Chapter 52. Agency.
Article 1005. Agency agreement.
1. Under an agency agreement, one party (agent) undertakes to perform, on remuneration, on behalf of the other party (principal) legal and other actions on its own behalf, but at the expense of the principal or on behalf and at the expense of the principal.
Under a transaction made by a third party agent in his own name and at the expense of the principal, the agent acquires the rights and becomes obliged, even if the principal is named in the transaction or has entered into a direct relationship with the third party to execute the transaction.
In a transaction concluded by an agent with a third person on behalf of and at the expense of the principal, the principal and obligations arise directly from the principal.
2. In cases where the agency agreement, concluded in writing, provides for the general authority of the agent to make transactions on behalf of the principal, the latter in relations with third parties may not refer to the lack of proper authority of the agent, unless he proves that the third party knew or should have known about the limiting powers of the agent.
3. An agency agreement may be concluded for a fixed term or without specifying its validity period.
4. The law may provide for the features of certain types of agency agreement.
Article 1006. Agency fees.
The principal is obliged to pay the agent remuneration in the amount and in the manner established in the agency agreement.
If the agency contract does not stipulate the amount of the agency fee and it cannot be determined on the basis of the terms of the contract, the fee is payable in the amount determined in accordance with paragraph 3 of Article 424 of this Code.
If there are no conditions in the contract on the procedure for payment of agency fees, the principal is obliged to pay remuneration within a week from the time the agent submits a report for the past period, unless a different procedure for paying remuneration follows from the substance of the contract or business practice.
Article 1007. Restrictions by the agency contract of the rights of the principal and the agent.
1. An agency agreement may provide for the principal’s obligation not to conclude similar agency agreements with other agents operating in a territory defined in the agreement, or to refrain from carrying out independent activities in this territory, which are similar to the activities that are the subject of an agency agreement.
2. An agency agreement may provide for the agent’s obligation not to conclude with other principals similar agency agreements that must be executed in a territory that fully or partially coincides with the territory specified in the agreement.
3. The conditions of the agency contract, by virtue of which the agent is entitled to sell goods, perform works or render services exclusively to a certain category of buyers (customers) or exclusively to buyers (customers) having a place of residence or residence in a territory defined in the contract, are insignificant.
Article 1008. Agent Reports.
1. In the course of execution of the agency agreement, the agent is obliged to submit reports to the principal in the manner and within the time periods stipulated by the agreement. If there are no corresponding conditions in the contract, the reports are submitted by the agent as soon as the contract is executed by him or after the contract expires.
2. Unless otherwise provided by the agency agreement, the necessary evidence of expenses incurred by the agent at the expense of the principal must be attached to the agent’s report.
3. The principal, who has objections to the report of the agent, must inform the agent about them within thirty days from the date of receipt of the report, unless a different period is established by agreement of the parties. Otherwise, the report is considered accepted by the principal.
Article 1009. Sub-agent agreement.
1. Unless otherwise stipulated by the agency agreement, the agent has the right to conclude a subagent agreement with another person for the purpose of executing the agreement, while remaining responsible for the actions of the subagent before the principal. An agent agreement may provide for an agent to conclude a subagent agreement with or without specifying the specific terms of such an agreement.
2. The subagent does not have the right to conclude transactions with third parties on behalf of the person who is the principal under the agency agreement, except in cases where, in accordance with paragraph 1 of Article 187 of this Code, the subagent may act on the basis of a sub-delegation. The procedure and consequences of such a transfer of trust are determined by the rules provided for in Article 976 of this Code.
Article 1010. Termination of the agency contract.
Agency agreement is terminated due to:
the refusal of one of the parties to perform the contract concluded without determining the date of its expiration;
the death of the agent, recognition of his incapacitated, partially capable or missing;
recognition of an individual entrepreneur who is an agent as insolvent (bankrupt).
Article 1011. Application to agency relations of the rules on contracts of commission and commission.
For relations arising from an agency agreement, the rules provided for by chapter 49 or chapter 51 of this Code are applied, depending on whether the agent acts on the terms of this agreement on behalf of the principal or on his own behalf, if these rules do not contradict the provisions of this chapter or the substance agency contract.