In our previous post, we explained how the Civil Code regulates when an agent earns commission and when it must be paid. What if the parties wish to agree different deadlines?
✅ They may do so, but only within the limits laid down by law.
What does the law prohibit?
⚠️ The parties cannot validly provide that the agent earns commission later than:
➡️ the time when the customer performs their obligation;
➡️ the time when the customer would have been required to perform had the principal performed its own obligation.
⚠️ The due date cannot be changed to the agent’s disadvantage. The parties may therefore agree payment earlier than one month after the end of the quarter, but cannot agree later payment.
📌 Conclusions?
👉 The principal can protect its interests through a clause providing that the agent earns commission only when the customer performs, or when performance would have fallen due had the principal performed its own obligation.
Such a clause avoids the agent earning commission after the principal has performed but before the customer provides the corresponding performance.
👉 An agency agreement cannot provide for commission to be paid later or less frequently than quarterly, by the end of the month following the quarter. The parties may agree to settle commission more frequently or earlier than the last day of the following month.
❗ Such arrangements can benefit the principal because the due date is also the date from which the limitation period runs. Commission claims have a three-year limitation period ending on the last day of a calendar year. Scheduling payment for the entire final quarter after the New Year, even on 1 January, can extend that period by a full 365 days.
