Financial Contracts

The financial contracts are agreements of indefinite time between two parties that aim at a stable and close cooperation regarding their participation in financial life. This kind of contracts provide the parties the ability to expand their business through the collaboration or/and to stabilize their existing network.

Manufacturers and suppliers of goods frequently appoint agents to act on their behalf in promoting sales, both in the home country of the manufacturer as well as overseas. The most basic type of financial contract is the commercial agency agreement. In this type of contract the commercial agent is a self–employed (independent) commercial intermediary. He/She undertakes the continuing obligation to negotiate the sale or the purchase of goods in the name and on behalf of the supplier, in exchange for a commission. In that way, the supplier expands his network of business and increases the product/services sales. The agent is benefited by the commissions and by his/her attachment to the network and the reputation of the supplier.

The most basic features of the commercial agent agreement is the fact that the agent is independent and can freely provide services/products, that he acts in the name of and on behalf of the supplier and that the supplier provides the agent the products/ services and the needed information. Commercial agency agreements are governed by the Presidential Decree 219/1991 (incorporating the EU Directive 86/653/EEC). The most important issues regulated by the Greek legal system are the rights and obligations of the contractual parties, the commission of the agent, the non-competition clauses, the termination of the agreement and the claim for compensation of the agent.

Introduction

The need for manufacturers – wholesalers (suppliers) to supply products en masse and to develop new markets, made it essential for them to collaborate with local associates (such as commercial agents – distributors). All the more since organizational and financial reasons require that suppliers are activated in those markets without actually setting up in the same. As a result, suppliers often expand their business and increase product sales with the assistance of local associates. The most wide spread forms of such cooperation are commercial agency, exclusive distribution and franchise agreements. The present will deal with commercial agency agreements in section I and distribution agreements in section II.

I. AGENCY AGREEMENT

What is an Agency Agreement?

An agency agreement is a service agreement concluded between the agent and the principal. Through the agency agreement the commercial agent as a self–employed (independent) commercial intermediary, undertakes (for a limited or indefinite term) the continuing obligation to negotiate the sale or the purchase of goods or even conclude such transactions in the name and on behalf of the principal, in exchange for a commission.

In which cases is an e-commence transaction governed by Greek law?

Regulation of e-commerce in Greek law derives from the application of European Union Directive on Ε-commerce 2000/31/EK as in force and effect. Due to the fact that this piece of legislation regulates certain parts only of the commercial relationship between seller of goods and/or services (supplier and/or service provider) and purchaser and/or user, all other aspects of this same commercial relationship are regulated by the provisions of the Greek Civil Code that provide for each particular type of contract (sale, services-work, leasing, etc.), as well as the legislation for protection of consumers (if not a ‘Business to Business’
transaction) and the legislation for manufacturer’s product liability.

It should be noted that, in case that a tortuous (potentially falling under the notion of malpractice) act or omission takes place, any penal liability is regulated by the provisions of Penal Code.

Whether Greek law is applicable in any given case or not, depends on whether the actual place (locus) of establishment of the supplier and/or service provider is located within Greece. In case the establishment of the supplier and/or service provider is not located within Greece, then applicable is the law of the place of establishment, except that mandatory provisions of Greek law, mainly covering consumers’ protection and public interest (including national financial stability for international transactions, money-laundering etc.) are always applicable, and supersede any different provisions of foreign law.