In the circumstances of international agency agreements, parties in Italy may decide on the applicable law; they may choose Italian law, foreign law, the right of a third country or the right of more than one state. If the parties have not ruled on the applicable law, the law applies to the state with which the contract has the closest connection, which is generally the state in which the executing party has its usual residence. The agency contract can be either for a fixed term or for an indeterminate period. Under Italian law, an agency agreement, established for a fixed period, which will also be concluded by the parties after the expiry of the deadline, is transformed into an agency contract for an indeterminate period. What are the rules for international agency agreements? Article 1751 of the Italian Civil Code stipulates that in the event of termination of the agency contract, the agent is entitled to compensation as almost all the relevant provisions relating to agency contracts are enshrined in the Italian civil code in articles from 1742 to 1753. The previous year, this discipline was significantly modified to bring it in line with European directives. For many years, collective agreements (CBAs) have also governed agency contracts. These are regular agreements between associations representing adjudicating entities and representatives in different sectors (industry, trade and many others). The agency agreement is a legal contract by which a party (the agent) assumes the permanent mission to promote, on behalf of another party (the client) and for a fee, the conclusion of contracts in a given territory.
In Italy, the agency agreement is governed by Article 1742 and the Italian Civil Code, amended over the years by the European framework for harmonisation. Italian law provides for a very complex compensation scheme in the event of termination of agency contracts. In general, the CBA intends to transpose the provisions of the Civil Code and the provisions of Directive 653/86. However, contract CBAs often deviate from these rules and some discrepancies are significant. For example, CBAs allow a client to unilaterally change the representative`s territory, contract products, customer range, commission. CBAs determine in part differently the length of notice when indeterminate contracts are terminated. CBAs have their own calculation of the representative`s remuneration for the post-contract competition contract. CBAs have special rules regarding severance pay. The essential provisions of agency contracts in Italy, in particular with regard to relations between the main agents, are mainly found in the articles from 1742 to 1753 of the Civil Code. These provisions have been amended several times following the adoption of Directive 653/86/EC.
However, even in the absence of such cumulative conditions, contractual CBAs may still apply if they are expressly mentioned in the agency agreement or if their provisions are consistently respected by the parties. A particular aspect of the Italian trade agency is the relevant role played by national collective agreements (in Italian: “Accordi Economici Collettivi”). These agreements were negotiated by agent associations and major associations in various economic sectors. What are the main rules for agency contracts in Italy? The Italian agency contract is governed by Article 1742 and, under the Italian Civil Code and the collective agreement signed with the trade unions (agreementi Economici Collettivi “AEC” if applicable as AEC), only if the parties expressly agree to their application in the agency contract or refer to it when managing their relations.