The Law of Obligations Act, which came into force on 1 July 2002.
Indemnity or compensation or both
Indemnity and damages for loss occasioned by termination.
Calculation of indemnity/compensation
Other entitlements on termination
If the agent is subject to a post-termination non-compete restriction, the agent is entitled to reasonable compensation from the principal for the duration of the post-termination non-compete restriction.
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Law of Obligations Act (1 July 2002).
General Principles of the Civil Code Act (1 September 1994).
1) Under Estonian 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?
Under the general freedom of contract principle contained in the Law of Obligations Act and the General Principles of the Civil Code Act, agency agreements can contain provisions by which the agent agrees not to compete with the principal during the term of the agency agreement. Penalty provisions are often inserted into the agency agreement on the basis of which the agent will be obliged to pay a penalty to the principal should he breach the restraint of trade clause.
2) Under Estonian 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?
Restraint of trade clauses operating following the termination or expiry of the agency agreement are possible under Estonia law subject to the following qualifications:
Pursuant to Article 689-4 of the Law of Obligations Act, before the expiration of the agency contract, the principal has the right to cancel the restraint of trade clause in writing. According to Article 689–5 of the Law of Obligations Act, if the agency contract is cancelled due to a violation of the contract by a party, the cancelling party may also cancel the restraint of trade clause within one month. In such circumstances, the principal is not required to pay the compensation due under Article 689-3 to the agent.
Any agreement which deprives the agent of the rights outlined above is considered void under Article 689-6 of the Law of Obligations Act.
agentlaw.co.uk wishes to thank Sorainen Law Offices of Tallinn for its contribution to this page.