So-called “belated commissions” in agency relationships

4 March 2024

Agency contracts are undoubtedly the most peculiar among self-employment relationships, as they require specific features that involve dedicated legal and collective regulation. Such complexity is, in fact, inferable from the provisions regarding the payment of the commissions accrued by agents.

Among the benefits provided for agents, the commissions find their source in Italian regulations and European dispositions.

Besides the regulations for determining their amount – which usually define a percentage of the final value of the deal that the principal was able to conclude thanks to the agent’s activities – the Italian provisions on the matter also prescribe that agents shall be granted the payments of all commissions due for all deals completed during the execution of their relationship if the latter was reached as an effect to their actions.

The scope of this provision is outlined in par. 1 section 1748 of the Italian Civil Code is further defined in the following par. 3 of the same article, according to which the agents’ right to receive the payment of commissions relating to business concluded after the termination of the relationship survives such an interruption if the deal at issue was closed predominantly thanks to the agent’s work and within a reasonable time from the termination.

This specific scenario identifies those commonly defined as “belated commissions”, as the right to receive their relevant payment arises after the termination of the agency relationship under which the activities were executed in the first place.

On this issue, the collective economic agreements pertaining to both the industrial and the commercial sector also provide a reporting obligation lying on the agents towards the principal upon termination of the relationship, whereby the former have to inform their (former) principal of the negotiations in progress at the time of termination. These regulations also clarify that terminated agents remain entitled to receive the payment of the commission deriving from deals whose negotiations successfully concluded during six months following the termination or – depending on the provisions defined by the parties or the nature of the business itself – a more extended period, where contractually provided for.

In any case, the requirement for paying the commissions due is more generally stated by par. 1 section 1748 of the Italian Civil Code provides that agents accrue the entitlement to the commissions of deals only if their activity was – predominantly – the reason why the conclusion was reached.

Finally, it is helpful to clarify that when the deal is executed before the termination of the agency relationship and, because of arrangements reached by the client and the principal, it is agreed on a postponement or a prorated payment of the price, the deal would not be framed as a belated commission case, since there is no doubt that, under these circumstances, the agent has already vested the entitlement to the payment of the commission on the deal.

2024 - Morri Rossetti