In this post we’ll cover the basic of Italian law on the sales agency contract.

This information is mostly of interest to the foreign agents of Italian principals since the latter tend to choose their domestic law as the law of the contract.

That is not a bad thing since Italian law provides a fair protection for the agent’s rights.


Italian law defines the sales agent as the party that permanently assumes the task of promoting, on behalf of the principal, towards remuneration, the conclusion of contracts in a specific area.

This definition is quite important since, in international trade, is frequent that along with the appointment of promoting sales, the agent is granted distributorship or dealership rights or is appointed with other obligations such as storage or maintenance or repair of products, that are outside the boundaries of the proper sales agency contract.

Sales agency is indeed one of the so called named contracts. That is, a contract for which Italian law dictates a specific regulation.

That’s a special feature of Italian law, which operates by first bringing the actual case under the umbrella of the typical case defined by law and then applying to it the regulation of the legal type.  Within the law, we can distinguish two orders of rules: the ones the parties may derogate from, which apply only in the event of lack of contractual regulation, and those that cannot be derogated from, which are applicable and enforced even in the event of the contrary contractual will of the parties.

Since large parts of the law regulation of sales agency contract may not be derogated from, meaning  that they will be applied and enforced by Italian courts despite any contrary contractual will of the parties, it is of great importance to distinguish the authentic case of sales agency from other similar agreements.

Furthermore, between the International distribution contracts, sales agency is the only one for which Italian law provides with a legal type. Therefore it’s of the utmost importance to understand how to identify it among the neighbouring cases. 

For this purpose the decisive elements are:

1) Continue and not episodic business relationship. in case the business relationship is purely casual, the rules of the agency contract will not be applied. In this case we are facing the different figure of the business procurer who, without prejudice to a different contractual regulation, generally is not entitled to any claim under the mandatory Italian regulations referred to below in this article.

2) Carrying out the assignment in the exclusive interest of the principal. That requisite separates the sales agent from the broker, who intermediate the deal on behalf of both contracting parties and, therefore, can never be confused with the agent. 

3) Sales promotion as contract main obligation. The obligation to promote sales must prevail over all the other tasks that the principal has possibly entrusted to the agent with the contract, such as storage, repair or maintenance of products. In particular, in the case the agent buys from the principal in his own name to then sell the products directly to customers, it shall never be qualified as sales agent, but rather a dealer or distributor.   

If the actual agreement has these characteristics it can be construed as sales agency contract under Italian law and, therefore, access the corresponding mandatory regulation.

The following are the rights that Italian law acknowledges to a sales agent, notwithstanding any contrary clause or article of contract:

The right to obtain from the principal a copy of the contract in force between the parties, as well as any amendments subsequently made.

The nullity of any agreement that places on the agent a financial responsibility, even if partial, for the client’s failure to hold its end of the deal with the principal. It is, however, exceptionally permitted to agree the granting of a special guarantee by the agent, provided that this is done with reference to an individual deal. In this case, however, the agent’s liability shall not be higher than the amount of the sale commission he is entitled to, and must be compensated by an appropriate fee

Prohibition for the principal to ask the agent for the return of commissions collected, save for the following case: when it is certain that the contract between the client and the principal will not be executed for reasons not due to the principal’s conduct.

The principal, in dealing with the agent, must act with loyalty and good faith. He must make available to the agent the necessary documentation relating to the goods or services being dealt with and provide the agent with the information necessary for the performance of the contract: in particular, he must warn the agent, within a reasonable time, as soon as he anticipates that the volume of business transactions will be significantly less than the agent could normally have expected. The principal must also inform the agent, within a reasonable period of time, of the acceptance or rejection and non-performance of a deal procured for him.

The principal must deliver to the agent a detailed statement of commissions due at the latest on the last day of the month following the quarter during which they accrued. The statement shall indicate the essential elements on the basis of which the commissions have been calculated. The liquidated commissions shall be actually paid to the agent within the same term.

The agent has the right to receive all the information necessary to verify the amount of commissions paid and in particular an excerpt of principal’s accounting books.

In case of termination of the contract, both parties are entitled to a period of notice. The notice period shall not be less than one month for the first year of the contract duration at the time of termination, two months for the second year begun, three months for the third year begun, four months for the fourth year, five months for the fifth year, and six months for the sixth and all following years. Even if it is not directly said by law, the receding party, be it the principal or the agent, has the right to substitute the notice period paying the other part an indemnity of amount equal to the commissions that would have accrued in the period.   

Upon termination of the relationship, the principal shall pay the agent an indemnity if the following conditions are met: the agent has procured new clients for the principal or has significantly developed business with existing clients and the principal still receives substantial benefits from doing business with such clients; the payment of such indemnity is equitable, taking into account all the circumstances of the case, particularly the commissions that the agent loses and that result from doing business with such clients.

The indemnity is not due: (a) when the principal terminates the contract for a breach of contract attributable to the agent, which, due to its seriousness, does not allow the continuation, even provisional, of the relationship; (b) when the agent terminates the contract; (c) when, pursuant to an agreement with the principal, the agent assigns to a third party the rights and obligations he has under the agency contract.

The indemnity is still due, even if it is the agent to terminate the contract, if the termination is justified by circumstances: (a) attributable to the principal or; (b) by circumstances attributable to the agent, such as age, infirmity or illness, for which he can no longer reasonably be asked to continue the activity.

The amount of the indemnity shall not exceed the annual average of commissions collected by the agent over the last five years and, if the contract is less than five years old, the average of commissions for that period.

The agent has one year after the contract termination to claim the indemnity and loses any right to it If he makes the claim after the term expiration.