an agency relationship to be deemed to exist. Lastly, I note that case law does not exclude the possibility of making the action of propaganda pre-eminent over that of preparing and arranging the contract.