Portugal

Implementing legislation

Decree no. 178/96 of 3.7.1986

Proper notice

•	1 month if less than 1 year
•	2 months if equal to 1 year and less than 2 years
•	3 months if more than or equal to 2 years

Indemnity or compensation or both

Indemnity

Calculation of indemnity/compensation

Capped at a maximum of the average annual commission over last 5 years or, if less than 5 years, over duration of agency

Pre-termination commission

Yes

Post-termination commission

Yes

Back commission

Yes

Other entitlements

If the agency agreement includes a post-termination non-compete clause, the agent is entitled upon termination to compensation

Other comments

Principal may only terminate agency without notice within one month of learning of breach by agent justifying termination without notice.

Restrictive Covenants

Implementing Legislation

Decree-Law no. 178/86 (03/07/86)

Decree-Law no. 118/93 (13/04/93)

Under Portuguese law is it possible to have a restraint of trade clause operating during the agency agreement and, if so, is it subject to any qualifications?

There do not appear to be any provisions under Portuguese law that would prevent a restraint of trade clause operating during the agency agreement. Portuguese law does not impose any kind of restraint of trade during the agreement.

Under Portuguese law is it possible to have a restraint of trade clause operating following the termination or expiry of the agency agreement and, if so, is it subject to any qualifications?

Article 20 of Council Directive 86/653/EEC was transposed into the Portuguese Agency’s Regime through Article 9 (“Restraint of Trade Clause”) of Decree-Law no. 118/93. According to this article, a restraint of trade clause is an agreement restricting the business activities of an agent following the termination of the agency agreement.

This clause shall only be valid if it is concluded in writing, and it cannot establish a period longer than two years after the termination of the agreement. The restraint can only be agreed in respect of the geographical area or to the group of customers entrusted to the agent.

The assumption of this obligation by the agent gives him the right to a monetary compensation, but its calculation is not defined by the law.

Given the direct transposition of Article 20 of Council Directive 86/653/EEC into the Portuguese Agency’s Regime, there are no major differences between Article 9 of the Regime and the conditions established by the Directive.

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