An agency agreement is a convenient and therefore widespread instrument for formalizing legal relations in the field of intermediary services in Russia. This type of contract is characterized by a number of features that make their use in some cases more preferable than, for example, the use of commission agreements or representative offices. What is the reason for this? What is the specificity of the type of contracts under consideration?
Agency agreement as a type of intermediary transaction
An agency agreement is one of the possible types of intermediary transactions provided for by the legislation of the Russian Federation, along with a commission and commission agreement. All three types of contracts have a common criterion: one person represents the interests of another, concluding agreements with a third party or performing other legally significant actions. Consider the specifics of each of the types of agreements noted by us and highlight the features of the agency.
Classification of intermediary transactions
Among the most common types of intermediary transactions is a commission agreement. Under the relevant contract, one party acting as a commission agent performs, as agreed with the other (principal), certain transactions on its behalf for a fee. That is, the commission agent in the framework of this scheme is an independent person. He may act as an authorized and obligated party in contracts concluded with third parties (and vice versa).
The next type of transaction is an order agreement. In accordance with them, one party acting as an attorney must perform some legal actions on behalf of the other party - the principal - in communication with third parties. The main difference between this type of contract and commission contracts is that the attorney, who fulfills his obligations, performs actions of legal significance on behalf of his principal. Moreover, as follows from the provisions of Article 971 of the Civil Code of the Russian Federation, rights and obligations in relation to a transaction concluded by an attorney arise only with the principal. As for the third party, they become authorized or obligated in relation to the latter.
The specifics of agency agreements
Agency agreement - a type of transaction that is governed by the provisions of Article 1005 of the Civil Code of the Russian Federation. In accordance with the law, the contract in question assumes that one of its parties, acting as an agent, may, on behalf of the other principal, perform legally significant actions on behalf of her or on her behalf. Yes, this is the "dual" nature of the relevant contracts. This is the main difference between the considered type of contracts from the two previous ones. Such is the specificity of the provisions of the Civil Code of the Russian Federation.
The Code says that the transaction that the agent concluded with a third party on his behalf (but at the expense of the principal) determines his acquisition of rights and obligations, despite the fact that it is the person who delegated him the right to interact with contractors that is indicated in the documents of the transaction. In turn, if the agent signed a contract with a third party on behalf of the principal, then the whole range of rights and obligations is established in relation to the entity that has delegated the relevant rights.
In order to disclose the details of communications between the principal and his representative, an additional agreement to the agency agreement may be concluded. It may prescribe certain conditions that are subject to execution, depending on the criteria defined in the provisions of the main contract. Often add.the agreement to the agency agreement contains information regarding changes in the terms of the fee. For example, this may be due to changes in the exchange rate - and this will be a relevant factor, say, for the tourism sector.
An agency agreement is often used if it is not necessary to give transactions properties that imply any legal consequences for the agent. All obligations upon the conclusion of transactions with third parties are borne by the principal, he also acquires various rights. Similarly, this type of contract can be used if there is a need to give a certain spectrum of agent rights, as well as to predetermine the occurrence of his duties.
A noteworthy fact: despite the fact that the agency agreement is considered an independent legal category, it can combine the signs of a contract of commission and commission. It can be noted that Article 1011 of the Civil Code contains a provision according to which the rules specific to communications provided for by the 49th chapter of the Civil Code of the Russian Federation, regulating instructions, or the 51st chapter can be applied to certain legal relations established by an agency agreement , which sets the rules for commissions. Of course, if the relevant rules do not contradict the essence of the agency agreement itself or, for example, the provisions of the Code relating to agency issues.
Another criterion that combines commission agreements, agency agreements and assignment contracts: property with which a representative (agent, commission agent) conducts operations does not belong to him on the basis of ownership. This determines the specifics of taxation and accounting for such transactions.
What is the usefulness of agency agreements
For what specific purposes can an agency agreement be useful if, it would seem, you can get by with other types of contracts provided for by the Civil Code of the Russian Federation? The main advantage of the type of transactions under consideration is that within the framework of the latter, it is possible to fix the representative’s actions, which can both assume legal significance and prohibit the agent from carrying out activities that have legal consequences.
As a rule, such communications are characteristic of transactions with a complex structure of the subject. For example, it often happens that a particular store that sells goods as a dealer provides additional services for the counterparty - advertising support, marketing research, etc. In this case, it is quite difficult to draw up the correct range of provisions within the framework of the commission or commission agreement, which would reflect the specifics of communications between the two organizations. Thus, a trade agency agreement may be concluded, the subject of which is various activities of the representative, which can predetermine the emergence of his rights and obligations.
Industry Specifics of Agency Agreements: Tourism
The type of intermediary transaction under consideration is so useful that it can be used in a wide range of business sectors. In particular, the agency agreement in tourism is characterized by a high prevalence. Consider what are the options for its use in this area.
The legal relationship between the tour operator (brand owner) and the travel agent can be built in any of the three models that we described above.
It may thus be a contract of assignment. In accordance with this contract, the tour operator acts as a principal. He instructs the travel agent, that is, the attorney, to sign contracts with customers, travelers. According to the provisions of Article 971 of the Civil Code of the Russian Federation, all rights and obligations under the contract are established only with respect to the principal.
In the structure of the contract, for example, the terms within which the attorney can act on behalf of his principal can be prescribed.Also, the travel agent may be required to perform certain legally significant actions in accordance with the recommendations of the tour operator. Mandatory criteria here are the legitimacy of the respective activities, specifics, as well as feasibility (such are the provisions of Article 973 of the Civil Code of the Russian Federation). It can also be noted that, in accordance with Article 974 of the Civil Code of the Russian Federation, the attorney is obligated to fulfill all the necessary instructions personally (exceptions to this rule are contained in the provisions of Article 976 of the Civil Code of the Russian Federation). In some cases, the travel agent must inform the tour operator about how things are going with the execution of orders.
The second option for registration of legal relations between a travel agent and a tour operator is the signing of a commission contract. This scheme implies that the commission agent acquires a full range of rights and obligations in the framework of transactions with customers. At the same time, the contract between the travel agent and the tour operator may include conditions that determine the terms of the agreement, as well as the commitments of the principal not to give the right to third parties to participate as an active party to communications.
In turn, an agency agreement for the provision of tourism services may imply two types of activities performed by a travel agent. Firstly, a representative can conclude a contract on his behalf and, therefore, act as one of the parties to the transaction. But in these cases, he, as a rule, undertakes to transfer subsequently all the rights relating to the signed agreement to the principal. Secondly, the option is possible when the travel agent enters into an agreement on behalf of the tour operator, thereby not acting as a party to the transaction.
The agency agreement for the provision of tourism services can be characterized by a peculiarity: if it is not prohibited by the terms of the agreement between the tour operator and the travel agent, the second may involve third parties in the execution of the contract (by concluding subagent agreements). In this case, the principal upon the fact of the work of subcontractors can also become a party to the transaction immediately or allow the travel agent to act in that capacity.
Aspect of reward
Under agency agreements, the principal, in accordance with the provisions of the Civil Code of the Russian Federation, must pay his counterparty remuneration for taking actions to conclude the contracts necessary for the business. But, if for some reason the corresponding condition is not spelled out in the contract, then the amount of remuneration should be determined in accordance with the provisions of Article 424 of the Civil Code of the Russian Federation. That is, the reference here is the average market rates for certain intermediary services. The payment term should also be prescribed in the contract, and if this clause is missing, the principal must settle with the agent within a week.
Subagent agreement
In addition to the fact that there are various sectoral types of agency agreements - tourist or, for example, commercial, the Russian legislation provides for a subtype of the contract in question - a subagent agreement.
Above, we noted on the example of a tour operator that the principal’s counterparty can conclude additional contracts with subcontractors in order to solve his tasks, while maintaining full responsibility to the principal for the course of communication with target customers. In turn, the subagent, using the provisions of Article 187 of the Civil Code of the Russian Federation, can itself delegate the execution of certain actions to other persons. Unless, of course, this is prohibited by the main contract.
Termination of an agreement
The agency agreement may be terminated by either of the parties, but only if the terms of its validity are not specified in it. Otherwise, the termination of legal relations is possible if the parties sign a duly executed termination agreement. Agent, note! A similar procedure with respect to, for example, a commission contract is carried out according to other rules. Also, in some cases, the contract may be terminated in court.
Agency Agreements: An International Aspect
An interesting fact can be noted. It is known that the provisions of the Russian Civil Code are quite close to many provisions of the legislation of other EAEU countries, for example, Kazakhstan. However, this type of legal relationship, as an agency agreement, is not regulated in the Republic of Kazakhstan. A similar situation is in Belarus.
But this does not mean that there are no provisions in the legislation of Kazakhstan and Belarus that would actually regulate such transactions - they exist. They are simply referred to slightly differently. For example, in the Republic of Kazakhstan, actual agent relations are governed by provisions reflecting the specifics of contracts for commission and representation.
The legal system of Belarus provides for commercial representation agreements that are sufficiently close to the agency agreements used in Russia. The main source of law in relation to such communications in a neighboring country is the same Civil Code. In accordance with the provisions of this legal commercial act representative is a person who can independently act on behalf of business entities with prior coordination of activities with them. Just like a Russian agent, a Belarusian representative works only on condition that a reward is paid by the business entity.
Contract structure
What should the agency agreement look like? A sample structure of the relevant contract may contain the following clauses:
- it is necessary to clearly articulate the subject of the agreement (it is important to indicate whether this will be the agent’s actions in the form of active sales or the provision of services; the content of the representative’s activities matters);
- Agent credentials
- amount of agent remuneration. Payment in many market segments depends on whether a person works on his own behalf or fully represents the interests of the principal (that is, when drawing up a contract, it is necessary to study the specifics of the relevant industry and correctly correlate the facts with the provisions of the contract);
- in some cases, it is useful to write down certain restrictions in the agent’s actions in the contract (for example, the possibility of contacting the customer only in writing);
- in additional agreements or in the contract itself, you can determine the frequency of reporting for the principal, approve its form.
Among the most important points to which experts recommend paying special attention is the procedure for reimbursing agent expenses. It is necessary to specify in the contract which costs the company-customer will cover, and which agent will have to bear independently. As a rule, this depends on the sphere of business and the geography of the activity of the entity that represents the interests of the supplier of services or goods. The agency agreement, the model of the structure of which we have examined, should therefore be adapted to the specific industry in which the principal and his representative collaborate.
