INTERMEDIARIES OF COMMERCE
DEFINITION AND SCOPE
The commercial intermediary is the one who has the power to act, or intends to act, usually and professionally on behalf of another person, the principal, to conclude a sales contract of a commercial nature with a third party.
The trade intermediary is a trader; he must meet the conditions provided for in Articles 6 to 12 of this Uniform Act.
The conditions for access to the professions of commercial intermediaries may also be supplemented by conditions specific to each of the categories of intermediaries referred to in this Book.
It can be a natural person or a legal person.
The provisions of this Book govern not only the conclusion of contracts through the intermediary of commerce, but also any act performed by the latter with a view to this conclusion or relating to the performance of said contract.
They apply to all relationships between the principal, the intermediary, and the third party.
They apply whether the intermediary acts in his own name, such as the commission agent or broker, or on behalf of the principal, such as the commercial agent.
The provisions of this Book apply even if the principal, or the third party, has their establishments in States other than those signatory to this Uniform Act, therefore:
- a) that the intermediary is registered in the Trade and Personal Property Credit Register of one of the Contracting States, or,
- b) that the intermediary acts in the territory of one of the States Parties, or,
- c) that the rules of Private International Law lead to the application of this Uniform Act.
The provisions of this Book do not apply:
- a) representation resulting from a legal or judicial authorization to act for persons who do not have such legal capacity;
- b) representation by any person carrying out an auction, or by administrative or judicial authority;
- c) legal representation in the law of the Family, Matrimonial Regimes and Inheritance.
The manager, administrator or partner of a company, association or any other legal entity, whether or not it has legal personality, is not considered to be its intermediary, in the insofar as, in the exercise of his functions, he acts by virtue of powers conferred by the law or by the social acts of this entity.
ESTABLISHMENT AND SCOPE OF THE INTERMEDIARY’S POWERS
The rules of the mandate apply to relations between the intermediary, the principal and the third party, subject to the specific provisions of this Book.
The intermediary’s mandate can be written or verbal.
It is not subject to any formal requirement.
In the absence of a written document, it can be proved by any means, including by witness.
The principal and the intermediary on the one hand, and the intermediary and the garnishee on the other hand, are bound by the uses of which they had or should be aware, and which, in trade, are widely known and regularly observed by parties to representative relationships of the same type, in the commercial branch in question.
They are also bound by the practices they have established among themselves.
The scope of the intermediary’s mandate is determined by the nature of the business to which it relates, if a contract has not expressly fixed it.
In particular, the mandate includes the power to perform the legal acts necessitated by its execution.
However, the intermediary cannot, without special power, initiate legal proceedings, compromise, compromise, subscribe to exchange commitments, alienate or encumber buildings, or make a donation.
An intermediary who has received precise instructions may not deviate from them, except to establish that the circumstances did not allow him to seek the authorization of the principal, when there is reason to admit that the latter would have authorized had he been informed of the situation.
LEGAL EFFECTS OF ACTS COMPLETED THROUGH THE INTERMEDIARY
When the intermediary acts on behalf of the principal within the limits of his powers, and third parties knew or should have known his capacity as intermediary, his acts directly bind the principal to the third party, unless it results from the circumstances of the case, in particular by reference to a commission or brokerage contract, which the intermediary only intended to engage himself.
When the intermediary acts on behalf of a principal within the limits of his powers, his acts bind only the intermediary and the third party, if:
– the third party did not know or was not supposed to know the quality of the intermediary, or
– if the circumstances of the case, in particular by reference to a commission contract, show that the intermediary intended to engage only himself.
The liability of the intermediary is generally subject to the rules of the mandate.
The intermediary is thus responsible towards the principal for the good and faithful execution of the mandate.
He is bound to execute it personally, unless he is authorized to transfer it to a third party, if he is forced to do so by the circumstances, or if the use allows a substitution of powers.
When the intermediary acts without power, or beyond his power, his acts bind neither the principal nor the third party.
However, when the behavior of the principal leads the third party to believe, reasonably and in good faith, that the intermediary has the power to act on behalf of the principal, the latter cannot claim against the third party the lack of power. of the intermediary.
An act performed by an intermediary who acts without power, or beyond his power, can be ratified by the principal.
This act produces, if ratified, the same effects as if it had been performed by virtue of a power.
An intermediary who acts without power or beyond his power is required, in the absence of ratification, to compensate the third party in order to restore the latter to the situation which would have been his if the intermediary had acted in accordance with of a power and within the limits of that power.
However, the intermediary does not incur any liability if the third party knew or should have known that the intermediary had no power or acted beyond his power.
The principal must reimburse the intermediary, in principal and interest, the advances and costs that the latter has incurred for the proper execution of the mandate, and release him from the obligations contracted.
The intermediary is required, at the principal’s request, to report to him at all times on his management.
He owes interest on sums for which he is late, and compensation for damage caused by non-performance or poor performance of the mandate, unless he proves that this damage occurred without his fault.
TERMINATION OF THE INTERMEDIARY’S MANDATE
The intermediary’s mandate ceases:
– by agreement between the principal and the intermediary;
– by the full execution of the operation or operations for which the power has been conferred;
– by revocation at the initiative of the principal, or by renunciation of the intermediary.
However, a principal who improperly revokes the mandate entrusted to the intermediary must compensate him for the damage caused.
The intermediary who abusively renounces the execution of his mandate must compensate the principal for the damage caused.
The intermediary’s mandate also ceases, in the event of death, incapacity, or the opening of bankruptcy proceedings, whether these events concern the principal or the intermediary.
The termination of the mandate given to the intermediary has no effect with regard to the third party, unless he knew or should have known of this termination.
Notwithstanding the termination of the mandate, the intermediary remains authorized to perform on behalf of the principal or his beneficiaries the necessary and urgent acts likely to avoid any damage.
The commission agent, in matters of sale or purchase, is the one who undertakes to operate in his own name, but on behalf of the principal, the sale or purchase of goods for a commission.
The commission agent is obliged to carry out the transactions which are the subject of the commission contract in accordance with the instructions of the principal.
If the commission contract contains precise instructions, the commission agent must strictly comply with them, except where applicable, to initiate the termination if the nature of the mandate or the customs are opposed to these instructions.
If they are indicative instructions, the commission agent must act as if his own interests were at stake, and as close as possible to the instructions received.
If the instructions are optional, or if there are no specific instructions, the commission agent must act in the way that best serves the interests of the principal, and respects customary practice.
The commission agent must act loyally on behalf of the principal.
In particular, he cannot buy for his own account the goods he is responsible for selling, or sell his own goods to his principal.
The commission agent must give the principal any useful information relating to the transaction, subject of the commission, keep him informed of his actions, and report to him faithfully once the transaction has been carried out.
The principal is required to pay the commission agent a remuneration or commission, which is due as soon as the mandate is executed, whether the transaction is profitable or not.
The principal must reimburse the commission agent for the normal costs and disbursements incurred by the latter, provided that they were necessary, or simply useful for the operation, and that they are accompanied by supporting documents.
Any commission agent has, for all his claims against the principal, a right of retention on the goods which he holds.
When the goods dispatched in commission to be sold are in a manifestly defective condition, the commission agent must safeguard the rights of recourse against the carrier, have the damage noted, do his best to preserve the item and notify the principal without delay. .
Otherwise, he is liable for the damage caused by his negligence.
Where there is reason to fear that the goods dispatched on commission for sale will deteriorate promptly, and if the interest of the principal so requires, the commission agent has an obligation to have them sold.
The agent who has sold below the minimum price fixed by the principal is liable to him for the difference, unless he proves that by selling he has preserved the principal from damage, and that the circumstances have not affected him. not allowed to take his orders.
If he is at fault, he must also repair all the damage caused by the breach of the contract.
The commission agent who buys at a lower price, or who sells more expensive than the principal’s orders, cannot benefit from the difference.
The commission agent acts at his own risk if, without the consent of the principal, he grants a loan or an advance to a third party.
The commission agent is only liable for payment, or for the performance of other obligations incumbent on those with whom he has dealt, if he has acted as guarantor, or if such is the custom of the business in the place where he is established.
The commission agent who vouches for the one with whom he deals is entitled to an additional commission, known as delcroire.
The commission agent loses all rights to commission if he has been guilty of acts of bad faith towards the principal, in particular if he has indicated to the principal a price higher than that of the purchase or lower than that of the sale. .
In addition, in the latter two cases, the principal has the right to regard the commission agent himself as buyer or seller.
The forwarding agent, or transport agent who, in return for remuneration and in his own name, is responsible for dispatching or reshipping goods on behalf of his principal, is assimilated to the forwarding agent, but is nonetheless subject, in with regard to the transport of goods, to the provisions governing the contract of carriage.
The forwarding agent or transport agent is responsible in particular for the arrival of the goods within the time limits set, for damage and loss, except for acts of a third party or cases of force majeure.
The authorized customs broker is required to pay, on behalf of his client, the amount of duties, taxes or fines, liquidated by the Customs service.
The authorized customs broker who has paid for a third of the duties, taxes or fines collected by customs is subrogated to the customs duties.
The authorized customs broker is liable to his principal for any error in the declaration or application of customs tariffs, as well as for any damage that may result from the delay in the payment of duties, taxes or fines.
He is responsible to the Customs Administrations and the Treasury for customs operations carried out by him.
The broker is the one who usually makes a profession of bringing people together in order to facilitate, or bring about, the conclusion of agreements, operations or transactions between these people.
The broker is required to remain independent from the parties, and must limit his activities to bringing together people who wish to contract, and take all steps to facilitate the agreement between them.
He cannot therefore intervene personally in a transaction, except with the agreement of the parties.
The broker must:
– do everything that is useful to allow the conclusion of the contract,
– give the parties any useful information enabling them to deal with full knowledge of the facts.
If in order to induce a party to contract, the broker knowingly presents the other party as having capacities and qualities that it does not in reality have, he will be responsible for the damages resulting from his false declarations.
The broker may not carry out trading operations for his own account, either directly or indirectly, or even under the name of another or through an intermediary.
The broker’s remuneration is made up of a percentage of the amount of the transaction.
If the seller alone is the principal, the commission cannot be borne, even partially, by the buyer; it is therefore reduced from the normal price collected by the seller.
If the buyer is the sole principal, the commission will be borne by him, in addition to the price paid to the seller.
The broker is entitled to his remuneration as soon as the indication he has given, or the negotiations he has conducted, lead to the conclusion of the contract.
When the contract has been concluded under a suspensive condition, the broker’s remuneration is due only after the condition has been fulfilled.
If it has been agreed that the broker’s expenses will be reimbursed to him, they are due to him even when the contract has not been concluded.
Remuneration which is not determined by the parties is paid on the basis of the tariff, if any; in the absence of a tariff, the remuneration is fixed in accordance with custom.
In the absence of custom, the broker is entitled to remuneration which takes into account all the elements relating to the transaction.
The broker loses his right to remuneration and reimbursement of his expenses if he has acted in the interest of the third party contractor in disregard of his obligations towards his principal, or if he has been remitted without the latter’s knowledge, remuneration by the third party contractor.
The commercial agent is an agent, who as an independent profession, is permanently responsible for negotiating, and possibly concluding, contracts of sale, purchase, rental or provision of services, in the name and for the account of producers, industrialists, traders, or other commercial agents, without being bound to them by an employment contract.
The contracts concluded between the commercial agents and their principals are concluded in the common interest of the parties.
Relations between the commercial agent and the principal are governed by an obligation of loyalty and a reciprocal duty of information.
The commercial agent must carry out his mandate as a good professional; the principal must enable the commercial agent to carry out his mandate.
The commercial agent may accept without authorization, and unless otherwise agreed in writing, to represent other principals.
He cannot accept the representation of a company competing with that of one of his principals without the agreement of the latter.
The commercial agent may not, even after the end of the contract, use or reveal the information communicated to him by the principal on a confidential basis, or of which he became aware as such by reason of the contract.
When a ban on competition has been agreed between the commercial agent and his principal, the agent is entitled to a special indemnity upon expiry of the contract.
Any element of the remuneration that varies with the number or value of business constitutes a commission.
In the silence of the contract, the commercial agent is entitled to a commission in accordance with the practices practiced, in the sector of activities covered by his mandate.
In the absence of custom, the commercial agent is entitled to remuneration which takes into account all the elements relating to the operation.
The agent who has been granted exclusivity in a geographical sector, or on a specific group of clients, is entitled to a commission for any transaction concluded during the term of the agency contract.
For any commercial transaction concluded after the termination of the agency contract, the commercial agent is entitled to a commission when the transaction is mainly due to his activity during the agency contract, and was concluded within a reasonable period of time. from the termination of the contract.
Unless circumstances make it fair to share the commission between two or more sales agents, the sales agent is not entitled to a commission, if it is already due:
– to the agent who preceded him for a commercial transaction concluded before the entry into force of his agency contract;
– to the agent who succeeds him for a commercial transaction concluded after the termination of his agency contract.
The commission is acquired as soon as the principal has executed the transaction, or should have executed it under the agreement concluded with the third party, or even as soon as the third party has executed the transaction.
The commission is paid at the latest on the last day of the month following the quarter during which it was acquired, unless otherwise agreed by the parties.
The right to commission can only be extinguished if it is established that the contract between the third party and the principal will not be performed, and if this non-performance is not due to circumstances attributable to the principal.
Unless otherwise agreed or used, the commercial agent is not entitled to reimbursement of costs and disbursements resulting from the normal exercise of his activity, but only of those he has assumed by virtue of special instructions from the principal.
The reimbursement of costs and disbursements is due in this case, even if the transaction has not been concluded.
The agency contract concluded for a fixed period ends at the expiration of the stipulated term, without it being necessary to terminate it by any formality.
A fixed-term contract which continues to be performed by both parties after its term is deemed to have been transformed into a contract of indefinite duration.
When the contract is for an indefinite period, either party may terminate it by giving notice.
The notice period is one month for the first year of the contract, two months for the second year started, three months for the third year started and the following years.
Unless otherwise agreed, the end of the notice period coincides with the end of a calendar month.
In the case of a fixed-term contract transformed into a permanent contract, the period of notice is calculated from the start of the contractual relationship between the parties.
The parties cannot agree to shorter notice periods.
If they agree on longer periods, the notice periods must be the same for the principal and for the agent.
These provisions do not apply when the contract ends due to a serious fault of one of the parties, or the occurrence of a case of force majeure.
In the event of termination of his relationship with the principal, the commercial agent is entitled to compensatory indemnity, without prejudice to any damages.
The commercial agent loses the right to compensation if he has not notified the principal, by extrajudicial act, within one year of the termination of the contract, that he intends to assert his rights.
The beneficiaries of the commercial agent also benefit from the right to compensatory indemnity when the termination of the contract is due to the death of the agent.
The compensatory allowance provided for in the previous article is not due, in the event of:
1) of termination of the contract caused by the serious fault of the commercial agent, or
2) termination of the contract resulting from the agent’s initiative, unless this termination is justified by circumstances attributable to the principal, or due to the age, infirmity or illness of the commercial agent , and more generally, by any circumstances beyond the control of the agent as a result of which the pursuit of his activity can no longer be reasonably required, or
3) when in agreement with the principal, the commercial agent transfers to a third party the rights and obligations that he holds by virtue of the agency contract.
The compensatory allowance is equal to at least:
– one month’s commission from the first fully executed year of the contract;
– two months of commission from the second fully executed year of the contract;
– three months of commission from the third fully executed year of the contract.
The compensatory indemnity is freely fixed between the commercial agent and his principal for the part of seniority beyond the third full year of the contract.
The monthly payment to be taken into account for the calculation of the indemnity is that of the average of the last twelve months of execution of the mandate.
These provisions do not apply when the contract ends due to a serious fault of one of the parties, or the occurrence of a case of force majeure.
Any clause or agreement derogating to the detriment of the commercial agent from the provisions of Articles 196 to 199 above is deemed unwritten.
Each party is required to return at the end of the contract all that has been given to it for the duration of this contract, either by the other party, or by third parties on behalf of the other party, but this, without prejudice. for one or other of the parties of his right of retention.