The main source of protection for commercial agents in Egypt is the Commercial Agency Law (Law No. 120/1982) which came into force on 26 July 1982.
According to Article 1 of Law 120/1982, a commercial agent shall mean any person or entity which, not being bound by a contract of employment or for services, ordinarily carries out the offering of bids or purchasing for merchants or distributors, in his own name or on behalf of others. The definition of a commercial agent includes the sale or purchase of goods as well as services.
Law 120/1982 is mandatory and agents or principals cannot contract out of the legislation. Law 120/1982 does not exclude agents whose agency activities are secondary i.e. their activities are not the primary purpose of the agency agreement with their principal.
Termination
The statutory notice period to which a terminated agent is entitled depends on the contract concluded between the agent and principal. Article 180 of Law No. 17/1999 (“the Commercial Law”) states that the agency agreement is to be in writing. In particular the agency agreement shall indicate the limits of the agency, the remuneration of the agent, the area of his activity and the length of the agreement if it is a definite period.
An agent is entitled to damages on termination depending on what is stipulated in the agency agreement and relevant case law. Paragraph 1 of Article 148 of the Civil Code (Law 131/1948) states that the agreement shall be executed according to its provisions and in a way compatible with bona fides/good intention requirements.
According to Article 188 of the Commercial Law the agency agreement shall be concluded in the common interest of the parties. If the agreement is for an indefinite period, the principal shall not terminate it unless the agent is at fault otherwise the principal shall compensate the agent for the harm caused to him as a result of termination.
Any agreement to the contrary shall be null and void.
In addition, Article 189 of the Commercial Law states that if the agency agreement is for a fixed period, and the principal decides not to renew it at the expiry of the period, the agent shall have the right to receive compensation to be determined by the Court, even if there is an agreement to the contrary. This is subject to the following:
Damages may not be payable to the agent in circumstances where the principal has terminated the agency agreement because of a fault attributable to the agent which would justify immediate termination. However, this is subject to any conditions stipulated in the agency agreement, the nature of the fault attributable to the agent and case law.
According to Article 190 of the Commercial Law, any action for compensation must be commenced within 90 days from the date the agency agreement was terminated, otherwise the action will lapse. All other actions in respect of the agency agreement must be commenced within 2 years of termination of the agency agreement.
Miscellaneous
Article 716 of the Egyptian Civil Code states that the agent may assign the agency at any time even despite the agency agreement stating otherwise. Assignment of the agency shall be effected simply by notifying the principal.
It would appear that it is possible for an agency agreement to provide for the law of another country to govern the contract and for courts of another country to have jurisdiction.
agentlaw.co.uk wishes to thank Essam Shiha for his contribution to this section.
