Commercial agency contracts in France and Spain: everything you need to know with BCVLex
Agency contracts are a fundamental tool for companies that want to expand their presence in new markets, such as Spain and France, without the need to establish a physical headquarters. In this article, we explain what agency agreements are, their advantages, their challenges and how BCVLex’s lawyers can help you ensure that these contracts meet the needs of your business, while complying with local regulations.
What is an agency contract?
A commercial agency agreement is an agreement whereby one party (the agent) agrees to promote or conclude business on behalf of another party (the company) on an ongoing basis and in exchange for remuneration. Unlike an employee, the agent acts independently but is subject to the company’s guidelines.
In Spain, the agency contract is governed by Law 12/1992 of 27 May, while in France it is governed by the Commercial Code. While the regulations are similar, there are some important differences that should be considered when drafting and negotiating these contracts, especially if they are cross-border.
Advantages of agency contracts in Spain and France
- Expansion without a physical presence: Agency agreements allow companies to enter new markets without the costs associated with opening an office or subsidiary. This is ideal for companies looking to expand their operations in Spain or France in an agile and cost-effective way.
- Business flexibility: These contracts offer companies the opportunity to adapt their terms according to the evolution of the market or the relationship with the agent. At BCVLex, we make sure that your agency contracts are flexible enough to adapt to business changes without compromising your interests.
- Legal protection: In Spain, as in France, the laws protect the agent and the entrepreneur, which makes it possible to establish a balanced legal framework. Contracts must be drafted in accordance with the applicable regulations, protecting your interests and minimising the risk of litigation.
- Remuneration and commissions: A well-structured agency agreement establishes a clear remuneration system, based on commissions for the activity generated. The BCVLex team will help you define a pricing system that aligns the interests of both parties.
Challenges and how to overcome them with BCVLex
Agency contracts also present a number of challenges, depending on the specific circumstances of each case:
- Agent Dependency: With one of the main risks being to rely too heavily on a single agent for your business expansion, it may be a good idea to diversify your agents to avoid over-reliance and minimize risk.
- Customer compensation: In Spain and France, agents are entitled to compensation if the contract is unfairly terminated, and they have generated a customer base for the company. This compensation can be costly and requires guidance on how to effectively manage these situations.
- Regulatory compliance: While there are similarities, there are some key differences in the laws governing agency agreements in Spain and France, making it paramount to have advisors who are familiar with both legal systems.
BCVLex Agency Contract Services
At BCVLex, we offer a full service for the drafting, negotiation and execution of agency agreements in Spain and France with a multi-jurisdictional approach when necessary. Our team will be with you every step of the way to ensure that your commercial agency agreement is aligned with your needs and the applicable regulations. Our teams in Bordeaux and Madrid are at your service and operate throughout France and Spain to defend your interests. Don’t hesitate to contact us.
