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.
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.
sub-agents: how are sub-agents treated under your national law?
Pursuant to article 670-4 of the Law of Obligations Act, the provisions for authorisation agreements apply to agency contracts unless the provisions of Chapter 38 (Agency Contract) provide otherwise. Article 622 (from the chapter concerning authorisation agreements) provides that it is presumed that a mandatary shall perform the mandate in person and that a mandatary also has the right to use the assistance of third parties in performing the mandate. Using the assistance of third parties can mean: Firstly, the mandatary still performs the mandate in person but uses the help of a third person. Secondly, it is possible for the mandatary to delegate their obligations to a third party while still remaining responsible before the mandator. Such a possibility for delegation should be clearly stated and regulated in the contract between the mandator and the mandatary.
Retirement: is there a specific age that the agent must reach in order to retire from the agency and be able to make a claim under the provisions of your law which implement Article 18 (b) of the Agents Directive 86/653/EC?
Retirement and corporate entity: if the agency is operated by one person who has decided to form a corporate entity which is to act as the agent, and that person is the sole shareholder/owner and sole director/manager of such entity and that person retired, would any protection under Articles 18(b) and 17 of the Directive be extended to that person despite the fact that such person operates his/her agency through a corporate entity?
agentlaw.co.uk wishes to thank TGS Baltic Estonia for its involvement with this page. Last updated 07.02.2022