TITLE TWO
COMMERCIAL EMPLOYEES AND AGENTS
CHAPTER ONE COMMERCIAL EMPLOYEES
Article 27. Definition
1/ Commercial employees are persons who are bound to a trader by a contract of employment and who assist the trader by doing work of a non-manual nature as a
salesman, secretary, accountant, inspector, director or any other role.
2/ Commercial employees are not traders.
Article 28. Law Applicable to Employment Contract
Without prejudice to the provisions of this Code, pertinent labor laws shall apply to commercial employees.
Article 29. Prohibition from Carrying on Private Trade
1/ A commercial employee may not carry on, on his own behalf or on behalf of a third party, a trade similar to the trade carried on by his employer.
2/ Where an employee infringes the prohibition under Sub-Article (1) of this Article, his employer may claim damages and the infringement will be a sufficient cause to cancel or refuse to renew the contract of employment.
3/ A contract of employment may only contain a prohibition from carrying on private trade upon the expiry of the contract of employment on the conditions specified in Article 2589, 2590 and 2592
of the Civil Code and with the trader agreeing to pay adequate compensation to the employee.
Article 30. Agents
1/ Commercial employees may act as agents by express or tacit agreement.
2/ The revocation of the power of agency shall not result in the cancellation of the contract of employment.
Article 31. Powers of Employee in Charge of Sales
1/ The employee in charge of the sales in a store shall be deemed to have a power of agency for the purpose of selling or receiving goods which come within the normal business activities of stores of such nature.
2/ He may demand that goods sold by him be paid to him, unless payment is to be made to a special account.
3/ The employee may not demand payment outside the store unless so expressly authorized or unless he produces a receipt signed by the trader.
Article 32. Definition
CHAPTER TWO MANAGER
1/ A Manager is a person who has been authorized, expressly or tacitly, to carry out acts of management and to sign in the name of the trader.
2/ A Manager is not a trader.
Article 33. Publicity
1/ Where a manger has been appointed, the trader shall cause an entry to be made in the commercial register.
2/ The manager shall have power to act by virtue of his appointment, notwithstanding that the provisions of Sub-Article (1) have not been complied with.
Article 34. Powers of Manager
1/ In his relations with third parties, the manager shall be deemed to have full powers connected with the exercise of the trade, including the power to sign contracts and negotiable instruments.
2/ Unless expressly authorized to do so, he may not sell, barter or mortgage immovable property, nor may he sell, hire or pledge a business.
Article 35. Restriction on Powers
1/ The powers of a manager may be limited to the management of a branch. Such a restriction shall not affect third parties in accordance with Article 103 of this Code unless notice of such restriction has been entered in the commercial register.
2/ Restrictions other than those stated under Sub-Article
(1) of this Article shall not affect third parties.
CHAPTER THREE
COMMERCIAL TRAVELERS AND REPRESENTATIVES
Article 36. Commercial Travelers
1/ A Commercial Traveler is a person, domiciled at the place where the head office of the business is situate and bound to a trader by a contract of employment, who is entrusted by the trader with visiting clients and offering to them goods or services in the name and on behalf of the trader.
2/ Unless otherwise agreed, contracts entered into by a commercial traveler shall be presented to the trader for his confirmation.
3/ Commercial travelers are not traders.
4/ Without prejudice to the provisions of this Code specifics about commercial travelers domiciled in foreign countries shall be determined by relevant law.
Article 37. Commercial Representatives
1/ A Commercial Representative is a person, not domiciled at the place where the head office of the business is situate and bound to a trader by a contract of employment, who is entrusted by the trader with promoting his goods and services, conducting market survey and carrying out similar tasks that support the expansion of the trader’s business.
2/ Commercial representatives are not traders.
3/ Without prejudice to the provisions of this Code detailed rules applicable to commercial representatives of foreign traders shall be determined by law.
Article 38. Private Business
1/ Unless otherwise provided in the contract of
employment, commercial travelers and representatives
may not carry on similar private business for themselves and on behalf of third parties. Where they carry on private business, they shall lose their right to fees or compensation as provided in Article 40 and 41 of this Code.
2/ The provision of Article 29 Sub-Article (2) of this Code shall apply where commercial travelers and representatives have not been authorized to carry on private business.
Article 39. Acting on Behalf of Other Traders
1/ Unless otherwise agreed, commercial travelers and representatives may not act on behalf of traders other than the trader to whom they are bound, where they act on behalf of other traders, they shall lose their compensation as provided in Article 40 and 41 of this Code.
2/ In no case may they act on behalf of a trader selling goods or offering services similar to the goods sold or services offered by the trader to whom they are bound.
Article 40. Remuneration
1/ Commercial travelers and representatives may be paid by salary or on commission or both.
2/ The remuneration shall be fixed by the contract of employment or, where not fixed, by custom.
Article 41. Compensation in case of Termination of Contract
1/ Where the trader terminates the contract without good cause, commercial travelers and representatives who are bound by a contract entered into for an undefined period of time shall be entitled to compensation fixed in accordance with the relevant law.
2/ Where a contract entered into for an undefined or defined period of time is terminated by the trader for no fault attributable to the commercial traveler or representative, the commercial traveler or representative shall receive fair compensation which shall be fixed having regard to expansion of the trader’s market or the customers introduced by him and the like.
CHAPTER FOUR COMMERCIAL AGENTS
Article 42. Definition
1/ A Commercial Agent is a person or business organization, not bound to a trader by a contract of employment and carrying out independent activities, who is entrusted by a trader with representing him permanently in a specified area or to certain customers of the trader and dealing or making agreement in the name and on behalf of the trader.
2/ Unless otherwise provided in the agency agreement, contracts entered into by a commercial agent shall become effective without confirmation by the trader.
3/ A commercial agent normally acts as an agent and may act as a broker. He is a trader.
Article 43. Commercial Agent as an Exclusive Agent
Unless otherwise provided in the agency agreement, a commercial agent shall be the exclusive agent of the principal in the area specified in the agreement.
Article 44. Duties of Commercial Agent
1/ A commercial agent shall safeguard the principal’s interests with the care due by a good trader.
2/ He shall:
- carry out all instructions of the principal;
- inform the principal of all contracts concluded and under negotiation by him;
- send to the principal periodic reports on his activities and all such market information as may be useful to the principal regarding the area where he acts.
3/ Even after the agency agreement has come to an end, a commercial agent may not take advantage of or disclose trade secrets revealed to him by the principal or of which he learned in the course of his duties as an agent.
Article 45. Prohibition from Carrying on Similar Private Trade
1/ A commercial agent may carry on any private trade which is not similar to the trade carried on by the principal. The agency agreement may be cancelled
and damages may be due where the agent carries on trade similar to the trade carried on by the principal.
2/ Unless otherwise provided in the agency agreement, a commercial agent may act in the area specified in the agreement on behalf of other traders who work in areas not similar to the trade carried on by the principal.
3/ In no case may a commercial agent act, in the area specified in the agency agreement, on behalf of traders who carry on trade similar to the trade carried on by the principal. The agency agreement may be cancelled and damages may be due where the agent disregards this prohibition.
Article 46. Duties of Principal
The principal shall, to the best of his ability, enable his agent to carry out successfully his duties under the agency agreement, in particular by making all necessary information and samples available to him.
Article 47. Repayment of Expenses
Unless otherwise agreed, recurrent costs and expenses of the agency shall be borne by the commercial agent and
are not subject to repayment by the principal. The agent shall only be entitled to the repayment of expenses occasioned by dealings made on behalf of the principal and of such special expenses as were made by him on the order of the principal.
Article 48. Remuneration
1/ A commercial agent shall receive remuneration for all dealings negotiated or made by him; unless otherwise provided, he shall receive remuneration for all dealings made, in the area where he acts or the principal’s customers covered by the contract, either by the principal himself or by another agent of the principal.
2/ A commercial agent shall receive remuneration even where dealings made by him are not carried out by the principal; however, the agent shall lose his right to remuneration when dealings were not carried out by the principal because of the agent’s fault.
3/ The remuneration shall be fixed in the agency agreement or, where not fixed, by custom.
Article 49. Agent Personally to carry out his Duties
A Commercial Agent may not assign the agency agreement and may not substitute a third party for himself, as an agency agreement is made on the basis of the personal qualifications and capability of the agent.
Article 50. Termination of Agency Agreement
1/ An agency agreement shall terminate:
- where the period of time for which it was entered into expires;
- where the agent dies, becomes incapable or is declared bankrupt;
- where the business organization acting as agent is wound-up;
- In the absence of a contrary agreement, where the principal becomes bankrupt, incapable, dies or is declared absent.
2/ Either party to an agency agreement made for an undefined period of time may terminate it on notice. Notice need not be given where there is good cause for termination.
3/ The period of notice shall be fixed in the agency agreement or, where not so fixed, by custom. It shall not be less than one month during the first year of service and not less than two months after the first year.
Article 51. Compensation due in case of Termination
Where the principal terminates without good cause an agency agreement entered into for an undefined period of time, the agent shall receive fair compensation which shall be fixed having regard, in particular, to the time for which he acted on behalf of the principal, the customers introduced or goodwill created or extended by him.
Article 52. Uncompleted Business upon Termination
1/ Where an agency agreement terminates, the agent or his heirs or the business organization having acted as agent shall receive remuneration for all contracts negotiated or entered into prior to the termination of the agreement.
2/ Upon termination of the agreement, all remunerations and expenses due shall be paid forthwith by the principal.
Article 53. Prohibition from carrying on Similar Private Trade on Termination of the Agreement
1/ The agency agreement may provide that, upon termination of the agreement, the commercial agent shall not carry on similar trade as the principal or act as commercial agent or representative for a trader carrying on similar trade as the principal.
2/ Notwithstanding any provision to the contrary, any such prohibition shall not be effective for more than three years and unless it is made in writing, clearly specifies the area, clients of the principal, the goods and services as regards which the prohibition applies and adequate compensation is given to the agent.
CHAPTER FIVE COMMERCIAL BROKERS
Article 54. Definition
1/ A commercial broker is a person or business organization who, independently, professionally and for gain, brings parties together for the purpose of
their entering into an agreement such as a contract of sale, lease, insurance or carriage.
2/ A commercial broker is a trader, regardless of the parties he brings together and of the nature and object of the contract for the completion of which he acts as an intermediary.
3/ Unless specifically stated in the contract between the two parties, a commercial broker shall not receive remuneration on behalf of the parties or undertake any activity towards implementation of the contract between the two parties.
Article 55. Notice of Parties
1/ Unless customary or otherwise agreed, a commercial broker shall, where the parties have agreed to enter into a contract, inform both parties of the terms of the proposed contract.
2/ Unless customary or otherwise agreed, the proposed contract shall not become effective unless it is confirmed by both parties.
Article 56. Liability of Broker
A commercial broker shall be liable for any damage he causes to either party.
Article 57. Remuneration
1/ A commercial broker shall receive remuneration when the contract for the completion of which he acted as an intermediary is entered into, whether such contract is performed or not.
2/ Unless customary or otherwise agreed, the remuneration shall be paid only by the party having required the services of the broker.
3/ The remuneration shall be fixed in the agreement or, where not so fixed, by custom. The court may reduce the agreed remuneration where it appears excessive and disproportionate to the services rendered by the broker.
4/ A commercial broker shall lose his right to claim remuneration when he works for the benefit of a third contracting party in a manner contrary to his obligation towards his client and in particular in a manner prejudicial to the interests of his client or
when he received payments from a third contracting party without the knowledge of his client.