Harms it not have contracts written with its commercial agents

In all States of the European Union, commercial agents benefit from the protection and rights provided for in the directive. Although the directive is concerned primarily the interests of agents, it is feasible to include in a written contract clauses that significantly improve the situation of the company. Let's see two examples.

The legal relationship between the company and agent is regulated by law 12/1992 of 27 May on contracts for the Agency. This law is the result of the transposition of the Directive 86/653. This directive had aimed the coordination of the laws of the Member States with regard to independent commercial agents. This means that all States members of the European Union, commercial agents benefit, at least, the protection and rights provided for in the directive. Such rights include the right to compensation in case of new customers have contributed to the company or have significantly developed the operations with existing customers, and the right to a notice in the event of termination of the contract.

However by the fact that the directive worry mainly the interests of workers, usually as the weak part in the relationship with the exporting company, it is feasible to include in a written contract clauses that significantly improve the situation of the company. If we do not have a written contract, we lose this opportunity. It is impossible in an article like this to collect all the advantages that it can be assumed to have a written contract drawn up properly, but let me give two examples.

According to the provisions of the applicable international Convention, if the parties not choose the law applicable to their contractual relationship in writing, shall apply the law of the country in which the agent is domiciled. The directive also does not prevent the parties to choose the applicable law. This means that if we have a commercial agent in France without a written contract, or have a contract which not provides expressly that the applicable law is the Spanish, the French law. The French right at the same time provides for officials much higher compensation (about double) in the Spanish right. For agents that generate high commissions, you can make a difference of hundreds of thousands of Euros, which they could have avoided with an appropriate wording.

The inclusion of a clause of non-competition after the expiry of the contract. With a few limitations in scope and time, such clauses can be included, and can be very valuable to the company, due to the knowledge that the agent has the commercial policy of the company. If there is a written contract with such a clause, the agent may immediately after termination of agency contract representing any competitor of the company, taking advantage as well as the knowledge acquired. It is true that the existence of a clause of non competition reinforces the right of the agent to claim compensation for clientele, but benefits can make it worthwhile to include the clause, however.

So while many entrepreneurs think that not having formal contracts in their interest, the reality is that it often not the case for exporting companies, and even less for its relations with commercial agents.