Obligations of Confidentiality and Non-Competition

It is prudent to place a confidentiality obligation on the agent in the agreement, according to which the agent may not disclose or use the principal’s information or industrial rights, both during the term of the agreement and thereafter. Use of information disclosed by the principal should be allowed for the purposes of the agreement only.

From the point of view of the principal, it is important to ensure that the agent focuses primarily on marketing of the contracted products. For this purpose, it is possible to include a non-competition obligation in the agreement, which prohibits the agent to represent or otherwise promote sales of competing products during the term of the agreement.

If the principal wants to prohibit the commercial agent from competing with the principal following expiry of the agency agreement, such prohibition shall:

• be set out in writing;

• expressly apply to the relevant territory and similar products, as those within the scope of the agency agreement;

• be valid for a maximum of two years following expiry of the agency agreement.

A contractual term, which provides for a non-competition obligation exceeding two years from the expiry of the agency agreement, is not binding on the agent after expiry of such two years.