Chapter 39
CONTRACT OF COMMISSION
- 692. Definition of contract of commission
(1) By a contract of commission, one person (the commission agent) undertakes to enter into a transaction in the commission agent’s own name and on account of another person (the principal), above all to sell an object belonging to the principal or buy an object for the principal (the commission object). The principal undertakes to pay the commission agent a fee (commission) therefor.
(2) The provisions regulating authorisation agreements apply to contracts of commission unless the provisions of this Chapter provide otherwise.
(3) The provisions of §§ 671, 672, 678, 681, 682 and 686 to 689 of this Act also apply to the relationship between a principal and a commission agent if the activity of the commission agent with respect to the principal is of a permanent nature.
- 693. Instructions of principal
(1) If a commission agent violates the obligation to adhere to instructions provided by the principal (§ 621 of this Act), the principal has the right to deem a transaction entered into by the commission agent not to have been entered into on account of the principal. In such case, the commission agent shall compensate for damage caused to the principal by the deviation from the instructions provided by the principal.
(2) If a commission agent has sold the commission object for a price lower than that prescribed by the principal or has exceeded the price prescribed to the commission agent for the purchase of the object and if the principal does not want the transaction to be deemed to have been entered into on the principal’s account, the principal shall inform the commission agent thereof immediately after having been notified of entry into the transaction. If the principal fails to perform the obligation to notify, the principal is deemed to have approved of the deviation from the prescribed price.
(3) If a commission agent has deviated from the price prescribed by the principal but offers, upon notification of entry into transaction, to offset the price difference, the principal does not have the right to deem the transaction not to have been entered into on the principal’s account. In such case, the principal still has the right to demand compensation for damage in the amount which exceeds the price difference.
- 694. Grant of credit by commission agent
(1) A commission agent does not have the right to make advance payments or grant credit to third parties on account of the principal without the consent of the principal. It is presumed that a commission agent does not have the right to extend deadlines for payment of the purchase price or the right to allow payment in instalments.
(2) If, upon the sale of a commission object, the commission agent grants credit to the purchaser or agrees to postpone the deadline for payment of the purchase price without the consent of the principal, the commission agent shall immediately pay the entire purchase price to the principal. If the purchase price would have been lower in the case of sale without granting credit, the commission agent is only required to pay the lower price.
- 695. Entry into contract on more favourable terms and conditions
If a commission agent enters into a contract on more favourable terms and conditions than the terms and conditions prescribed by the principal, the performance of the contract of commission shall be based on the more favourable terms and conditions.
- 696. Commission agent as seller or purchaser
(1) The commission agent may be the purchaser of the commission object to be sold by the commission agent or the seller of the commission object to be purchased by the commission agent only if a conflict of interests is precluded. The provisions of § 623 of this Act apply correspondingly.
(2) If a commission agent purchases the commission object to be sold by the commission agent or sells the commission object to be purchased by the commission agent, the commission agent has the right to the commission usually paid under similar circumstances and to the reimbursement of expenses usually incurred, as well as the rights provided in § 702 of this Act.
- 697. Commission agent as seller or purchaser on stock exchange or other regulated market
(1) If a commission object is sold or purchased on a stock exchange or another regulated market, the commission agent may be the purchaser of the object to be sold by the commission agent or the seller of the object to be purchased by the commission agent unless otherwise prescribed by the principal. If in such case the commission agent is the purchaser or seller of the commission object, the obligation of the commission agent to notify (subsection 624 (2) of this Act) shall be limited to certification provided by the commission agent to the principal with respect to adherence by the commission agent, upon the purchase or sale of the commission object, to the exchange or market price of the object at the time of entry into the transaction.
(2) Upon the sale or purchase of an object with a quoted exchange or market price, a commission agent who is the seller or purchaser of the object shall not set a more unfavourable price for the principal than the exchange or market price which has been set officially.
(3) If a commission agent, by acting with due diligence upon the performance of the obligations of the agent, could have purchased or sold the commission object at a more favourable price than the price specified in subsections (1) and (2) of this section, the commission agent shall set the more favourable price for the principal.
(4) Agreements which derogate from the provisions of subsections (1) to (3) of this section to the detriment of the principal are void.
- 698. Defective commission object
(1) If a commission agent is required to purchase an object for the principal, the commission agent shall perform all the obligations of a purchaser, including the obligation to examine the object and inform the seller of any deficiencies discovered.
(2) If a commission object delivered by the principal for sale by the commission agent is defective at the time of delivery and the deficiency can be detected by external examination of the object, the commission agent shall make sure that the object is preserved and that the existence of the defect can be certified and shall immediately inform the principal of the deficiency. If a commission object is damaged during carriage, the commission agent shall do everything in the agent’s power to prevent the loss of possible claims of the principal against the carrier. In the event of violation of such obligations, the commission agent shall reimburse the expenses caused thereby to the principal.
(3) If the commission object is highly perishable or rapid depreciation in the value of the object is to be anticipated and there is no time to obtain instructions from the principal or the principal delays the provision thereof, the commission agent has the right to sell the commission object on account of the principal pursuant to the provisions of section § 125 of this Act. The commission agent may be required to sell the commission object depending on the circumstances.
- 699. Liability of commission agent for commission object
(1) A commission agent shall be liable for the loss of and damage to a commission object delivered to the commission agent, unless the loss or damage did not occur due to the fault of the commission agent.
(2) A commission agent is required to insure a commission object only if so agreed or if the commission agent has been instructed to do so by the principal. A commission object shall be insured on account of the principal.
- 700. Liability of commission agent for obligations of third parties
(1) A commission agent shall be liable for the performance of obligations of a third party arising from a contract entered into by the commission agent on account of a principal if:
1) separately agreed in the contract of commission;
2) the liability arises from a local custom at the location of the activities of the commission agent acting for the purposes of the agent’s commercial or professional activities;
3) upon notification of entry into the transaction, the commission agent does not disclose the name of the third party with whom the agent enters into the transaction.
(2) In the case provided for in subsection (1) of this section, the commission agent shall be liable for the performance of the obligation of a third party in the same manner as the third party.
- 701. Commission
(1) If the amount of commission has not been agreed, it shall be deemed to be the standard amount of local commission or, in the absence thereof, a reasonable amount of remuneration. If, in the case specified in clauses 700 (1) 1) or 2) of this Act, a commission agent is liable for the performance of an obligation of a third party, the commission agent has the right to demand reasonable remuneration therefor (del credere commission).
(2) A commission agent has the right to demand payment of commission if a contract entered into on account of the principal was performed by a third party or if the contract was not performed due to circumstances dependent on the principal. A commission agent does not have the right to demand payment of commission if a contract was not performed for other reasons, although the commission agent may demand the reimbursement of expenses incurred in the course of performing the activities of the agent in an amount deemed to be reasonable under the circumstances.
- 702. Right of security of commission agent
(1) A commission agent has the right of security over a commission object in the agent’s possession, including if the possession arises from a bill of lading, warehouse receipt or other document granting the right of disposal, in order to secure the following claims:
1) a claim for reimbursement of expenses incurred on a commission object;
2) a claim for payment of commission;
3) a claim for compensation of advance payments made with the consent of the principal in order to acquire a commission object;
4) a claim for release from obligations assumed with respect to a commission object with the consent of the principal.
(2) A commission agent also has the right of security and rights arising therefrom if the commission object belongs to the agent or the agent is the purchaser or seller of the object.
(3) If the principal is declared bankrupt or enforcement proceedings are initiated against the principal, the commission agent has the right to satisfy the claims specified in subsection (1) of this section out of the money received upon performance of the contract of commission before the principal and the obligees thereof.