Agency Law in Croatia
Section 20, Articles 804 – 834 of the Croatian Obligations Act, published in the Official Gazette of the Republic of Croatia, No. 35/05, 41/08, 125/11.
- 1 month if less than or equal to 1 year;
- 2 months if more than 1 year and less than or equal to 2 years;
- 3 months if more than 2 years and less than or equal to 3 years;
- 4 months if more than 3 years and less than or equal to 4 years;
- 5 months if more than 4 years and less than or equal to 5 years;
- 6 months if more than 5 years.
Indemnity or compensation or both
Calculation of indemnity/compensation
The compensation is capped at a maximum of the average annual gross commission earned by the agent during the last five years of the agency (or, if less than five years, over the duration of the agency). The level of indemnity depends on the extent to which the agent has suffered losses, and can exceed the amount of the compensation.
The principal must be given notice of the indemnity/compensation claim by the agent within one year as of the agency agreement’s termination.
The agency agreement must be concluded in writing.
Croatian Obligations Act
- According to Article 805 of the Croatian Obligations Act, the agent shall need to obtain prior approval from the principal for performing the same type of agency operations in the same area on behalf of another principal.
- Pursuant to Article 834 of the Croatian Obligations Act, a restraint of trade clause operating (the “Restraint”) can be agreed upon following the termination or expiry of the agency agreement, under the following conditions:
- it must relate to the same customers, the same area entrusted to the commercial agent, and the same goods envisaged under the agency agreement;
- it must be in writing;
- the Restraint cannot exceed two years following the termination of the agency agreement;
- should the agency agreement be terminated due to reasons relating to the principal, the Restraint shall remain in force only if the principal pays a compensation to the agent, and continues to pay an additional monthly compensation equal to the average monthly commissions paid to the agent in the last five years, i.e. if the agency agreement lasted less than five years, equal to the average monthly commission paid to the agent in that period; and
- should the agency agreement be terminated due to the default of the principal, the agent is entitled to notify the principal that the Restraint is consequently not effective. This notice must be in writing, and sent to the principal within one month as of the termination of the agency agreement.
Any condition relating to the Restraint contrary to these terms shall be considered null and void.
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