Commercial Agency Contracts in Italy

In Italy, commercial agency contracts are primarily governed by Articles 1742 to 1753 of the Civil Code. These legal provisions have been amended several times following the adoption of European Directive 653/86/EEC (see the EU section of this Guide).

In addition to the Civil Code rules, the Collective Economic Agreements ("Accordi Economici Collettivi" or "AEC") also contain important provisions governing agency contracts.

The AECs are agreements periodically signed between associations representing principals and agents in various sectors (such as industry, commerce, and many others).

Many of the AECs are not laws, but collective agreements that only bind principals and agents who are members of these associations.

However, most agency contracts between Italian principals and Italian agents are governed by the AECs.

In general, the AECs aim to implement the rules of the Civil Code and those of Directive 653/86. However, the AECs often deviate from these provisions and some differences are substantial (for example, the rules on unilateral changes to certain contractual clauses; notice periods for contract termination; remuneration for the post-contractual non-competition agreement; and the end-of-relationship indemnity).

This has caused issues of compliance with the Civil Code and the EC Directive that have not yet been resolved by the courts.

With particular regard to the end-of-relationship indemnity, some judgments of the Court of Justice of the European Union have established that the AEC regime is in conflict with the Directive, but the consistent case law of the Italian courts still maintains the provisions concerning the AEC indemnity in force.

It is generally agreed that the geographic scope of the AECs is limited to Italian territory. Therefore, they often apply to agency contracts governed by Italian law and performed by the agent in Italy, when both parties or at least the principal are members of the associations that sign the AECs.

In international agency contracts, the AECs generally apply in limited circumstances, especially when the parties make explicit reference to them in the contract, or when they are applied in practice; in the latter case, a foreign principal should pay particular attention as this could lead to a "hidden" application of the AECs.

Although agency contracts in Italy are subject to rather strict regulation, there is certainly still room for the parties to structure the contract appropriately and to seek to include clauses that adequately protect them. However, the complex Italian system must be carefully considered when drafting.

According to Italian law, an agent is a natural or legal person appointed to permanently promote the conclusion of contracts in a specific sector on behalf of another party (the principal) and is remunerated for this task.

Unless otherwise agreed, the agent has the right to exclusivity in the area for which he or she has been appointed (which is typically a geographic area, but could be a customer category and/or a range of products).

On the other hand, again unless otherwise agreed, an agent may not compete with the principal within the assigned area for the duration of the agency relationship. The non-competition agreement may be extended for a further period after the termination of the agency relationship, which cannot exceed two years. In such a case, the non-competition agreement is remunerated (see the answer to question no. 6 for more details).

An agent is an independent entrepreneur, and this feature distinguishes agents from employees appointed to promote sales in a specific sector on behalf of the employer.

An agent is tasked with carrying out a continuous and stable promotional activity. This feature of stable and continuous cooperation distinguishes agents from "occasional business finders" (“procacciatori d’affari”). The "procacciatore" is typically remunerated by the principal only for introducing him to another party for a single business deal, or in return for occasional, non-stable, or non-continuous intermediation activity.

While in theory the above distinctions seem quite simple, in practice it is often not easy to establish whether a particular relationship is between principal and agent, or between principal and occasional intermediary, or between employer and employee.

There have been many disputes on these topics, as qualifying a relationship one way or another can lead to very different consequences, especially when such a relationship ends. In qualifying the relationship from a legal point of view, courts will certainly check whether an adequate written contract has been signed (which unfortunately does not happen so often), as well as examine the specific circumstances of the individual case.

Influencers, in certain cases, can also be qualified as commercial agents. This was decided by the Court of Rome in a well-known 2024 judgment to which I dedicated a post, available at https://www.legalmondo.com/2024/06/italy-influencers-and-commercial-agents/

Distributors and agents are, in theory, very different. Generally, distributors purchase and resell the principal’s products or services in their own name and on their own behalf, in a specific area or country. Agents, on the other hand, procure sales contracts which are then concluded by the principal in their own name, or conclude—provided the agent is expressly authorized—sales contracts in the name and on behalf of the principal. Promotional and cooperation obligations, however, can be very similar.

It is worth noting that distribution contracts in Italy are not regulated by law, and courts so far have not, to our knowledge, extended to distributors the rules and protections that the law recognizes for commercial agents.

Mediators have some analogies with agents and occasional intermediaries, as mediators bring two parties together to conclude a single deal and are remunerated for this. However, the essential difference between the two is that a mediator—as established by Article 1754 of the Civil Code—is totally independent from both parties, whereas an occasional intermediary acts in the interest of the principal. Mediators, like agents but unlike occasional intermediaries, are professionals. Their activity is regulated by law and they are subject to registration and professional qualification obligations. In the absence of such registration, they are not entitled to commission.

Generally, under Italian law, contracts can be entered into in writing, orally, or even tacitly, by execution. However, pursuant to Article 1742 of the Civil Code, the agency contract must be proven in writing, and each party has the right to receive from the other a document, signed by the latter, containing the content of the contract and any additional clauses. This right cannot be waived.

Italian agents must be registered with Enasarco, a private law foundation that manages a supplementary pension fund for agents, and a severance indemnity fund, called "FIRR" (relating to severance pay calculated according to the criteria established by the collective agreements, AEC).

Whenever an agency contract is relevant to Enasarco, the principal must notify the Foundation that the agency contract has been signed, within 30 days from the date of the contract. In addition, contributions to the Enasarco funds must be paid regularly throughout the duration of the contract. Finally, the termination of the contract must also be communicated.

Enasarco will then pay the agent part of the severance indemnities provided for by the AEC, calculated on the contributions regularly paid during the relationship. The rest of the severance indemnities (if due) will be paid by the principal.

This registration obligation mainly concerns Italian agents of Italian and foreign principals. In some cases, however, it also concerns agents operating outside the Italian territory, especially when there are links with Italy (for example, according to the Italian Ministry of Labor, non-resident agents who have their main center of interest in Italy, and agents who habitually operate in Italy but carry out their activities abroad for no more than 24 months, must be registered with Enasarco).

Currently, Italian agents have registration obligations. Anyone wishing to start a commercial agency business in Italy must submit a "SCIA" (Certified Notice of Commencement of Activity) to the locally competent Chamber of Commerce. The Chamber of Commerce then registers the agent in the Company Register if the agent is organized as a commercial company, otherwise registers them in a special section of the "REA" (Economic and Administrative Register) of the same Chamber (see Legislative Decree No. 59 of 26.3.2010, implementing Directive 2006/123/EC "Services Directive").

Although the lack of registration does not invalidate the agency contract, it is still a mandatory requirement.

According to Italian law, the concept of "exclusivity" is linked to the "area" in which the agent is appointed to operate under the agency contract. An "area" may consist of a geographical territory and/or a category of customers or a specific sales channel and/or the type of products the agent is authorized to market.

Within this scope, the agent's right of exclusivity is provided by law, unless otherwise agreed. In particular, pursuant to Art. 1743 of the Civil Code, the principal cannot have more than one agent simultaneously for the same area and for the same activity.

Furthermore, Art. 1748 of the Civil Code gives the agent the right to a commission on business concluded by the principal with customers belonging to the area, or to the group or category of customers reserved for the agent, even when the transaction is concluded without the agent's involvement ("direct business"), unless otherwise agreed.

In any case, it is worth noting that Italian courts may consider continuous interference by the principal in the agent's territory as a breach of contract. Consequently, the principal should ensure that their direct transactions in the agent's territory are limited to occasional sales, paying commission to the agent on such sales.

An interesting issue may arise when the principal sells to customers in the agent's territory through third parties located in a different country (e.g., distributors, buying groups, subsidiaries, etc.) who purchase the products from the principal and resell them to customers in the agent's country.

By judgment of 17 January 2008 in case C-19/07, the EU Court of Justice held in a similar case that a commercial agent entrusted with a specific geographical area is not entitled to a commission for transactions concluded by customers belonging to that area without any action, direct or indirect, by the principal. The Italian Court of Cassation has confirmed the same principle on a couple of occasions. Therefore, to answer the question of whether the agent is entitled to a commission on transactions carried out by the principal through third parties, it appears necessary to assess on a case-by-case basis the role of the principal in the transaction.

The parties should consider including specific clauses in the agency contract to govern these matters.

Furthermore, appropriate clauses should be provided to govern the agent's right to be remunerated on transactions involving both their territory and other territories (e.g., orders from customers in the agent's territory for products to be delivered to different territories, or vice versa), considering that other agents in those different territories may have similar rights.

Regarding the principal's "exclusive" rights, Art. 1743 of the Civil Code provides that, unless otherwise agreed, the agent cannot agree to be appointed by more than one principal in competition with each other, in the same territory and for the same type of activity.

On the other hand, the agent may in principle represent more than one principal, provided they are not competitors. In any case, an agent may be bound to represent only one principal. The Collective Economic Agreements (AEC) specifically regulate this type of agent, providing them with more protective provisions (e.g., longer notice periods and higher amounts as severance pay).

The parties to an agency contract should therefore clearly specify the agent's limitations in representing third parties or in carrying out the activity themselves.

Given that agents are most often prohibited from representing competitors and engaging in competing activities, it is also advisable to define in the contract what is meant by "competing activity" to avoid misunderstandings. Indicating other companies that the agent represents—and can continue to represent—is also quite usual.

If the agent has the right of exclusivity over a given territory as provided by law and/or by contract, under Art. 1748 of the Civil Code, they can claim a commission on any and all sales that the principal makes to all customers located in that territory, provided, of course, that the customers and products fall within the scope of the agency contract.

No exception therefore appears to be made for online sales made by the principal directly to such customers, as the exclusivity applies regardless of the method of conclusion of the sales contract.

The contract may provide otherwise, provided it does so clearly and explicitly; otherwise—as we have seen—the agent's right of exclusivity is provided by law automatically.

In certain cases, principals may consider recognizing agents a commission on online sales, especially when there is a common interest in developing this sales method to increase business and/or when the agent still plays a role in online transactions (e.g., the agent may provide after-sales assistance, receive and handle customer complaints, etc.).

The most recent AEC for agents and representatives in the "Commerce" sector (signed on June 4, 2025) provides specific rules dedicated to the agent's rights on online sales made by the principal. The agent with exclusive rights for a given area is entitled to commissions even on sales made directly by the principal company through its website. In addition, commission statements must also include such sales.

Unlike the agent’s obligation not to compete with the principal throughout the term of the agency agreement - which is provided for by the law unless it is agreed otherwise - a similar undertaking needs to be expressly agreed upon in writing if it is to continue after the termination of the agency agreement.

Article 1751-bis of the Civil Code also sets forth the following further requirements (in addition to the written form) in order for such post-termination non-competition covenant to be valid:

• such covenant must be limited to the same territory, customers and type(s) of products or services which were the subject matter of the agency agreement; and
• the term of such covenant may not extend for more than two years following termination of the agency agreement;
• the principal must, on termination of the agency agreement, pay the agent a special indemnity in consideration for the non-compete undertaking. As the rule says, such indemnity is different by nature from the sale commission. This seems to mean the principal may not include the indemnity amount as part of the regular sales commissions.

According to article1751-bis, the indemnity mentioned in the foregoing paragraph must be commensurate with the duration and nature of the agency contract, and with the termination (goodwill) indemnity. The calculation of the indemnity should be agreed upon between the parties, taking the collective bargaining agreements into account. If the parties did not find any agreement, the court will determine the indemnity amount ex aequo et bono having regard to: 1) the average remuneration received by the agent during the term of the agreement, and the impact of such remuneration on the total agent’s income in the same period; 2) the reasons for the agreement termination; 3) the extent of the agent’s territory; 4) whether or not the agent was bound to represent only one principal.

The collective bargaining agreements set forth rules and criteria to calculate the post-termination non-competition covenant indemnity. It is important to note that the collective bargaining agreements do not provide for such indemnity to be paid to all agents but only to those established under certain legal forms (individuals, certain types of companies). It is also to bear in mind that collective agreements may be not applicable in many internationals agency contracts.

Considering all the above, whenever the parties agree on a post-termination non-competition covenant in an agency contract, they should draft the clause carefully keeping all the legal requirements into account, including how the indemnity should be calculated and paid.

Under Italian law, an agreement is deemed “international” in the presence of “situations involving a conflict of laws”. The situations which more often involve a conflict of laws in agency agreements– making them “international” - are (i) the principal’s seat being located in a country different from the agent’s seat; or (ii) the agreement being performed abroad, even when the principal’s and the agent’s seats are both located in the same country.

It is indeed possible for an international agency agreement to be governed by a law other than Italian law. First of all, this can be obtained by including a clear choice of law clause in a written agency agreement, having the effect of submitting the agreement to a foreign law. The conditions for the validity and effectiveness of a choice of law, as well as the limits of such a choice, are set forth in Article 3 of Regulation (EC) n.593/2008 (“Rome I” Regulation) (see EU part of this Guide).

A foreign law (i.e. a law other than Italian law) may govern an international agency agreement even in the absence of any choice of law, in particular, the law of the agent’s “habitual residence” (i.e. the place of central administration, or the principal place of business) shall apply pursuant to Article 4 of the Rome I Regulation (see EU part of this Guide).

An Italian principal should therefore be aware of this provision and, in order to avoid a foreign governing law in an agreement with a foreign agent, he should include in the agency agreement a clear choice of law clause stating that Italian law shall apply. Besides, to confirm the effectiveness of the above choice, it would be generally wise to couple such a provision with a clause stating that Italian courts have jurisdiction on any and all disputes. Conversely, a foreign principal in an agency agreement with an agent whose main place of business is in Italy, may wish to include proper choice of law and jurisdiction clauses if he wants to avoid Italian law to apply.

Choosing a foreign law (within the limits set forth by the Rome I Regulation) will necessarily exclude the application of the Italian Collective Bargaining Agreements (AEC).

Any disputes arising from an international agency agreement may be submitted to the jurisdiction of foreign judicial courts or foreign arbitrators.

This can be obtained through an agreement on jurisdiction. Art.25 of EU Regulation n.1215/2012 (“Brussels 1-bis” Regulation) allows for such agreement to be concluded in various manners (see EU part of this Guide).

However, the safest manner to agree on jurisdiction is to include a proper, clear choice of court clause in the agency agreement, specifying at least the country whose courts will have jurisdiction on any and all disputes arising from the agreement.

As regards the possible submission of disputes arising from an international agency agreement to foreign arbitrators, this is often possible as Italy is part of the most important international treaties on the recognition of arbitral awards (e.g. the New York Convention) and has its own civil procedural rules on international arbitration.

Therefore, it is generally possible to consider including a proper arbitration clause in an agency agreement.

However, in one case such a choice might prove ineffective. That is the case where an individual (or sole proprietorship) resident in Italy and with his main place of business in the same country is appointed as agent.

This is because disputes with individual Italian agents would fall into the exclusive competence of the labor courts (see Article 409 of the Civil Procedure Code).

It follows that agency relationships with individual agents in Italy are considered similar to employment matters and therefore an arbitration clause might be at risk of being judged ineffective as concerning a non-arbitrable matter. This however doesn’t seem to affect the validity of a choice of a foreign judicial court clause according to the Brussels 1-bis Regulation.

In the absence of any choice of a foreign judicial or arbitration court, the venue on disputes in an international agency agreement would be mainly regulated as follows.

Under Brussels 1-bis Regulation, and Italian private international law, as a general principle the defendant’s domicile forum has jurisdiction or, as an alternative to the “defendant’s forum”, Brussels 1-bis Regulation allows for litigation to be conducted before the “place of performance” courts (see EU part of this Guide).

Therefore, if an Italian principal wishes to submit all disputes with a foreign agent to Italian courts, or if a foreign principal wishes to submit the disputes to the principal’s courts, a proper choice of court/arbitration clause should be included in the agency agreement (taking into account any mandatory rules existing in the agent’s country).

The effectiveness of a choice of court clause is often to be evaluated in connection with the possibility to have the court judgment recognized and enforced in another country.

Agency agreements are meant to establish a standing and continuous co-operation between agent and principal.

Under Italian law, agency agreements may be entered into for a limited or an unlimited time. If a limited term is agreed, the agreement will expire and the relationship will naturally end on the expiration date as originally stipulated. Automatic renewal for further periods may apply only if expressly so agreed. Generally, an agency agreement for a limited term may not be terminated earlier unless in particular situations (for example, in case of substantial breach of contract).

If an agency agreement has no limited term, according to Article 1750 of the Italian Civil Code, either party may terminate it unilaterally at any time without cause, by prior notice from one to six months depending on the actual duration of the relationship when termination is notified.

Such notice period is: of one month, if termination is notified during the first year of the relationship; two months if notified during the second year; three months if notified during the third year; four months if notified during the fourth year; five months if notified during the fifth year; six months if notified during or after the sixth year.

It is worth noting that AECs provide for partially different (i.e. longer) notice terms. Therefore, it is important to ascertain whether or not AECs apply to a specific agency agreement.

Termination for breach is of course available. See the next paragraph for more details.

According to the general principles of Italian contract law (article1453 of the Civil Code) a party may obtain termination of the contract by court judgment, in case of breach of contract by the other party, provided the breach is of “no little importance” i.e. if the breach is material. In such cases, if the judge upholds the termination claim, he will declare the contract terminated by judgment.

Again according to the general contract law rules, a party may unilaterally terminate the contract without the need of court proceedings, in either of the following ways:

• by means of a formal notice to comply (art.1454 of the Civil Code), i.e. a formal communication whereby a party notifies the other of a material breach, warning that unless such breach is remedied within 15 days of receipt (unless a different deadline is agreed upon) the contract will immediately and automatically terminate by operation of law; or
• by means of an “express termination clause” (art.1456), i.e. a clause in the contract that specifies one or more contractual duties, whose breach entitles either or both parties to terminate the contract immediately without the need of a court judgment. When a party breaches any of the duties specified in the clause, the other party may notify immediate termination without notice. In principle, the party terminating the contract according to such clause need not prove that the breach was “material”, as it is supposed that the parties by including such breach in the express termination clause had mutually considered it to be material in any event.

The parties to an agency contract may avail themselves of any of the above termination rules.

In addition, courts often apply article 2119 of the Civil Code to the agency agreement, by analogy. This rule entitles either party in an employment agreement (employer or employee) to terminate the agreement immediately “by just cause”, i.e. a cause of such seriousness as not to allow the agreement to continue even on a temporary basis, being a material violation of the fiduciary relationship. A just cause may – but need not be a breach of contract by the other party: according to the case law, it may also be a conduct of the other party outside the agency agreement, having a negative influence on such party’s trustworthiness.

Here below are a few examples of breaches that courts often consider to be a justified reason for terminating the contract, by the principal or by the agent:

• breaches justifying termination by the principal: agent’s breach of the non-competition obligation, agent’s retention of money due to the principal, agent being completely inactive;
• breaches justifying termination by the agent: principal’s failure to pay commissions, principal’s breach of the agent’s exclusivity rights.

As regards the agent’s failure to meet certain results or sales targets, in principle an agent’s duty is to act professionally and endeavor to procure certain results to the principal, without however being liable if such results are not obtained, unless such an obligation (and the consequences of breaching it) are expressly agreed upon in a clear manner.

If the contract expressly entitles the principal to terminate the contract in case of failure by the agent to meet certain minimum sales targets, such a clause should in principle be deemed valid and enforceable.

However, some courts have established that, when a principal terminates the contract due to the agent’s failure to reach a sales target, despite such termination being expressly allowed for in the contract, the judge still has the power to assess whether the breach was so material as to justify immediate termination by the principal.

In view of the above, a principal should carefully assess all the circumstances before deciding whether to terminate the agreement when the agent fails to meet the agreed minimum targets: for example, the targets should be set reasonably, the reasons for such failures should be analyzed, it should be checked whether the diminution in sales only concerned that agent’s territory or other territories as well, whether the principal had tolerated previous similar breaches, etc..

In any event, it is always advisable to include in the contract in a clear and specific manner the breaches and other cases entitling a party to terminate the agreement, and the termination procedure.

If the principal terminates the contract due to a breach by the agent which is so serious as not to allow the contract to continue even temporarily, the agent is not entitled to the goodwill indemnity pursuant to art.1751 of the Civil Code.

Italian law entitles the agent to an indemnity if the agency agreement is terminated, according to Article 1751 of the Civil Code which implements Articles 17 and 18 of the EC Directive 86/653, particularly the so-called “German law type” of indemnity.

The indemnity is due to the agent if the following conditions are met:

• he has brought the principal new customers or has significantly increased the business with existing customers and the principal continues to derive substantial benefits from the business with such customers, and
• the payment of this indemnity is equitable in view of all the circumstances and, in particular, the commission lost by the commercial agent resulting from the business with such customers.

The amount of the indemnity may not exceed a figure equivalent to an indemnity for one year calculated from the commercial agent's average annual remuneration over the preceding five years and if the contract goes back less than five years the indemnity shall be calculated on the average for the period in question.

The indemnity or compensation referred to in Article 17 shall not be payable:

• where the principal has terminated the agency contract because of a default attributable to the commercial agent which is so substantial to prevent the relationship to continue even temporarily; or
• where the commercial agent has terminated the agency contract, unless such termination is justified by circumstances attributable to the principal or by circumstances attributable to the agent such as age, infirmity or illness in consequence of which he cannot reasonably be required to continue his activities; or in case of the agent’s death;
• where, with the agreement of the principal, the commercial agent assigns his rights and duties under the agency contract to a third party.

The grant of such an indemnity shall not prevent the commercial agent from seeking damages. In practice, the agent may claim damages in the event of the principal’s illegitimate termination or in the event of the agent’s termination due to the principal’s breach of contract.

The commercial agent shall lose his right to the indemnity, if he hasn’t notified the principal that he intends pursuing his entitlement within one year from the termination of the contract.

The parties may not derogate from the indemnity provisions to the detriment of the commercial agent, which means that a clause in the agency agreement denying in whole or in part the agent’s indemnity, would be invalid.

As said before, AECs also provide for various termination indemnities for commercial agents. Most of such indemnities are calculated as percentages of the total amount of commissions the agent has earned during the agency relationship, regardless of whether or not the agent has met the conditions set forth by Article 1751 of the Civil Code as described above.

Therefore, it can be surely said that such indemnities do not meet the requirements set forth by the EC Directive and the Civil Code. Following some EU Court of Justice rulings stating that such indemnities were in conflict with the Directive, the most recent AECs have only partially modified their indemnity system, introducing additional indemnity elements which in some way resemble the Directive principles.

Italian courts continuously state that the AECs indemnity system is valid (in cases where AECs apply) stating that the AEC regime is more favorable to agents as being a “minimum indemnity” system for those who do not meet the Civil Code requirements. In practice, the AEC indemnities will be granted to an agent unless he’s able to prove that by applying the Civil Code/Directive rules the would be entitled to a higher amount, in which case he will be granted such higher amount.

According to both the OECD double taxation treaty model and the Italian laws on income taxes, a commercial agent may be considered as a “permanent establishment” of a foreign company in Italy (namely, a “personal PE”) in certain cases.

Particularly, this may be the case when the agent is entrusted with the power to negotiate and conclude sale contracts in the foreign principal’s name and behalf, and exercises such power on a regular, continuous basis.

If a foreign company is considered to have a PE in Italy, then such foreign company is obliged to file an income tax return in Italy with respect to the income that has been produced in Italy, and pay taxes in Italy accordingly.

However, according to the same OECD and Italian law rules, there is no PE if the foreign company does business in Italy by means of a broker, a general commission agent, or other intermediary having an independent status and acting within the scope of their ordinary business.

The following criteria will help in assessing the independent status of an intermediary: the level of legal and business independency; the nature and extent of his duties; the instructions given and the degree of control exercised by the principal; the entrepreneurial risk.

There are many other important legal aspects to consider when appointing an agent in Italy. Only a few of them are mentioned here below.

Commissions are due when a sale contract is concluded, which means usually when the principal accepts the customer’s purchase order. The parties may however (and they often) derogate to such rule: for example, a principal may wish the agency agreement to state that commission’s right only accrues when the customer actually pays the purchase price.

An agent may not be generally held liable for the customers’ failure to pay, as the “star del credere” clause is no more allowed in Italy. It is merely possible for the agent to guarantee that the customer does not fail to pay with regard to individual business transactions of particular importance and such guarantee may not exceed an amount equal to the commission that would otherwise be due. Payment of commissions is due no later than within the strict time limits provided for by the Civil Code. The agent has strong inspection rights on the principal’s accounting books to verify the amount of commissions due to him. The agent may seek a court order if such inspection rights are denied.