The Agency Contract in Spain



The discipline of the agency contract in Spain, governed by Spanish Law 12/1992, is similar to that of Italy and other Member States, having transposed Directive 86/653 / EEC.


Nevertheless, there are certain profiles that should be taken into consideration when signing an agency contract with a Spanish party.


First of all, although the written form is not mandatory for the validity of this contract, it is important that there are no clauses that could lead one to think that there is a subordinate relationship between the Parties, as this could lead, by jurisdiction, to a conversion of the agency contract into an employment contract.


Certain relevant aspects of the Spanish discipline are illustrated below:

Duration

The agency contract can be for a fixed or permanent period. However, in the absence of an agreement between the parties on the duration of the contract, it is presumed to be permanent.

Terms of notice

Notice for permanent contract is 1 month for each year of validity the contract with a maximum of 6 months, even if the parties can agree on a longer term.

For fixed-term contracts transformed into permanent contracts (due to the continuation of the relationship after the end of the term): the period before and after the end of the contract is considered.


Compensation for failure to provide notice

It is not automatic. The jurisprudence is not univocal in this sense, as in some cases the agent will have to prove that he has suffered an emerging damage or loss of profit due to the lack of notice, while another case law states that the right to compensation for lack of notice depends on the circumstances of the case (good faith, business risk etc.).

Immediate termination

Spanish law allows immediate termination of the contract (for a fixed or permanent period), if one of the following situations occurs:

  • total or partial violation of legal or contractual obligations by the other party;

  • state of insolvency of the other party

Agent's termination indemnity


In the event of termination of the contract (for a fixed or permanent period), if the agent has acquired new clients for the principal or has significantly developed business with existing clients, the agent itself is entitled to an indemnity, if the principal obtains from the previous activity of the agent sensitive advantages as before and if the payment of the compensation corresponds to equity. Any non-competition agreements, loss of commissions, etc. are taken into account. The indemnity must not exceed the average annual amount of commissions obtained by the agent in the last five years; if, on the other hand, the entire duration of the contractual relationship is shorter, the compensation is calculated over the related period.


Jurisdiction and applicable law

Pursuant to EU legislation, the competent court, in the absence of an agreement by the parties, is that of the agent's domicile, and it is essential that the parties agree not only the applicable law, but also the jurisdiction to stipulate the contract.


The Spanish legislation provides that "In the absence of an expressly applicable law, this law will apply, the provision of which is mandatory", and at the same time that: "The competence to know the actions deriving from the agency contract corresponds to the judge of the agent's domicile, any agreement to the contrary being null and void".


Although Spain has transposed the rules of the Brussels Regulation, and the supremacy of international law is in force, the Spanish judges, by means of stratagems, tend to apply the provisions of the Spanish Law even in the event of an agreement to the contrary. For example: if the agent bring a legal action in Spain, and the Italian court is provided for in the contract but the defendant does not oppose the exception of jurisdiction, the Spanish judge will consider that he tacitly accepts the agent's forum.


In Italy, on the other hand, the tendency is to apply the forum agreed between the parties.


Practical tips


  • Find out which law is most favorable for the party, therefore make a comparison on the terms of notice, the various indemnities provided, etc.

  • If you opt for Italian law, expressly agree, pursuant to the Rome Regulation; the same applies to the competent court (even if you decide to apply Spanish law and want to opt for Italian jurisdiction, it is essential to include it expressly and to exercise caution in the event of a conflict).

Abogada Eugenia Ravagnan Venezze

This article is written by a licensed lawyer in Spain, member of our international network. The content of this article does not constitute legal advice, but has an informative function. For tailor made legal advice, contact the firm by e-mail to: info@dongpartners.eu or by phone +39 06 916505710. © Dong & Partners International Law Firm, All rights reserved.

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