International Business

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International Business

International Business

Question 1:

In France? pursuant to Law No. 91-593 of 25 June 1991? and in probably most of the other countries forming the European Economic Union (including the UK and Germany)? there are national laws which protect a commercial agent in the event that its principal terminates the "commercial agency" relationship. (One of the reasons why such laws exist so widely in Europe is the fact that there is an EEC Directive No. 86/653 from 1986 which directs the national governments of the member countries to enact such legislation.)

The relevant provision of French Law No. 91-593 reads as follows:

"Article 12. The commercial agent is entitled to receive a compensatory indemnity to cover his losses? if the relationship with the principal ends."

In France? this provision is one of "public policy" ("ordre public") and it may not easily be abrogated by contract.

The law in question does provide a number of exceptions to the above compensation rule? including the following:

material breach of its duties by the agent?

the agent freely decides to terminate the relation-ship.

In application of such statute? French case law often sets the indemnity at an amount approximately equal to two times the annual commissions earned by the agent.

In addition? the French case law has extended the indemnity right of "commercial agents" to certain "distributors" when the two parties are deemed to share a common economic interest ("intérêt commun")? a somewhat nebulous concept about which the case law will continue to evolve. This extension of the application of the statute to certain distributor agreements is effected by judicial "réqualification" of the contract. Where a principal simply sells merchandise to the distributor and exercises no real control over the conduct of the distributor? the relationship may well fall outside the scope of that of a common economic interest. But? in the complex world of today? the work of the principal and the distributor often becomes more like a joint-venture and this close relationship can give rise to the above-mentioned right of indemnity. In the United States? the parties bargain for a right of indemnity? but if an agent waives this right? an American court? applying the law of an American state? would not seek to change the economic deal negotiated? if both parties were American and the United States was the place of performance. Certain American principals are aware of this European situation and have tried to circumvent the European indemnity provisions. Their American legal counsels have used both imagination and legal skill? but they have also? at times? made mistakes which rendered their contract provisions less effective than they might be otherwise.


Question 2:

This principle short has been in writing in the context of the demand of evolving nations? encompassing India? in the on-going Doha around of WTO discussions for principle space inside which defend the livelihood security of their little and marginal farmers. It values Mexican agriculture's integration know-how under FAUCHON to set up that evolving homeland claims are justified. It indicates that regardless of the profits ...
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