Commercial Distribution and Business Agency Contracts

Commercial Distribution and Licensing Agreements

Obligations of the Licensee

• Buying a specific quantity of products from the grantor for a period of time.
• Complying with certain rules and safeguards regarding after-sales service.
• An obligation imposed on the commission brand.
• It is prohibited to set resale prices for third parties.

Obligations of the Client

• Commission sale or supply of products in agreed terms.
• Exclusivity clauses for which the principal cannot sell their products directly or through another dealer.

Franchise Agreements

4. Franchise. A contract whereby a person (the franchisor) agrees to convey to another (the franchisee) specific technical or business knowledge ("Know-how") for your business.

Franchisor's Obligations

• To enable the franchisee to use their signs and distinctive marks.
• To provide technical assistance.
• To supply products to the franchisee.
• To promote and publicize the services or products of the franchise.

Obligations of the Franchisee

• To pay the franchisor compensation consisting of an entry fee and regular amounts.
• To maintain an adequate stock of products.
• To observe the instructions of the franchisor.
• To report on the market situation and the progress of the business.

Agency Contracts

5. Agency contract. A contract whereby a person (the agent) is obligated to another in a stable and continuous exchange for a fee, performing acts or operations to promote trade as an independent intermediary and not assuming, unless otherwise agreed, the risk of such operations.

Characteristics of the Agency Contract

• Duration: Permanent.
• Organization: Must allow the agent to organize their business activities.
• Risk: The agent does not assume the risk of contracting operations.
• Nature: It is a bilateral contract, not free, consensual, and non-formal.

Obligations of the Agent

• Should not remain passive.
• Must be loyal and protect the interests of the principal employer.
• Must not compete with the main contractor.

Obligations of the Employer

• To facilitate the development of the agent's activity.
• To provide information that will be necessary.
• To pay the agreed remuneration as a commission.

Extinction of the Contract

• If it is not indefinite, when the agreed time expires.
• If it is indefinite, either party can terminate at any moment.
• Mutual agreement.
• The agent's death (not so with the employer).

Mediation and Brokerage

6. Mediation or brokerage contract: A contract by which a person (a mediator or broker) agrees to promote or facilitate the holding of a particular contract in exchange for payment. The mediator is simply to connect the two parties without participating in the contract and without being tied to any party.

Factoring Services

7. Factoring: A contract by which a company (the factor or factoring company) is obligated to an employer to manage the collection of all the credits that the employer has against third parties, besides performing other services: client selection, employer accounting, etc.