Commission Agreements in General

An agreement regarding commissioned work, referred to herein as a commission agreement, is often made to complement a power of attorney. For further information, see the Chapter Representation of a Company [Representation of a Company]. Common types of commission agreements include, for example, agency agreements, sales agent agreements, forwarding agreements and brokerage agreements. Among others, attorneys, accountants, auditors and various other agents operate often on the basis of a commission agreement.

Commission agreements are subject to provisions of the Commercial Code, which define a commissioned agent, or an agent, as “a person who, at someone’s request, agrees to perform and deliver something on behalf of the person making the request”. A commission agreement regards an intangible performance. Therefore, transfer of goods is not a deliverable of a commission agreement.

The agent is free to choose the method for fulfillment of the contract. The agent operates independently without being subjected to supervision and management of another person or entity and, accordingly, is not deemed to be an employee.

The principal often permits the agent to exercise wide discretion in carrying out the commissioned work. This means that trust and preservation thereof play a central role in commission agreements. This has been taken into account, among others, in the statutory provisions concerning commission agreements.