(Denmark) Act on Commercial Agents and Travellers
(Act no. 272 of 2 May 1990)
WE MARGRETHE THE SECOND, by the Grace of God Queen of Denmark, do make known that:
The Danish Folketing has passed the following Act which has received the Royal Assent:
Part 1 The possibilities of derogation from the Act1(1) The provisions of this Act can be derogated from upon agreement unless otherwise specified in the Act. In addition, the provisions of Part 3 can be derogated from according to custom.
1(2) The provisions of ss. 22 and 25-27 which cannot be derogated from to the detriment of the commercial agent can neither in the case of a governing law agreement be derogated from to the detriment of the agent if the relationship without this governing law agreement were governed by this Act.
1(3) Where Danish law shall apply to cases where the commercial agent?s activities on behalf of the principal under the agreement shall not take place in a country which is a member of the EEC or EFTA or in one of the Nordic countries, the parties can derogate from all provisions of this Act. However, ss. 22 and 25-27 cannot be derogated from in cases where mandatory rules on termination and indemnity apply in the country where the commercial agent?s activities shall be carried out or where the commercial agent is resident.
Part 2 Commercial Agents2(1) For the purposes of this Act, commercial agent shall mean a self-employed person who against payment has assumed a continuing activity to negotiate the sale or purchase of goods on behalf of another person (the principal) and for this person?s account by obtaining offers (orders) for the principal or by entering into agreements to this effect in his name.
3(1) The principal and the commercial agent shall be entitled to receive from the other party a signed document setting out the terms of the agency agreement, including any terms subsequently agreed.
3(2) (1) cannot be derogated from by agreement.
4(1) In performing his activities the commercial agent must look after his principal?s interests and act dutifully and in good faith.
4(2) In particular, the commercial agent must:
1) make proper efforts to collect offers and where authorised conclude agreements concerning the transactions comprised by the agency.
2) 3) communicate to the principal offers collected or agreements concluded and other matters of which the commercial agent has obtained knowledge of which the principal should know, and
4) 5) comply with reasonable instructions given by the principal
6) 4(3) (1) and (2) cannot be derogated from by agreement.
5(1) In his relations with the commercial agent the principal must act dutifully and in good faith.
5(2) The principal must in particular:
1) provide his commercial agent with the necessary documentation relating to the goods concerned,
2) 3) obtain for his commercial agent the information necessary for the performance of the activities, and
4) 5) notify the commercial agent within a reasonable period of the acceptance or refusal of offers which the commercial agent has procured and of any non-execution of an agreement which the commercial agent has brought about.
6) 5(3) Where the principal anticipates that the volume of commercial transactions will be significantly lower than that which the commercial agent could normally have expected, the principal must notify the commercial agent within a reasonable period to this effect.
5(4) (1-3) cannot be derogated from by agreement.
6(1) If the commercial agent or the principal fails to meet his liabilities to the other party, this party shall have the right to claim compensation for the loss suffered in consequence hereof.
6(2) The party who wishes to claim compensation shall notify the other party to this effect without undue delay after said party obtained or ought to have obtained knowledge of the negligence and loss. If he fails to do so, the right to claim compensation will be forfeited.
6(3) S. 6(2) shall not apply where the other party has acted contrary to common decency or with gross negligence.
7(1) If the commercial agent has goods in stock to be sold on behalf of the principal or which have been bought on behalf of the principal, the commercial agent shall have the same rights and obligations in respect of the goods as those of a commission agent under part 11 of the Act on Commission.
Commission8(1) In the absence of any agreement on the level of remuneration, the commercial agent shall be entitled to the remuneration that commercial agents appointed for the goods forming the subject of his agency contract are customarily allowed in the place where he carries on his activities. If there is no such customary practice, the commercial agent shall be entitled to reasonable remuneration taking into account all the aspects of the transaction.
9(1) The commercial agent shall be entitled to commission on agreements concluded during the period covered by the agency contract where:
1) the agreement has been concluded as a result of his action;
2) 3) the agreement without the collaboration of the commercial agent is concluded with a third party whom the commercial agent has previously acquired as a customer for agreements of the same kind; or
4) 5) the commercial agent has been entrusted with a specific geographic area or group of customers and the agreement without the collaboration of the commercial agent is entered into with a third party belonging to that area or group of customers.
6) 10(1) If the agreement is entered into in circumstances as those specified in s. 9(1-3) after the agency contract has terminated, the commercial agent shall be entitled to commission if the offer of the third party reached the commercial agent or the principal before the agency contract terminated.
10(2) The commercial agent shall, in addition, be entitled to commission if the agreement is mainly attributable to the commercial agent?s efforts during the period covered by the agency contract and if the agreement was entered into within a reasonable period after that contract terminated.
10(3) A commercial agent shall not be entitled to commission on an agreement pursuant to s. 9 if that commission is payable pursuant to (1) and (2) to the previous agent unless it is equitable because of the circumstances for the commission to be shared between the commercial agents.
11(1) The commission shall become due as soon as and to the extent that one of the following circumstances obtains:
1) The principal has or should according to his agreement with the third party have delivered the goods or paid the purchase price.
2) 3) The third party has paid the purchase price or delivered the goods or should have done so according to his agreement with the principal if the principal had executed his part of the agreement.
4) 11(2) An agreement according to which the commission shall fall due later than what is laid down in (1) no. 2 shall not be valid.
12(1) The commission shall be paid not later than on the last day of the month following the quarter in which it became due, cf. s. 11.
12(2) Subsection 1 cannot be derogated from by prior agreement to the detriment of the commercial agent.
13(1) The principal shall supply his commercial agent with a statement of the commission due in the quarter, not later than the last day of the month following the quarter in which the commission has become due, cf. s. 11. This statement shall set out the main components used in calculating the amount of commission.
13(2) (1) cannot be derogated from by prior agreement to the detriment of the commercial agent.
14(1) The commercial agent?s right to commission can be extinguished only if and to the extent that it is established that the agreement between the principal and the third party will not be executed and that this is due to a reason for which the principal is not to blame.
14(2) The commercial agent?s right to commission shall not be affected if the third party?s non-performance of the agreement is due to the fact that the principal without the commercial agent?s consent has granted an extension of the time for performance of the agreement to the third party or has reached an understanding on the cancellation of such agreement.
14(3) If the obligation of the third party under the agreement is only partly met, the commercial agent shall only be entitled to commission on the part which has been met unless otherwise follows from (1) and (2).
14(4) (1-3) cannot be derogated from by prior agreement to the detriment of the commercial agent.
14(5) If the right to commission under (1) is extinguished, the commercial agent shall refund any commission received.
15(1) The commercial agent shall be entitled to demand that he be provided with all the information, including extracts from accounting records, which is available to his principal and which he needs in order to check whether the commission statement shows the amount of the commission due to him.
15(2) If the principal refuses to provide the information stated in (1) or if the commercial agent has reason to doubt the correctness of the information or of the commission statement, the commercial agent shall be entitled to demand that the principal at his own option grants access for the commercial agent or a state-authorised or registered public accountant appointed by the commercial agent to examine extracts from the principal?s accounting records.
15(3) The duty to inform under (1) and (2) shall not apply if information would be disclosed which the principal would be privileged to refuse to disclose as a witness, cf. s. 171 of the Administration of Justice Act.
15(4) (1) and (2) cannot be derogated from by agreement to the detriment of the commercial agent.
Relations to third parties16(1) The commercial agent cannot without authority from the principal conclude agreements that are binding on the principal.
16(2) If the commercial agent without authority has concluded an agreement which the principal cannot accept, the principal shall communicate this to the third party without undue delay after having been notified of the agreement. If the principal fails to so, he is bound by the agreement if the third party at the conclusion of the agreement acted in good faith as concerns the authority of the commercial agent.
17(1) If the principal refuses to accept an offer received by the commercial agent, the principal shall communicate this to the third party without undue delay after having received the offer or been notified hereof. If the principal fails to do so, the offer shall be considered accepted.
17(2) (1) shall not apply if the commercial agent and the third party have agreed that the offer must be expressly accepted by the principal.
18(1) If the third party has made an offer to the commercial agent and if the commercial agent has forwarded the offer to the principal, the offeror can revoke the offer before the principal gains knowledge of the offer or simultaneously hereto.
18(2) (1) shall not apply if the commercial agent and the third party have agreed otherwise.
19(1) A third party who has a business relationship with the principal and who upon negotiations with the commercial agent receives information from the principal that the principal accepts an agreement or an offer the commercial agent has forwarded, the third party shall without undue delay communicate to the principal if the third party will maintain that no agreement has been concluded or no offer made or that the agreement or offer has been incorrectly represented. If the third party fails to communicate this, an agreement with the content specified in the information from the principal, shall be considered to have been concluded, unless the opposite is established.
20(1) The commercial agent cannot without separate authority to this effect receive payment for goods sold or grant an extension of the time for payment or a reduction in the price or make other changes to the agreement.
20(2) If the principal has received information that the commercial agent without authority has received payment or made changes to the agreement without authority, the principal shall if he cannot accept the payment or the change communicate this to the buyer without undue delay. If the principal fails to do so, the payment or change shall be considered accepted if the third party at the time of the payment or the change to the agreement acted in good faith as concerns the commercial agent?s authority.
20(3) (1) and (2) shall apply correspondingly where the agreement with the third party concerns the purchase of goods on behalf of the principal.
21(1) If the buyer wants to give notice of defective goods or that the delivery of the goods was late or if the buyer in any other respect wants to complain to the principal, communication to this effect can be directed to the commercial agent if the commercial agent has been instrumental in the conclusion of the agreement. The commercial agent cannot without separate authority to this effect make decisions on the occasion of such communication.
21(2) (1) shall apply correspondingly where the agreement with a third party concerns the purchase of goods on behalf of the principal.
Termination of the agency agreement22(1) Where an agency agreement is concluded for an indefinite period, the principal and the commercial agent may terminate the agreement giving one month?s notice during the first year of the term of the agreement. The period of notice shall be extended by 1 month for each year or fraction of a year for which the agreement has existed. However, the notice shall not exceed 6 months unless it is agreed otherwise.
22(2) Periods of notice shorter than those specified in (1) may not be agreed upon by prior agreement. However, it may be agreed that the commercial agent may terminate the agreement giving 3 months? notice even where the agreement has existed for 3 years or more.
22(3) If the parties agree on periods of notice longer than those specified in (1), the period of notice shall not be shorter when given by the principal than when given by the commercial agent.
22(4) Unless agreed otherwise, the end of the period of notice must coincide with the end of a calendar month.
23(1) To an agency agreement for a fixed period which continues to be performed by both parties after that period has expired s. 22 shall apply correspondingly. When calculating the periods of notice stipulated in s. 22(1) the fixed term of the agreement shall be included.
24(1) Each party shall be entitled to terminate the agreement without observing the period of notice applicable if the other party to a considerable extent has failed to perform his obligations under the agreement or the Act.
Indemnity on termination25(1) On termination of the agency agreement the commercial agent shall be entitled to an indemnity if and to the extent
1) commercial agent has brought the principal new customers or has significantly increased the volume of business with existing customers and the principal continues to derive substantial benefits from the business with such customers, and
2) 3) the payment of this indemnity in equitable having regard to all the circumstances and, in particular, the commission lost be the commercial agent on the business transacted with such customers.
4) 25(2) (1) shall apply correspondingly where the agency agreement is terminated as a result of the commercial agent?s death.
26(1) The amount of the indemnity may not exceed a figure equivalent to an indemnity for one year calculated from the commercial agent?s average annual remuneration over the preceding five years. If the agreement goes back less than five years, the indemnity shall be calculated on the average for the period in question.
27(1) The commercial agent shall not be entitled to the indemnity referred to in s. 25
1) where the principal has terminated the agency agreement because of default attributable to the commercial agent
2) 3) where the commercial agent has terminated the agency agreement, unless such termination is justified by
4) a) circumstances attributable to the principal, or
b) c) on grounds of age, infirmity or illness of the commercial agent in consequence of which it cannot reasonably be required to continue his activity, or
d) 3) where, with the agreement of the principal, the commercial agent assigns his rights and duties under the agency agreement to another person.
4) 28(1) The commercial agent shall lose his entitlement to the indemnity provided for in s. 25, if within one year following the termination of agreement he has not notified the principal that he intends pursuing his entitlement.
29(1) SS. 25-18 cannot to the detriment of the commercial agent be derogated from by prior agreement.
Restraint of trade clauses30(1) An agreement between the commercial agent and the principal restricting the business activity of the commercial agent following termination of the agency agreement (restraint of trade clause) shall be binding on the commercial agent only if and to the extent that:
1) it is concluded in writing,
2) 3) it relates to the geographical area or the group of customers and the geographical area entrusted to the commercial agent, and
4) 5) it relates to the kind of goods covered by the agency agreement.
6) 30(2) The restraint of trade clause shall be valid for not more than two years after termination of the agency agreement.
30(3) A restraint of trade clause may be set aside under s. 38(1) of the Danish Contracts Act.
Part 3 Commercial travellers31(1) For the purposes of this Act, commercial traveller shall mean a person who as part of his service has assumed the task of looking up customers, including an activity to negotiate the sale and purchase of goods which does not result in the collection of offers (orders) for the employer or the conclusion of agreements to this effect on behalf of the employer.
32(1) While performing his activity for the commercial firm, the commercial agent shall not without the consent of the commercial firm be entitled to negotiate the sale and purchase of goods deriving from other sources.
Commission33(1) SS. 9-10, s. 11(1), s. 12(1), s. 13(1), s. 14(1-3) and (5) and s. 15(1-3) shall apply correspondingly to commercial travellers who are paid wholly or partially on a commission basis, however, for commercial travellers the commission is payable every month. Furthermore, s. 14(5) shall only apply where the employment does not fall within the Danish Salaried Employees Act.
Relations to third parties
34(1) SS. 16-21 shall apply correspondingly.
Commencement and transitional provisions35(1) This Act shall come into force the day after notice of it has been published in the Official Gazette.
35(2) Until 1 January 1992 the rules applicable so far shall apply to agency agreements concluded prior to the coming into force of this Act. From 1 January 1992 this Act shall apply to such agreement unless the agreement prior to this date has been terminated for expiry not later than 30 June 1992. In such cases the rules applicable so far shall apply.
36(1) The Minister of Justice may lay down rules for the implementation of the Hague Convention of 19 March 1978 on which Act shall apply to intermediaries and questions of authority.
37(1) In the Act on Commission, Commercial Agency and Commercial Travellers, cf. Consolidation Act no. 636 of 15 September 1986 the following amendments are made:
1. The title of the act is changed into: The Act on Commission".
2. 3. Parts III-IV of the Act are repealed.
4. 38(1) This Act shall not apply to the Faroe Islands and Greenland. This Act may be Royal order come into force in Greenland with the variations that the special conditions for Greenland warrant.
Enacted at the Castle of Christiansborg, the 2nd of May 1990
Under our Royal Hand and Seal
In the Name of the Queen: