Greece

Agency Law in Greece

Implementing legislation

Presidential Decree No. 219 of 18/30.5.1991 (hereinafter, the “PD 219/1991“), as amended by virtue of Presidential Decrees no. 249/1993, 88/1994, 312/1995 and Greek law 2557/2007, and in force.

Proper notice

• 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 or equal to 3 years and less than 4 years;
• 4 months if more than or equal to 4 years and less than 5 years;
• 5 months if more than or equal to 5 years and less than 6 years;
• 6 months if more than or equal to 6 years.

The parties are not allowed to agree on shorter notice periods.

Indemnity or compensation or both

Article 9 of the PD 219/1991 provides the relevant information, namely:

1. Following the termination of the contract, the agent shall be entitled to an indemnity if and to the extent that, during the term of the contract, he 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 the payment of this indemnity is equitable having regard to all the circumstances and, in particular, the commission lost by the commercial agent on the business transacted with such customers.
2. Notwithstanding the grant of indemnity, as described above, the agent may be entitled to compensation for the damage incurred by him in accordance with the Greek Civil Code. Such compensation claims may be raised on the basis of a) contractual liability and/or b) tort, in which possible unjust enrichment claim is also included.

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 (usually the Greek courts calculate a reasonable period as 2-6 months).

Back commission

Yes.

Other comments

The PD 219/1991 applies to agency contracts. Pursuant to Greek law 3557/2007, the provisions of the PD 219/1991 apply, by way of analogy, to (i) agency contracts relating to the provision of services and (ii) exclusive distribution contracts, provided that, by virtue of this contract, the distributor acts as part of the business organization of the supplier.

Restrictive Covenants

Implementing Legislation

PD 219/1991 and Greek Civil Code.

1) Under Greek 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 Greek Law there is no provision expressly allowing or restricting a restraint of trade clause in an agency agreement. However, both case law and legal theory accept that the agent is under an obligation not to engage in competitive activities and so is under an obligation to observe a restraint of trade clause, in accordance with the general principles of Greek law on good faith and business morals (article 288 of the Greek Civil Code). This view is further supported by article 4 of the PD219/1991, which is of mandatory law and states that: “In performing his activities a commercial agent must look after his principal’s interests and act dutifully and in good faith.” This has been interpreted to include an obligation of the agent not to engage in competitive acts which could endanger his principal’s interests.

In view of the above it can be assumed that a restraint of trade clause will be considered as a valid clause binding the agent, who is deemed to be acting in the interests of his principal. Furthermore, pursuant to par. 4 of the article 4 of the PD219/1991, which determines the mandatory effect of this article, even if no such clause exists in the agreement, the agent is nevertheless under an obligation not to engage in such activities.

2) Under Greek 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?

Under Greek law, and specifically under Article 10 of the PD 219/1991 a restraint of trade clause operating following the termination or expiry of the agency agreement is admissible and valid under the following conditions:

1. it is in writing; and
2. it relates to the geographical area or the group of customers and the geographical area entrusted to the commercial agent and to the kind of goods covered by his agency under the contract.

Article 10(3) of the PD 219/1991 states that such non-competition clause is valid for no more than a maximum of one year following the termination of the contract.

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