Agency agreement is one of the varieties of civil law agreements to which the agent and principal are parties. It allows you to regulate the implementation of certain actions, as a result of which the contractor receives a reward. This document has legal force when representing the interests of potential customers, for example, in government bodies. In the article we will talk directly about the essential conditions of the agency agreement, which must be present necessarily or only with the corresponding indication in the agreement.
General Provisions
The main conditions of the contract under consideration include the following:
- Thing. This is the execution by an agent of actions of a factual and legal nature.
- On whose behalf is the agent. Sometimes in one contract he acts both on his own behalf and on behalf of the principal (depending on the actions).
Thing
The subject as an essential condition of the agency contract includes services that the agent provides in the interests of the principal. Legal actions always have legal consequences in the form of the appearance, change and termination of the rights and obligations of a citizen. These include transactions. As a result of actual actions, these consequences do not appear. For example, an agent may be instructed to study the market to identify the most favorable transaction conditions for the principal, as well as search for customers, negotiating and more.
The subject is spoken at different levels of concretization. Agency actions may be indicated in the relevant contract by transfer. It is also intended to provide the agent with general information for the execution of agreements on behalf of the principal. The latter does not have the right to abandon the obligations arising from such transactions, unless he succeeds in proving that the counterparty was initially aware of the limitation of agent powers.
How does an agent work?
According to the contract of commission or commission, a document is drawn up and the essential conditions of the agency contract are provided. The SGA (Modern Humanitarian Academy) adhere to this point of view. In both cases, the agent must perform actions on behalf of and for the principal’s money. In the case of a commission agreement, the agent acts on his own behalf, and under the commission agreement, on behalf of the principal.
In the transaction, the agent acts on its own behalf, and then transfers the rights and obligations to the principal. In a transaction on behalf of the principal, the principal acts as a participant, and it is to him that the corresponding rights and obligations first belong. In this case, regardless of the agreement scheme, the agent’s actions may go beyond the scope of the order or commission, since the corresponding agreement may provide for much broader powers than those provided by them.
Other significant conditions
In addition to those specified in the agreement, other essential conditions of the agency agreement may also be prescribed. For example, this is the scope of authority.
Agent credentials are determined by a specific agreement by listing actions or in general terms by transferring authority to an agent to execute an agreement on behalf of the principal. In the latter case, the agent can carry out any transactions that the principal would have made, but within the framework of the concluded agreement.
The agreement must be in writing.
The principal, who transferred the general authority to the agent, will no longer be able to talk about their absence unless he proves that the third party knew about the relevant restrictions. In this case, the customer submits the necessary documents to the agent.
Price
The amount of the agency fee is not always an essential condition of the agency agreement. If this condition is not spelled out in it or the value cannot be established on the basis of its conditions, then the remuneration is paid in the amount determined in accordance with paragraph 3 of Article 424 of the Civil Code of the Russian Federation. The retribution of the contract itself is a prerequisite. Therefore, the principal must always pay a fee to the agent.
In addition, the costs incurred in fulfilling the agreement are payable. Other provisions may be contained in its provisions, for example, an advance payment, deductions of money received by a third party, and so on.
The principal must pay remuneration within 7 days from the date of submission of the report for the passed period, unless otherwise provided in the contract.
Term
This moment also does not apply to the essential condition of the agency contract. In the Civil Code this is stated in paragraph 3 of Article 1005. An agreement may be concluded for a different period. If it does not contain information about this, then it is considered to be concluded for an indefinite period of time. Moreover, any party has the right to refuse it at any time.
Limitations
The contract may not provide for any restrictions on the agent and the principal or have them. The principal’s limitations may include obligations not to sign agreements with similar content with other agents operating in the established territory. With respect to an agent, restrictions may relate to obligations not to sign with other principals the same agreements that must be performed on the same territory with the current agency agreement.
When determining the restrictions, the parties cannot establish specific instructions as essential conditions of the agency contract that affect the interests of others, for example, the sale of goods, the performance of work and services, including those that relate to the established territory. If they are contained in the contract, they are not executed, as they are considered void. This is stated in paragraph 3 of Art. 1007 Civil Code.
Reporting
The principal has the right to control the actions of the agent. This is done by reporting last. If this clause is prescribed, then the essential conditions of the agency agreement include reporting, and it is done in accordance with it. Otherwise, reports are provided as the agreement is executed or after its completion.
The report should indicate the agent’s actions aimed at fulfilling the terms of the contract, with the list of expenses incurred. In order to prevent litigation, it is recommended to provide for a special procedure for their compensation. If this is not done, then the general procedure applies, according to which the agent submits supporting documents with the amounts that have been produced.
The report is approved within a month after its submission, unless otherwise provided by the terms of the contract.
Termination
In ch. 29 of the Code provides general grounds for termination of the contract. They also apply to agency agreements. In addition, the norms provided for by the commission and the commission are also used.
Thus, the grounds for terminating the agreement include the following:
- The refusal of one party to fulfill the conditions if the period for the completion of the contract is not defined.
- The death or incapacity of the agent, or cases if he went missing.
- Bankruptcy Agent.
- Liquidation of the legal entity on behalf of which the agent acts. During the reorganization of a legal entity, the contract does not terminate, since the respective responsibilities are transferred to the assignee, and legal relations do not have to be confidential.
These grounds relate to changes in agent status. When the status of the principal changes, the contract continues to be valid, since the corresponding rights are transferred on the basis of succession. Such a section is an essential condition of an agency agreement to search for a real estate buyer, for example.
Conclusion
Agency contracts are relatively new to Russia. Therefore, for their conclusion, it is advisable to attract professional specialists. Only competent lawyers will be able to foresee all those essential conditions of the agency agreement under the Civil Code of the Russian Federation that are necessary in each specific case.
