Source: https://testmyprep.com/subject/law/commission-agreement-civil-law-the-special-part
Timestamp: 2019-08-19 05:27:23
Document Index: 735969529

Matched Legal Cases: ['Art. 990', 'Art. 991', 'art 1', 'art 2', 'Art. 999', 'art. 359']

In accordance with paragraph 1 of Art. 990 CC under a commission agreement, one party (the commission agent) undertakes, on behalf of the other party (the committent) for a fee to make a transaction (several transactions) on its own behalf, but at the expense of the principal.
The commission agent (intermediary) who acts on his behalf is initially the party of prisoners in the interest of the principal of transactions. and therefore he himself acquires rights and duties on them, which he then gives to the committent.
The issuer (the alienator or the purchaser of the goods) does not become a participant in transactions concluded by the commission agent on his behalf and at his expense, even if he is directly named in the transaction or enters into the transaction direct relationship with a third party counterparty for its execution. This is the commission's contract is different from the contract of commission.
The peculiarity of the commission agreement, which distinguishes it from the contract of commission, is also that its subject is only the completion of transactions, usually on the sale of the property of the principal.
Finally, the commission agreement is always onerous, and the contract of commission can be that only if there is a special instruction of the law, other legal act or contract. The commensurate nature of the commission, conditioned by the underlying relations of commercial (commercial) mediation, excludes the personal-confidential nature of this treaty. Therefore, a commission agent, unlike an attorney, can not unilaterally, helplessly and without compensation for losses refuse to perform the contract, and the death of a citizen or the liquidation of a legal entity acting as a principal does not entail an automatic termination of the contract, since it is possible < strong> succession.
The commission agreement on its legal nature is consensual, reimbursable and bilateral. At its conclusion, general provisions on the form of transactions.
The main duty of the commission agent, in the quality of which is a legal entity or an individual entrepreneur, consists in committing a transaction or transactions for the principal in accordance with the instruction given to him. The commission agent is responsible for for the validity, but not for the fulfillment of the transactions concluded by him with third parties in the interest of the committent (clause 1, article 993 of the Civil Code).
The commission agent is responsible to the principal for the failure of a third party to enter into a valid transaction entered into by him only in two cases:
• if the commission agent fails to exercise the necessary circumspection in choosing a third party, the counterparty to the transaction, for example, when concluding a transaction with a legal entity at the stage of liquidation;
• if there is a condition in the contract that the commission agent assumes the guarantee for the execution of the transaction concluded by the third party (delkredere) (clause 1, article 991 of the Civil Code). In this case, the commission agent at the same time becomes a surety (Article 361 GK) and along with a third person is responsible to the principal for the proper execution of the concluded transaction.
One of the principal duties of the committent is payment to the commission agent specified in the contract remuneration, which directly follows from the norm of cl. 990 GK. The remuneration may be established in the form of a difference or a part of the difference between the appointed price of the goods and the more favorable price at which the commission agent will be able to sell the goods. If there is no provision in the contract for the amount of remuneration and the impossibility to determine it based on the terms of the contract, it must be paid in the amount normally paid in comparable circumstances for remuneration for intermediary commission services (Clause 3, Article 424 of the Civil Code). Thus, the condition of remuneration is not among the essential conditions of this contract. In the presence of the condition of delkredere in the contract, the issuer is also obliged to pay additional remuneration (Section 1, Art. 991 GK).
The issuer is also obliged to reimburse the commission agent for all costs associated with the execution of the assignment, since in accordance with Cl. 990 CC it should be at his expense. However, according to the general rule, the commission agent has no right to reimbursement of storage costs, unless otherwise specified in the law or the commission agreement (Article 1001 of the Civil Code).
Since the commission agent commits transactions in the interests and at the expense of the principal, he is obliged to execute the commission on the terms most favorable to the principal and in accordance with his instructions. In the absence of such instructions in the contract, the commission agent is obliged to act in accordance with the customs of business turnover or other commonly presented requirements (Part 1 of Article 992 of the Civil Code).
Derogations from the committent's instructions when executing the contract, including those relating to the price of concluded transactions, are permissible only in cases when it is necessary in the interest of the principal and the commission agent could not request the committent in advance or did not receive a response to his request within a reasonable time. However, here again the commission agent is obliged to notify the committent of the departures made, as soon as it became possible. Only a professional commission agent may, under the terms of the contract, be given the right to deviate from the instructions of the principal without prior request and even without further notice (clause 1 of article 995 of the Civil Code).
If the commission agent sold the property of the principal at a price below the agreed price, he is obliged to compensate for the difference, unless he proves that, given the prevailing situation in the market, he had no other choice, and such a sale warned even greater losses for the committent. In the event that the commission agent was required to request the principal in advance, he must also prove that he can not obtain the prior consent of the committent for a deviation from his instructions (paragraph 2 of Article 995 of the Civil Code).
If the commission agent bought the property at a price higher than the one agreed with the principal, the latter has the right to refuse to accept such a purchase. However, the committent must notify the commission agent thereof within a reasonable time upon receipt of the notice of the transaction. Otherwise, the purchase is recognized by the accepted principal. In this situation, the commission agent can also accept the difference in the price to his account. In this case, the principal does not have the right to refuse the transaction concluded for him, since he does not suffer losses from failure to comply with his instructions by the commission agent (item 3 of item 995 ГК).
The additional benefit obtained as a result of commissioning by the commission agent of a transaction on terms more favorable than those specified by the principal is divided between the principal and the commission agent equally, unless otherwise provided agreement of the parties (part 2 of article 992 of the Civil Code).
Upon execution of the commission, the commission agent is obliged to present to the comitter report and transfer to him all the commission received under the contract. The principal objections to the report shall be communicated to the commission for 30 days from the date of its receipt, unless the contract provides otherwise. Otherwise, in the absence of other agreement the report shall be deemed accepted in the form in which it is presented (Art. 999 of the Civil Code).
The execution of the commission contract is also made in the payment to the commissioner remuneration by the committent and reimbursement to him of expenses incurred in connection with the fulfillment of the commissioner's commission. At the same time, the law establishes special guarantees for the commission agent, which is especially important for professional commercial intermediaries. Firstly, he is provided with the stipulated art. 359 GK the right to retain the things of the committent held by him until all his monetary claims are satisfied under the contract (Article 996 GK). Secondly, he has the right to withhold amounts due to him under the agreement from the amounts received by him for the committent, having set off his claims to the principal (Article 997 of the Civil Code).
The principal as a service recipient has the right at any time to unilaterally and helplessly refuse to perform the contract. However, he is obliged to reimburse to the commission agent all losses incurred by the cancellation of the order, including lost revenues in the form of the remuneration due for services, as well as within the time period established by the commission agreement, and if such a period is not established, immediately dispose of his possessions (Article 1003 GK) . The commission agent shall not be entitled to refuse unilaterally execution of the committent's commission, unless such right is expressly provided for in the agreement.
Unless otherwise specified by the commission agreement, the commission agent has the right to conclude the contract of the subcommission with another person, remaining responsible for the actions of the subcommissioner to the principal (Article 994 of the Civil Code ).
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