Italy: The New Discipline of Italian Agency Contract: another step to conform to EU rules

Last Updated: 14 July 1999

D.Lgs. 15 february 1999, no. 65 has introduced a new discipline concerning agency contracts, with the aim of conforming Italian rules with EU Directive 86/653. This intervention is actually the consequence of the infraction procedure started by the EU against Italy and due to its delay in effecting the Directive.

The first innovation concerns the form of the contract: the latter indeed has to be ôproved in writingö and each party (agent or principal) has the right to obtain from the other a written document reproducing the contents of the contract, which may be even verbally stipulated (see art. 13 of the Directive and art. 1742 of the italian civil code). The written form, indeed, is just a formal requisite, not a substantial one, and consequently a verbal contract is pefectly valid, but, in the event of a dispute, its existence shall be proved only through a written evidence and not, for instance, through witnesses. As we said, in case of a verbal contract, each party shall have the right to obtain, and the corresponding obbligation to provide, a written reproduction of its contents.

The second relevant innovation concerns the payment of commissions (see arts. from 2 to 12 of the Directive). Under the previous law the agentÆs right to commissions was supposed to arise only once the contract had been regularly performed, both by the principal and by the client. The commission, therefore, was due at the very moment in which the principal received the whole payment from the client. The new provision (art. 1748 c.c.) states that the right of the agent to receive commissions arises at the moment of the stipulation of the contract between the principal and the client and the right itself matures when the principal fulfils his obligations or when he should have fulfilled them. The parties are intitled to derogate from this rule as well, providing that the agent shall mature his right to commissions only as soon as the client has also fulfilled his obligations (or should have performed them, the principal having already fulfilled his own), so that the whole contract has been completely and regularly executed. The principal can claim back such commissions only if, and in the measure that it becomes certain that the contract between the client and the principal will not be performed, because of events which the principal himself can not be blamed for.

The third innovation is linked to the indemnity due in the event of termination of the agency contract. The previous formulation of art. 1751 c.c. subordinated the right of the agent to receive this indemnity under either of two conditions. This was in contrast with art. 17 of the Directive, according to which such conditions had to be complementary: the new law rectifies this mistake, so that both conditions now have to be present. Thus the principal shall have to pay the indemnity if the agent has brought new clients or has developped the business with the existing ones and the principal still receives benefits from such dealings (first condition), should the indemnity be fair as well, considering all the circumstances of the case (second condition).

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.

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