The exclusivity clause in agency contracts in Spain
The exclusivity clause in agency contracts is not ruled under the Law on Agency Contracts in Spain (LAC), Law 12/1992, of May 27. This lack of regulation implies that, when two parties sign an agency contract, the existence of an exclusive relationship between them must be agreed in advance.
When agreeing on an exclusivity clause, it must be considered that it can be unilateral or reciprocal, in such a way that it can affect both parties, employer and agent, or only one of them. To avoid future problems, it is advised that this distinction is agreed upon between the parties, and that it is clearly expressed in the agency contract.
Also, it is important to remember that exclusivity can be negotiated on numerous issues. The most frequent areas in which an exclusivity clause is usually agreed are:
- A specific territory
- Specific products
- Specific customers to whom the agent will be directed
- In specific time frames
In order to avoid confusion in the future, it is advisable that the parties extend, in a concrete and specific way, the characteristics of the areas in which exclusivity intercedes.
In addition to the above, it must be considered that jurisprudential doctrine has recognised, on several occasions, the validity of the exclusivity agreement between the parties outside the written agency agreement, such as through verbal agreements, emails or acts that may indicate an exclusivity between the parties. By way of example, the Provincial Court of Guipúzcoa’s decision on January 19, 2005 (AC 2005/300) cites:
(…) The exclusivity characteristic of the agency contract subscribed to verbally by the litigating parties. The plaintiff considers that, of the evidence practiced in the instance, this exclusivity has been proven for the areas of the Basque Country, Navarre and La Rioja;
The exclusivity clause is a sensitive matter, especially for the employer. Failure to comply could result in some of the compensation provided to the LAC, to which the agent is entitled.
Finally, it should be noted that, due to the lack of explicit regulation of this matter within the LAC, it is crucial to conduct a good negotiation on a possible exclusivity agreement before signing the agency contract. This is important to the entrepreneur as to the agent.
Due to this, prior knowledge of the LAC in Spain and the sector in which it operates, as well as good legal advice, can be decisive when entering the negotiation phases of the exclusivity clause in agency contracts.
This article is not considered as legal advice