Italy: Agency vs. Commercial Distribution - No Antitrust Annoyances

Last Updated: 10 November 1996
The contract of commercial agency, which sees an independent undertaking bound to promote the conclusion of contracts in the interests of its principal for a remuneration, has always represented one of the preferred instruments for the distribution and sale of industrial products.

The rigidity of costs and the complexity of management of a direct sale network which is sufficiently extensive, render in fact in many cases the latter solution anti-economic or even impracticable, whereas the possibility of partially transferring the financial risks through the involvement of third parties in the distribution process is substantially attractive.

On the other hand the use of independent distributors or even, to a lesser extent, of franchisees, often does not allow the principal a sufficient control over the distribution and marketing of the product concerned, given the fact that the purchaser/distributor would act as a distinct contractual party between the manufacturer and the customer. It must also be underlined the importance in the present field of anti-trust provisions, which sanction as "abuses of a dominant position" all those policies aimed at restricting the absolute freedom of the distributor such as his having to respect the territories granted to others, price-fixing, non competition obligations with the manufacturer in certain market areas, etc. Although there is also pressure to extend said provisions to agency relationships, at present they are not applicable and probably never will be since the manufacturer remains the only party legally involved in the contract to the end customer, and is naturally free to sell or not sell to whom it wishes and upon the conditions it prefers.

It is therefore necessary to draw attention to the profound revolution which, following the enactment of EC Directive no. 653/86, affected in the greater part of European countries the provisions on agency law previously applicable. Said revolution was mostly oriented toward an economic protection of the agent, almost as if he were a type of employee, as in the traditional direction of Italian provisions, rather than in that of other European legislations.

In implementation of this Directive new laws were enacted as well as in Italy, by Law Decree no. 303 of 10/09/91 - which will be illustrated in a next issue - in Germany (L. 23/10/1990), France (L. no. 593 of 21/06/91), Holland (L. 01/11/91) and Denmark (L. no. 272 of 02/05/90) and bills are pending in other member states such as, for example, the United Kingdom.

Furthermore, if, on the one hand, some provisions contained in the foreign laws substantially reproduce the content of provisions of the old Italian Civil Code, such as for example on the matter of the rights and obligations of the agent and the principal, or, in certain cases, the non-competition clause, on the other hand many provisions are more detailed and articulated, such as the right to the commission, the duration of the notice period in the case of a contract of indeterminate duration and the indemnity to be paid to the agent upon termination of the agency.

As far as regards, for example, the right to the commission, the new paragraph 87 of the German HGB, and arts. 6 and 7 of the French law establish that the right of the agent to a commission exists in the case of transactions concluded which lead back to the activities of the agent or concluded by the principal with third parties previously contacted by the agent for transactions of the same type. Of course the agent, if he has been assigned a specific territory or specific customers, will still receive a commission even for those transactions concluded in said territory or with said customers independently of his intervention, in the same way as under the former art. 1748 (2) of the Italian Civil Code. Both these laws govern inter alia, even if the German one is more detailed, those cases where the commission is due to the agent for transactions concluded after termination of the agency, thus resolving expressly a matter on which Italian precedents had for some time been uncertain. Similar provisions are also contained in the Dutch law (art. 74d), in the Danish law (paras. 9 and 10) and, with certain limitations, in the UK bill.

The above mentioned provisions are also innovative of Italian provisions prior to the reform on the matter of notice periods for withdrawal from an agency agreement of indeterminate duration. In fact, strictly observing art. 15 of the EC Directive they provide for a minimum notice of one month if the withdrawal occurs in the first year of the agency agreement, two months if in the second year and three months if it occurs in the third or subsequent years.

There is still the right of immediate withdrawal for serious fault of the other party or, only in the French law, in the case of force majeure; and furthermore the parties can establish longer notice periods, so long as the period provided for the withdrawal of the principal is not longer than that provided for the agent.

As regards the termination indemnity to be paid to the agent, art. 17 of the Directive provides that the Member States may choose between a termination indemnity in the true sense of the word, or a compensation for the prejudice suffered as a result of the termination. Germany, Holland (art. 740) and Denmark (paras. 25-27) have chosen the former of these alternatives, the German HGB in paragraph 89 establishing that the indemnity is payable should the agent, through his substantial activities, have procured advantages to the principal, or if the agent is thus deprived of the commissions to which he would have been entitled in the absence of withdrawal, or if it thus appears equitable in the circumstances; all within the limits of an amount equal to one year of commissions, calculated on the basis of the volume of transactions in the last five years.

The French law provides instead (arts. 12 and 13) that the agent is entitled to be compensated for the prejudice deriving to him as a result of the termination of the agency, the quantification of which must, like in the past, be determined on a case by case basis. Since, previously, the French Courts usually recognised the agent's indemnity equal to two years commissions, if a similar trend of precedent is confirmed, the indemnity recognised in France will be much higher than elsewhere.

In all the national legislations which we have examined, those cases in which the agent loses his entitlement to the indemnity are described in detail, and include its lapsing should it not be exercised within one year.

To conclude, the EC Directive and the relative implementing national laws appear to give the agent a more extensive protection than the previous one under the single legislations, even if with various differences. It would therefore appear opportune as of today to take account, when entering into international agency agreements within the ambit of the EC, of the considerable incidence of the new provisions on agency and of the significant differences still existing among national laws, especially in the matter of withdrawal and termination indemnities.

In Italy, the Law Decree 10/09/91 no. 303 regarding Agency Agreements has entered into force, so implementing in Italy the EC Directive no. 653/86. The amendments made by this act relate in particular to the amount of termination indemnity to which the agent is entitled, his right to commission for the contracts concluded by the principal after agency termination, the obligation to provide information to the agent, the notice period to be observed in the case of termination of the agency and finally the non-competition obligations applicable when the relationship between agent and principal has ceased.

First of all, whilst the old text of Art. 1751 of the Italian Civil Code provided for the payment, in the case of termination of an agency of indefinite duration, of an indemnity proportional to the commission paid during the agency and in the amount established by the national collective bargaining contracts, the new text of the present article provides for an amount which cannot be in excess of one year commission, to be calculated on the average of the commissions over the last five years. It appears advisable to evidence as of now how this new provision is potentially much more onerous for the principal, should the above indicated maximum amount be ordered.

It should also be mentioned that, differently from the provisions previously in force, said indemnity is not due in all the cases to the agent, but only where he has actually procured new customers for the principal or has considerably developed business with the existing clients, and the principal is still reaping substantial advantages from this, or finally should the payment of said indemnity appear equitable according the circumstances.

Naturally, the indemnity shall not have to be paid should the agency be terminated either for breach of the agent or if the agent withdraws from the agency for circumstances not imputable to the principal or in the case of assignment of the agency agreement to a third party. Furthermore, there is a limitation period of one year for the exercising of the right to the indemnity, and the establishing of the amount of it does not exclude the possibility of the agent claiming further damages.

The new wording of Art. 1748 appears to be particularly innovative as it expressly provides for the right to the commission even upon transactions concluded subsequently to the expiration of the agency, when it appears that the operation is due to the agent's activities. In this respect, the Italian legislator has not at all specified what the relevant circumstances should be, differently from the EC Directive, which instead describes analytically the cases in which the commission is to be paid.

Art. 1748 also lists a series of supplementary obligations to be observed by the principal. Amongst them, the obligation of supplying the agent with the information necessary for the performance of the agency and that relative to the acceptance, refusal or non-fulfilment of a transaction; the obligation to deliver to him, within one month, a schedule of the commission owed with regard to the previous three months' period and to pay him within the same time limit, or to supply the agent, at request of the last, with an extract of his accounting records in order to enable the same to verify the commissions which are effectively due.

With regard to notice for withdrawal from agency for an indefinite term, the new text of Art. 1750 of the Italian Civil Code now provides for a minimum of one month if the withdrawal occurs within the first contractual year and a supplementary month for each subsequent year the agency has been in force, up to a maximum of six months. Said provision appears to be more favourable to the withdrawing party rather than the provision set out in the national collective bargaining agreements in force up to the 31st of December 1991, which established, for exclusive agents, a minimum notice period of six months if the agency lasted less than eight years and of eight months for longer durations, with a reduction, in the absence of exclusivity, to four and six months. The possibility of substituting the notice period with an indemnity in lieu has also been abrogated.

Finally turning to regulations related to the non-competition undertakings which were not provided previously in Italian law specifically for agencies, Art. 1751 bis provides that said undertakings must be in writing, must relate to the same territory, clientele and type of products which are the object of the agency, and cannot exceed a period of two years after the expiration of the agreement.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions