INTERNATIONAL COMMERCIAL AGENCY CONTRACT

1. Definition 2. Parties to the Contract 3. Main clauses 3.1 Exclusivity 3.2 Commitment not to compete 3.3 Obligation to inform 3.4 Agents Commission 3.5 Compensation for termination 4. Law applicable 5. Model Contract
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1. DEFINITION In this contract, one party (Principal) asks other party (Agent), either a person or a company to carry out the promotion of international trade transactions for a continuous period of time as an independent intermediary without assuming liability for those transactions. The intermediary receives payment exclusively through commission on transactions which are completed successfully, and in some cases certain costs may be taken into account, for example trips expenses or promotional activity.
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2. PARTIES TO THE CONTRACT The Principal is always a company but the Agent can be a company or a person (independent professional). For each party, the following has to be included: Name of company, full address and nationality. Company type: public limited company, limited liability company, etc. Name and position of company representative who signs the agreement. Name, profession, full address and nationality of person who acts as Agent. Tax ID number of both parties.
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3. MAIN CLAUSES AND SAMPLE Some of the most important clauses in the International Commercial Agency Contract are as follows: Exclusivity Commitment not to compete Obligation to inform Agents Commission Compensation for termination

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3.1 EXCLUSIVITY
Throughout the term of the present Contract, the Principal shall not grant sales rights for the Products within the Territory, to any third party. Nevertheless, the Principal shall be entitled to negotiate directly, without the Agent intermediating, with clients located in the Territory on condition that the Principal informs the Agent of such agreements. In such cases, the Agent shall be entitled to receive a reduced commission as set out in the Annexes, unless the Principal has reserved the right to negotiate exclusively with clients mentioned in the Annexes of the present Contract.

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3.2 COMMITMENT NOT TO COMPETE

Unless the Principal gives authorization to the contrary, the Agent shall not manufacture, distribute or represent any type of product which may compete directly with the Products. To this end, the Agent declares that on the date of signing the present Contract, it acts as agent or distributor for the organizations and products mentioned in the Annexes of the present Contract. The commitment not to compete shall be upheld throughout the term of the Contract and for a further .......... [1, 2, 3] years after its completion.

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3.3 OBLIGATION TO INFORM

The Agent shall keep the Principal duly informed as to market conditions, the competition and the legislation pertinent to the commercialization of the Products. Similarly, the Principal shall send the Agent a report every ........ [1, 2, 3] months regarding its activities and sales expectations. The Principal shall provide the Agent with all the information necessary regarding the Products (catalogs, technical specifications, user manuals, price lists, etc.). Similarly, the Principal shall inform the Agent immediately of any modification to prices, conditions of sale or payment.

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3.4 AGENTS COMMISSION

The Agent shall be entitled to a commission on Product sales transactions carried out with clients located within the Territory, throughout the term of the present Contract. Alternative A. The amount of commission shall be ......... % on the total value of sales. Alternative B. The amount of commission shall be established according to the volume of each sales transaction according to the provisions of the Annexes of the present Contract.

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3.5 COMPENSATION FOR TERMINATION

Alternative A. The Agent shall not be entitled to compensation for goodwill in case or termination of the present Contract. Nevertheless, the Agent may claim damages where the termination of the present Contract involves a serious breach of Contract by the Principal which is not foreseen in the present Contract. Alternative B. The Agent shall not be entitled to any compensation for goodwill or similar should the present Contract be terminated, except to the minimum extent that the governing law of this Contract provides for compensation.

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4. LAW APPLICABLE The Parties shall exercises their best efforts to resolve by negotiation any dispute, controversy o difference between them arising out or relating to this Contract. The parties are free to submit any conflicts regarding the agreement to International Arbitration or to the Laws of the country of one of the parties. The conflicts will normally be subject to the Courts of the country of the Principal and, specifically, to those of the town/city where it has its registered offices.
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5. MODEL CONTRACT

In order to obtain the model contract in Word format and the user guide, click on: International Commercial Agency Contract

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