Agency Contract in Romania
What is the agency contract and what does it require under the Romanian legislation?
The agency contract is governed by the provisions of the New Civil Code in Articles 2072-2095. These rules define the agency contract as being the empowerment granted by the agent to the agent in order to negotiate and conclude contracts in the name and on behalf of the principal in return for remuneration in one or more specified regions.
As far as the agent is concerned, he is considered to be an independent intermediary who carries out a professional activity and can not at the same time have the prepaid quality of the principal.
As a form, the agency contract is a consensual agreement as it will be concluded in a written, authentic or private signature, but in the absence of any legal provisions to the contrary, the written form will only be needed to prove the contract.
As a rule, the agency contract ends for a specified period. However, performance of the contract after the expiration of the period for which it was concluded will lead to its prolongation for an indefinite period.
Who can be an agent under an agency contract? Are there any limitations of this quality under the New Civil Code?
Yes, there are some limitations on who can be an agent, so the following categories of people will not be able to qualify:
▪ the person who represents a legal or statutory body of a legal person with the right to represent the latter;
▪ the person who is a shareholder or associate and is legally empowered to represent the other shareholders or associates;
▪ the person who holds the status of judicial administrator, tutor, curator, liquidator, custodian or administrator-seizure of the principal.
What does exclusivity and non-competition clause mean in the agency contract?
Exclusivity refers to the agent's inability to negotiate or conclude contracts with respect to goods and services similar to those which are the object of the agency contract in the region established by this contract, without the consent of the principal.
While the principal may contract with more agents in the same region and for the same time contracts unless otherwise stipulated, the agent may not represent more than one agent for the same region and for the same type of contract unless it is stipulated in a way express contract.
The non-competition clause is a contractual stipulation restricting the professional activity of the agent during the agency contract or after termination of the contract for a period of maximum 2 years. This clause will not be effective and will be absolutely null in the absence of its writing in writing.
The non-competition clause will look at the geographic region and / or the group of people covered by the agency contract and the strictly the services and assets in respect of which the agent has been empowered to negotiate and conclude contracts.
What are the obligations of the parties to an agency contract?
As in any sinalagmatic contract, both parties have their rights and obligations.
Thus, the agent has the obligations to: either carry out in person or through prudence, in good faith and loyalty, the obligations arising from the contract, to obtain and to communicate the information relevant to the principal, to submit the necessary diligence for the negotiation and conclusion of the contracts who have been given the power of attorney, to observe the instructions received from the principal, to keep records of the concluded contracts and to store the goods in a manner that allows them to be identified.
Equally, the principal, in addition to the obligation to act loyally and in good faith, has the following obligations to the agent: to provide the agent with the materials necessary to execute the empowerment, to provide him with the information needed to execute the agency contract, to notify the agent of the lower volume of contracts than the latter's expectations, to pay the agent as set out in the contract and to inform the agent of the acceptance, non-execution or refusal of a contract negotiated or terminated by the agent.
What are the ways the agency contract can be terminated?
The agency contract may terminate by: the expiration of the term for which it was terminated, when the parties no longer continue to execute the contract after this deadline, unilateral denunciation by either party, subject to mandatory notice (exceptionally, unilateral denunciation observance of the notice in exceptional circumstances that prevents a continuation of the collaboration between the principal and the agent), but also by termination of the contract when one of the parties fails to fulfill its contractual obligations due to serious misconduct.
If you wish to conclude an agency contract, either as a principal or as an agent, do not hesitate to contact the lawyer's team at Darie, Manea & Associates who will provide you with legal assistance, complete and correct information and representation before competent authorities, when appropriate.