Agency Agreement Cyprus

The agency contract clearly states which commission is to be paid to the agent and how it is calculated. Payment terms are established, for example. B when payment is due, how payment is made, what happens in case of late payment and what happens if the end customer does not continue. It is sometimes agreed that the client shall compensate the agent for any commitments he may have incurred in connection with his acts as an agent, and if this is the case, this must also be included in the agreement. This rule is usually addressed in the distribution agreement. Cypriot legislation does not provide for the mandatory purchase of products not sold by the distributor and does not oblige the distributor to return unsold stocks to the supplier. In practice, however, fixed-price buyback clauses are a common feature of most, as they tend to be beneficial to both parties. It is not in the supplier`s interest for its products to be “dumped” at a low market price. Similarly, the former distributor will not want its working capital to be linked to the portfolio of a former partner, especially when it has established a link with a new supplier. The agency relationship is centered on consent – the client authorizes the agent to act on his behalf and binds him.

There are, however, different ways of giving this power – for example, explicitly, implicitly, out of habit, ratification or necessity. The powers expressly given may be governed by the written agreement between the agents and the contracting entities, and such an agreement may be used to limit the power of the agent if necessary. In addition, article 17 provides that any party may terminate the contract at any time because one of the parties has not fulfilled its obligations in whole or in part or due to exceptional circumstances. Cypriot law does not set the notice period applicable to a distribution contract, but leaves it to the parties to decide. The Contracts Act provides that, if there is an explicit or tacit contract, the distribution contract is to be maintained for a specified period of time, the parties are obliged to terminate each other in an appropriate manner and, if they do not do so, the resulting damage must be caused by the other. . . .

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