In Italy, commercial agency agreements are mainly regulated by Articles 1742 to 1753 of the Civil Code. These law rules have been repeatedly modified following the adoption of the European Directive 653/86/EC (See EU part of this Guide).
In addition to the Civil Code rules, Collective Bargaining Agreements (“Accordi Economici Collettivi”, or “AEC”) also contain important rules governing agency agreements.
AECs are agreements made on a regular basis between associations representing principals and agents in different sectors (for example manufacture, trade, and several others).
Most AECs are not laws, they are collective agreements which bind only those principals and agents who are part of those associations.
However, most of agency agreements between Italian principal and Italian agents are governed by AECs.
In general, AECs intend to implement the Civil Code rules and those of the Directive 653/86. However, contractual AECs often deviate from those rules, and some differences are substantial (see for example the rules on unilateral modifications of certain contract terms; termination notice periods; remuneration for the post-contractual non-competition covenant; termination indemnity).
This has caused issues of compliance with the Civil Code and the EC Directive which are still unresolved by the courts.
With particular regard to the contract termination indemnity, some rulings from the EU Court of Justice have established that the AEC regime is in conflict with the Directive, yet the Italian courts’ constant jurisprudence still keeps the AECs’ indemnity provisions in force.
It is commonly believed that AECs’ geographical scope of application is limited to the Italian territory. Therefore, they often apply to agency agreements which are governed by Italian law and are performed by the agent in Italy, when both parties or at least the principal are members of the associations stipulating the AECs.
In international agency agreements, AECs generally apply in limited circumstances, mainly when the parties expressly refer to them in the contract, or are de facto applied; to the latter case a foreign principal should pay special attention as it might lead to a “hidden” application of the AECs.
Although agency agreements are quite heavily regulated in Italy, there is certainly still room for the parties’ freedom in structuring the agreement properly and seeking to include clauses that protect them adequately. Yet, the complex Italian system needs to be taken into consideration in a careful drafting exercise.