Unit 11 Flashcards
Define Agency Agreement
that by which a person, natural or legal, called Agent, is oblidged to another in a CONTINUOUS OR STABLE MANNER, in exchange for remuneration, to promote commercial acts or operations for another’s account, or to promote and conclude them on behalf and in behalf of other, as AN INDEPENDENT INTERMEDIARY, without assuming, unless otherwise agreed, the risk and venture of such operations
Describe the relationship between Principal and Agency
-Independent agent (not employees)
- Agent:
possibility of acting on behalf of several entrepreneurs.
However if products or services of another entrepreneur are of the same or analogous nature the agent will need express authorization from the existing entrepreneur
Describe the relationship between Agent and Client
-Agent: no representation of the principal (usually)
-Agent must warn on behalf of who promotes the contracts
-It must be limited to the personal (collective) or geographical scope entrusted
What are the obligations of the AGENT?
Basic:
loyalty and good faith safeguading the interests of the entrepreneur on whose behalf acts
compliance with objectives
non-achievement =contractual breach
Other:
-Promotion and where appropriate, conclusion of operations
-Inform the principal: reporting system. (especially on client solvency)
-Comply with entrepreneur’s instructions
-Customer complaints about the promoted operations
-Accounting keeping of the acts of each employer for which he acts
What are the obligations of the Principal (agency agreement)?
-provide, sufficiently in advance, promotional material
-Inform the agent about the variations in sales expectations
-Satisfy the remuneration: fixed and/or variable amount
-Inform the agent, as soon as possible, about the execution or lack of execution of the operations provided
Describe the duration of the contract, termination and its effects
contract lenght is possibly indefinite:
possibility of unilateral resolution with prior notification
(1 month notice per year up to 6 months notice)
Effects:
-Compensation for damages (for unamortized expenses;
only in indefinite contracts reported by the entrepreneurs
-Compensation for clientele:
whether for a specific or indefinite period of time, the agent who has brought new clients or increased operations with existing clients will be entitled to compensation if his previous activity can continue to produce substantial advantages for the entrepreneur
In what cases does the right to compensation cannot be exercised?
-Entrepreneur terminated the contract due to breach of the agent
-Agent denounced the contract (unless causes attributable to the entrepreneur, age, disability or illness)
-Assignment of the contract by the agent with the consent of the entrepreneur
Define Commercial Concession Agreement
contract betweeen two parties by which one undertakes to market (distributor/dealer), in the name and on its own account, the products of the other party (principal/producer), being able to enjoy an exclusive right and acting as the marketer under the supervision and assistance of the producer.
What are the elements of commercial concession agreement?
-RELATIONSHIP OF DEPENDENCY, but the degree will vary depending on the modality
-STABLE RELATIONSHIP
-ADHESION CONTRACTS (in certain networks uniformly between distributors is required)
-DEALER ASSUMES THE RISKS
-Contracts usually entail a transfer of rights over intengible assets (trademarks…)
What are the obligations of the DEALER?
MARKETING OF PRODUCTS
producer control to protect brand prestige
IN CASE OF EXCLUSIVE
obligation to refrain from selling outside its scope
PRODUCER SUPPLY
buy a certain number or quantity of products from producers during a certain period or time
What are the obligations of the PRODUCER (principal)?
-SUPPLY
-ADVICE AND ASSISTANCE
-RESPECT FOR THE EXCLUSIVE RIGHTS OF THE DISTRIBUTOR
(cannot have more distributos in that area and the other existing distributors cannot sell in that area)
Describe the Termination of a Commercial Concession Agreement?
Compensation Regime
-for unamortized investments
-by clientele
regime is not regulated by legal rule. Jurisprudential criterion: only if there is no just cause for the resolution and it is not by the will of the owner
Define a Franchise Agreement
Contract by which one company, the franchisor, assigns to another, the franchisee , in a given market, in exchange for a consideration , the right to operate a franchise, on a business that the franchisor has previously developed with sufficient experience And success
what are the characteristics of a Franchise Agreement?
BRAND
uniform presentation of premises and media
(transfer of use of trademarks and other industrial and intellectual property rights)
KNOW-HOW
communication to the franchisee of the set of knowledge or practical processes verified by the franchisor and the result of their experience
CONTINUOUS SUPPORT
the provision of commercial and/or technical assistance to the franchisee
SUPERVISION
What are the obligations of the FRANCHISOR?
-Pre-contractual information available to the franchisee prior to signing the contract
-Cession of the operation of the franchise
-Commercial or technical assistance
-Supply products or elements used
-Franchisee activity control
What are the obligations of the FRANCHISEE?
-Payment obligations
-Obligation to operate the business and to inform the franchisor
-Obligation of secrecy
-Obligation to follow the instructions, submission to control and inspection (common advertising guidelines, prohibition to sell or distribute products or services of third parties)
What is the duration of a franchise Agreement?
it can be both determined or idefinite
(MINIMUM DURATION OF 3 YEARS)
Possible damages due to extinction (jurisprudential estimates according to criteria for granting)
