In Spain, commercial agency agreements are regulated by the Act on Agency Agreement 12/1992 of May 27 (hereinafter “the Agency Act” or “the Act”). The Act has been adopted following the European Directive 653/86/EC, became effective on January 1, 1994, and has been modified in several occasions in 2003 and 2011.
The Act contains special rules regarding goodwill (clientele), compensation for damages, termination, previous notice, remuneration, post-contractual and non-competition covenant, obligations of the parties... in terms similar to those of the EU Directive.
Its rules are mandatory, with the exception of those expressly mentioned in it, and are applicable to all kind of independent self-employed agents when no other specific disposition applies (art. 3.1).
The Act is not applicable to agents operating in stock exchange or regulated markets (art. 3.2) and, according to the Supreme Court, the Act is applicable to insurance agency agreements only in a residual way (see also the Royal Decree-Law 3/2020 of February 4 with some rules on Insurance intermediaries).
The activity carried out by employees acting as agents is regulated by Royal Decree 1438/1985 of August 1, and these relationships are affected by labour (not commercial) law. The consequences for these agents are, therefore, different.
The question of whether an Agent is considered “commercial” or “employee” is, therefore, crucial to determine the applicable law.
The first criterion is if the Agent accepts the risk for the operations in which he intervened. In this case, an agent will be a “commercial agent”.
But if the agent does not accept that risk (which is the most frequent situation) the second criterion consists in the determination if the agent is dependent or independent from the Principal. In the case of Agents who are entities, this question does not usually arise because companies cannot be employees (dependent agents).
But in the case of individual Agents, the question will be decided considering the higher or lower grade of independence from the Principal.
An Agent will be considered as “Commercial Agent” (and therefore submitted to the Agency Act) when he is independent, i.e. he is free to organise his activity and timetables according to his own criteria, with his own personnel and premises and his own administration. In return, an Agent will be considered a “Dependent Agent” (and submitted to labour law and particularly to the Royal Decree), when he acts according to the directions of the Principal (the Employer) who decides on the main questions of the Agent’s organization (timetable, itineraries, distribution criteria, how orders are managed…).
According to these principles, we consider quite improbable that a foreign Principal with no real possibility of having employees in Spain would appoint a dependent Agent. Therefore, any comments made in this Guide are referred to Commercial (independent) Agents and the Agency Act.