We have already noted that an agency agreement is generally a professional relationship on both sides. In the previous instalment, we explained that an agent may nevertheless be a person who is not a business, provided they satisfy the independence requirement.
Here we focus on the principal. Can a principal who is not a business enter into an agency agreement?
👉 Yes and no. It will not be an agency agreement in the strict sense, but many agency provisions will apply.
🔴 Many, but not all. The following provisions will not apply:
1️⃣ The agent’s commission-based remuneration, including commission on contracts concluded after termination of the agency agreement (Articles 761–761² of the Civil Code).
NOTE: this does not mean there is no remuneration at all. Payment will be based on the agreement or the provisions governing contracts for services.
2️⃣ Commission settlement rules: the principal need not provide information about contracts concluded, and the agent has no statutory disclosure claim (Article 761⁵ of the Civil Code).
3️⃣ Indemnity: the agent cannot claim this payment after termination (Articles 764³–764⁵ of the Civil Code).
4️⃣ Contractual non-compete obligations: the Civil Code’s specific agency restrictions do not apply. Any non-compete obligation rests on freedom of contract and should also be assessed under competition law in each case (Articles 764⁶–764⁸ of the Civil Code).
