Can the parties request witness evidence of the existence of an agency contract?
What happens if the parties do not conclude the agency agreement in writing, but only on the basis of verbal agreements? Can the parties prove the existence of the relationship by means of witnesses?
With reference to these aspects, the second paragraph of Article 1742 of the Civil Code provides that "the contract must be proven in writing. Each party shall be entitled to obtain from the other a document signed by it reproducing the contents of the contract and of the additional terms".
The Court recently ruled on the interpretation of this rule, consolidating what is the orientation of case law, according to which the agency contract cannot be proved by witnesses, but only in writingexcept to prove the blameless loss of the document (Cass. Civ. no. 16/03/2015, no. 5165) (cf. also What is the difference between an agency contract and a business intermediary? e Main differences between the agency contract and the commercial distribution contract).
Although at first glance this judgment does not seem to add much to what is already set forth in Article 1742 of the Civil Code, a closer reading of the regulatory text reveals that this article may give rise to conflicting interpretations and generate rather significant problems. Specifically, this rule, on the one hand, imposes on the parties the burden of proving the agency contract in writing, implicitly excluding evidence by witnesses, but, on the other hand, attributes to them the unwaivable right to demand a written document from each other incorporating the content of their verbal agreement.
It is clear that the coordination between the requirement of the written form and the right of the parties to obtain a document reproducing the content of the agreement contains inconsistencies within it: think of the (rather frequent) case where the parties have entered into an agency agreement verbally and, in the course of the relationship, the principal refuses to provide the agent with a written document reproducing its contents.
In such a case, may the agent, who is granted an unwaivable right to have the verbal agreement set out in a written document, take legal action to obtain such a document and, in order to prove the existence of the contractual relationship, request evidence by witnesses?
To answer this question, it is necessary to take a small step back and analyse the origin of the current wording of the regulatory text. Article 1742 of the Civil Code was thus amended by Legislative Decree No 303 of 10 September 1991, which expressly transposed European Directive 86/653on the coordination of the laws of the Member States relating to self-employed commercial agents.
The directive, specifically, introduced two fundamental concepts, namely:
- to give each party the right to request and obtain from the other a signed document reproducing the contents of the agency agreement (Art. 13(1));
- to allow Member States, if they so wish, to "provide that an agency contract shall only be valid if evidenced in writing." (Art. 13, §2)
In introducing these general principles, the directive was inspired by the German model, which at the § 85HGB (Handelsgesetzbuch - Commercial Code), explicitly provides (and provided) for the right of each party to "demand that both the content of the contract and subsequent agreements relating to it be included in a document signed by the other party. "
It is necessary to specify that such a document drawn up by only one party would not constitute a real contract, but rather a unilateral declaration by which one party indicates what it considers to be the content of the contract. (see Bortolotti, Contract Handbook of International Commercial Law)
Therefore, according to the legal text, the parties, who have not entered into a contract in writing, cannot prove in court, by means of witnesses, the contractual relationship and any changes to that relationship (e.g. increases in commissions, expansion of the area) that were agreed upon between the parties orally. To the contrary, will only be able to prove whether there are 'written traces' proving the actual agreement of the parties, such as exchanges of e-mails and correspondence, order confirmations from which the actual existence of such changes can be presumed, etc.
In any event, as noted above, the (unwaivable!) possibility of the party requesting to be provided with a written document reproducing the content of the contract is expressly provided for. But what happens if the other party refusesor does not recognise that verbal agreements existed between them. In such a case, could the requesting party take legal action to have the existence of the relationship recognised and use witnesses to do so?
On the basis of the foregoing, this question no longer seems to be a foregone conclusion, and the interpretation of the Supreme Court, examined above, according to which "the agency contract must be proven in writing, pursuant to Article 1742(2) of the Civil Code, as amended by Legislative Decree No. 303 of 10 September 1991, so that testimonial evidence (except to prove the irresponsible loss of the document) and evidence by presumptions is inadmissible", may not be agreeable in part.
According to authoritative doctrine (Bortolotti), the party's unwaivable right to be able to obtain a written document reproducing the content of the contract, is not compatible with a restrictive interpretation of the rule, which would prohibit the possibility of using witness evidence to obtain such a written document.
If one were to follow this interpretationnot only very authoritative, but also highly consistent with the practical needs of the parties and the practice of business relations, the party wishing to obtain from the other party a written document reproducing the existing verbal agreements may use testimonial evidence in the proceedings aimed at obtaining the written document from the other party. After obtaining such a document, the party may assert its rights in the course of any dispute.
This orientation is mainly based on the fact that, the choice of the legislator to introduce the requirement of the written form is incompatible with the (inalienable) right of the parties to have the verbal agreement incorporated in writing.
If this were not done, one would find oneself in the paradoxical situationof the party to be able to exercise its unwaivable right. The purpose of the rule is to enable a party to obtain a written document that facilitates the protection of its rights and, therefore, to require written proof of the herbal agreements that a party requests to be formalised would constitute a paradox, which would therefore render the rule under scrutiny completely ineffective.
