Scope of the Act
Art. 1.
This Act applies to assignments to sell or buy tangible property on behalf of another person in one's own name.
The person who has undertaken the assignment is defined as a Commissioner. The person on whose behalf the sale or purchase is to take place is called the Principal. If the assignment falls within the scope of the Commissioner´s conducted business, the Commissioner is defined as a Trade Commissioner. An agreement between a Commissioner and a Principal is called a Commission agreement.
If the assignment relates to trading in financial instruments, Art. 10, 12, 33, 34 and 39–42 do not apply.
Freedom of contract and the mandatory nature of the Act
Art. 2.
If the Principal is a consumer and the Commissioner is a Trade Commissioner, terms of the agreement that are to the detriment of the Principal, are without effect against him. However, this does not apply to assignments where the Principal is a professional customer according to Chapter 9, Article 5 of the Securities Market Act (2007: 528). A consumer is defined as a natural person who trades mainly for purposes that fall outside business activities.
In cases other than those covered by the first paragraph, the terms of the agreement are subject to the provisions of this Act, unless otherwise stated in the Act.
For the purposes of the first and second paragraphs, practices that have been established between the parties and commercial practices or other practices that must be considered binding for the parties.
Lag (2017: 698).
Commission agreements through inaction
Art. 3.
A Trade Commissioner who receives a request to perform an assignment falling within the scope of the Commissioners’ activities from someone with whom the Commissioner is already in business with, shall notify him without delay if the Commissioner does not wish to carry out the assignment. Otherwise, the Commissioner shall be deemed to have accepted the task.
The obligations of the Commissioner
Art. 4.
In the performance of its obligations, a Commissioner shall take the interest of the Principal into account. The Commissioner shall comply with the instructions of the Principal, inform him to a reasonable extent of such circumstances as may be relevant to the assignment and notify him without delay of the agreements entered into with third parties on behalf of the Principal.
A Trade Commissioner does not have to state with whom an agreement has been entered into, except when the Principal has the right to take over the Commissioner's claims against third parties pursuant to Article 27.
Art. 5.
In case the Principal has set a minimum sale price or a maximum purchase price or has given other instructions for the assignment and the circumstances are such that the instructions cannot or should not be followed, the Commissioner shall request new instructions when it appears reasonable to do so.
A Commissioner who, in the cases referred to in the first paragraph, cannot receive new instructions in time, shall suspend the performance of his duties. However, if there are specific reasons to believe that the Principal would nevertheless want the task to be carried out, the Commissioner shall carry it out in an appropriate manner.
Art. 6.
A Commissioner shall take good care of the Principal´s property. A Trade Commissioner must, if necessary, take out a non-life insurance.
If the Principal´s goods are not individualized, the Commissioner shall keep them separated from other goods of the same kind, unless the Principal has expressly agreed to mix them. The same applies if a Trade Commissioner receives the Principal´s money.
The Commissioner shall report on his assignment.
Art. 7.
A Trade Commissioner who in his notification on agreements entered into pursuant to Art. 4, has not stated with whom an agreement has been entered into, is liable to the Principal for the performance of the agreement.
Art. 8.
A Commissioner who in his notification pursuant to Art. 4 has incorrectly stated that an agreement has been entered into, is liable to the Principal for the performance of the stated agreement. The same applies to a Commissioner who has unjustifiably granted a third party a deferral for the performance of an agreement.
The obligations of the Principal
Art. 9.
A Principal shall, in advance, provide the property with which the Commissioner is to perform an agreement with a third party.
Art. 10.
If a commission assignment is permanent, a Principal who foresees that the scope of the assignment will be significantly less than what the Commissioner had reason to expect, shall notify him without delay.
A Trade Commissioner's right to commission
Art. 11.
A Trade Commissioner, who during the assignment period enters into an agreement with a third party on behalf of the Principal, is entitled to a commission on the agreements.
A Trade Commissioner who has been assigned a certain area or a certain clientele is also entitled to a commission on agreements that the Principal has entered into during the assignment period with a third party belonging to the area or clientele. The same applies to agreements entered into by another Commissioner who has been commissioned by the Principal.
If the amount of the commission has not been determined in the agreement, it shall be a reasonable amount.
If a Trade Commissioner fulfils a service after self-entry pursuant to Art. 19 or for any other reason in relation to the Principal, the Commissioner is entitled to the same commission as if the service had been performed by a third party.
Art. 12.
A Trade Commissioner who has had a permanent assignment, is also entitled to a commission on agreements that have been entered into after the assignment ended, if
- the agreement has been entered into in such circumstances as set out in Art. 11 and the Commissioner or the Principal has received tenders from third parties during the assignment period, or
- the agreement has been concluded mainly through the Commissioner´s participation during the term of the agreement and has been concluded within a reasonable time after the termination of the assignment.
Art. 13.
A Trade Commissioner is entitled to a commission only to the extent that a third party has performed the agreement. However, if a third party's failure to perform the agreement is due to the Principal or any relationship on his part, such failure does not affect the Commissioner's entitlement to commission.
The terms of the agreement which, in comparison with the first paragraph, are to the detriment of the Commissioner shall have no effect against him.
The Commissioner's right to compensation for the performance of agreements and other expenses
Art. 14.
If a Commissioner himself has been allowed to perform the agreement with a third party which the Commissioner has entered into on behalf of the Principal, the Commissioner is entitled to compensation from the Principal for this. If the Commissioner has performed the agreement in advance without the Principal´s consent, the Commissioner is only entitled to a compensation if a third party has performed the agreement to a corresponding extent.
If the commission is not payable or is not intended to include reimbursement of expenses, the Commissioner is entitled to reimbursement for such reasonable expenses incurred in connection with the assignment.
Commissioner's security right
Art. 15.
As security for a claim for commission or other remuneration from the Principal, a Commissioner has a pledge on the Principal´s goods which the Commissioner has purchased or received for sale in connection with the assignment, if the Commissioner has the goods in his possession or under equivalent control.
A Trade Commissioner is also liable for a claim under the first paragraph on goods that the Principal has purchased or received for sale due to a different commission assignment for the Principal than the one for which the claim has arisen, if the assignment falls within the scope of the commercial activity conducted by the Principal.
A Commissioner who has sold the Principal´s goods has a pledge right on the claim of a third party, unless the Commissioner would have had a pledge on the goods if they had not been sold. The same applies to a claim by a third party for the delivery of purchased goods.
The Commissioner's pledge expires if the Commissioner provides acceptable security for the claim.
Art. 16.
The Commissioner may realize his pledge in accordance with Art. 15 to cover his secured claims, when the claim for which the pledge is secured has fallen due for payment or when another event has occurred which, according to an agreement between the parties, entails the right to realize the pledge.
If the pledge applies to goods that are exposed to rapid destruction or deterioration or that require too expensive care, the goods may be realized earlier than stated in the first paragraph.
The pledge will be sold at auction. Financial instruments and currency may also be sold in other ways or realized through settlement, if this is done in a commercially reasonable manner. A claim from a third party must, if possible, be recovered if it is due for payment.
The Commissioner shall, if possible, inform the Principal before the realization. This however does not apply in the cases referred to in the second sentence of the third paragraph.
If the Commissioner is bankrupt, Chapter 8, Art. 10 of the Bankruptcy Act (1987: 672) applies instead of this Article.
Art. 17.
If a Commissioner has not received a commission or other remuneration from the Principal in a timely manner, or if there are strong reasons to assume that no remuneration will be provided, the Commissioner has the right to withhold materials and documents which the Commissioner has received to fulfil the assignment and that belong to the Principal as a security for his claim. Powers-of-attorney and other documents of special importance to the Principal may not, however, be withheld.
The Commissioner's right to withhold materials and documents ceases if the Principal provides acceptable security for the claim.
The Commissioner's right to stop
Art. 18.
A Commissioner who has purchased goods on behalf of the Principal and forwarded them to the Principal may, in order to secure his right under Article 15, first paragraph, prevent the goods from being handed over to the Principal. The same applies to goods which the Commissioner has held for sale and which have been sent back to the Principal.
The first paragraph applies even if the Principal has received transport documents relating to the goods.
Self-entry and combination
Art. 19.
If a commission assignment is performed in competition with several buyers or sellers, the Commissioner has the right to act on his own behalf as a buyer or seller of the product (self-entry) or to carry out two or more Principals’ assignments against each other (combination). Otherwise, self-entry or combination may only take place if the Principal has expressly approved this. However, such approval is not required if the Principal is an equal counterparty in accordance with Chapter 9, Art. 7 of the Securities Market Act (2007: 528).
If self-entry or combination has taken place regarding agreements entered into in accordance with the first paragraph, the Commissioner shall inform the Principal of this in his notification pursuant to Art. 4.
If the Principal is a trader and the commission assignment does not fall within an area that constitutes an essential part of the business activity, the terms of the agreement which in comparison with this Article are to the detriment of the Principal, are without effect against him. However, this does not apply if the Principal is a professional customer according to Chapter 9 Art. 4 or 5 of the Securities Market Act.
Lag (2017: 698).
Report of price
Art. 20.
A Commissioner shall report to the Principal the price agreed with a third party or, in the event of self-entry or combination, the price approved or determined by the Commissioner.
If, after receiving the commission assignment, the Commissioner has entered into an agreement that would be sufficient to carry out the assignment, the reported price may not be less favourable to the Principal than the price in this agreement. However, this does not apply if the Commissioner shows that the agreement has not been concluded as a result of the Principal´s assignment.
If the assignment refers to financial instruments or other goods that fluctuate rapidly in price, the reported price may not be less favourable to the Principal than what was the usual price when the Commissioner gave his notice pursuant to Art. 4 regarding agreements entered into or when it was satisfactorily documented that the assignment was performed. The message or documentation must state on what day and at what time the message was delivered or the documentation was prepared.
If the Principal is a trader and the assignment does not fall within an area that constitutes an essential part of the business activity, the terms of the agreement which in comparison with this Article are to the detriment of the Principal are without effect against him. However, this does not apply if the Principal is a professional customer according to Chapter 9, Art. 4 or 5 of the Securities Market Act (2007: 528).
Art. 44 provides that a Principal who wishes to demand that another price shall be reported, must notify the Commissioner within a certain time.
Lag (2017: 698).
Art. 21.
The Principal has the right to receive information from the Commissioner about prices that may be relevant in an examination pursuant to Art. 20, second paragraph.
If the Principal is a trader and the assignment does not fall within an area that constitutes an essential part of the business activity, the terms of the agreement which in comparison with this Article are to the detriment of the Principal are without effect against him. However, this does not apply if the Principal is a professional customer according to Chapter 9, Art. 4 or 5 of the Securities Market Act (2007: 528).
Lag (2017: 698).
The Commissioner's right to reject an agreement
Art. 22.
A Principal may reject an agreement entered into by the Commissioner, if
- the Commissioner has acted dishonestly towards the Principal;
- the Commissioner has been negligent in concluding the agreement or thereafter and as a result, the Principal´s interest has been significantly neglected, or
- the Commissioner self-employed in accordance with Art. 19 without the necessary approval from the Principal.
If the Principal is a trader and the assignment does not fall within an area that constitutes an essential part of the business activity, the terms of the agreement which, in comparison with the first paragraph, are to the detriment of the Principal are without effect against him. However, this does not apply if the Principal is a professional customer according to Chapter 9, Art. 4 or 5 of the Securities Market Act (2007: 528).
Art. 44 provides that a rejection of agreements shall be notified to the Commissioner within a certain time.
Lag (2017: 698).
The Principal´s ownership of the commissioned goods
Art. 23.
A Principal remains the owner of goods that have been handed over to the Commissioner for sale until the ownership passes to a third party or, in the case of self-entry, to the Commissioner.
The Principal immediately becomes the owner of goods purchased by the Commissioner on behalf of the Principal.
A claim against a third party due to his agreement with the Commissioner is reserved for the Principal in preference to the Commissioner's creditors.
Third party rights due to the agreement with the Commissioner
Art. 24.
Through the agreement between the Commissioner and third parties, third parties acquire rights against the Commissioner but not against the Principal.
If a third party acquires a certain good, the good is reserved by the agreement to a third party before the Commissioner's creditors.
Art. 25.
If a third party has, as a consumer, purchased a product from a Commissioner, a third party has the right to make the same claim against the Principal due to defects in the product that he or she can make against the Commissioner, if both the Commissioner and the Principal are traders and the conditions in general are such as stated in Art. 46, first paragraph, of the Consumer Purchase Act (1990: 932). Art. 46, second paragraph of the Consumer Purchase Act does not apply in such a case.
A third party who, on the basis of Art. 46 of the Consumer Purchase Act, has the right to make a claim against a Commissioner at an earlier sales level, may make the same claim against his Principal, if the Principal is a trader.
The provisions of Art. 46, third paragraph of the Consumer Purchase Act on claims against traders in the previous sales chain also apply when a third party wishes to bring a claim against someone who is a Principal.
Sale in violation of the Commission agreement
Art. 26.
If the Commissioner has sold to a third party a product which the Commissioner had for sale on terms that were materially contrary to the Principal´s interest, or if the Commissioner has acted dishonestly towards the Principal at the sale, the third party is still entitled to the product if the third party neither knew nor should have known this. The same applies if the Commissioner has sold a product that the Commissioner held on behalf of the Principal, even though the Commissioner's assignment had ended, and the Commissioner was therefore not allowed to sell the product.
If the Commission agreement has been terminated as a result of the Principal being declared bankrupt, a sale made by the Commissioner shall not, due to the second sentence of the first paragraph, have a greater effect on the bankruptcy estate than it would have had if the Principal himself had undertaken it. If the agreement has been terminated as a result of the Commissioner being declared bankrupt, third parties may not invoke a lack of knowledge of the bankruptcy to a greater extent than would have been possible if the goods had belonged to the Commissioner.
The Principal´s right to take over the Commissioner's claims against third parties
Art. 27.
A Principal may take over the claim against a third party due to an agreement that the Commissioner has entered into with a third party on behalf of the Principal. However, in case of a Trade Commission, the Principal may only take over the claim if a third party is in delay with its payment or delivery or if the Commissioner has breached his accounting obligation, acted dishonestly against the Principal or has been declared bankrupt.
Before the Principal may take over the claim against a third party, the Commissioner must be notified. If the Commissioner so requests, the Principal shall also first pay or provide security for such claim on which the Commissioner has a pledge in accordance with Art. 15, third paragraph.
If the Commissioner himself has fulfilled the third party's payment obligation or delivery to the Principal, the Principal may not take over the claim against the third party.
Art. 28.
A Principal who makes a claim against a third party, shall provide security for what a third party may be obliged to pay or deliver to the Commissioner in accordance with Art. 30, first paragraph, if a third party requests such security.
Security under the first paragraph must not be provided if the Principal shows a written consent from the Commissioner stating that the Principal has the right to assert the claim or if the Commissioner has notified a third party of this.
Art. 29.
If a third party has paid or delivered to the Commissioner in order to fulfil the agreement with him, even though the Principal had taken over the Commissioner's claim under Art. 27, the payment or delivery still applies against the Principal, if the third party neither realized nor had reasonable grounds to suspect that the Commissioner could longer assert the claim.
Art. 30.
If a third party has paid or delivered to the Principal in order fulfil the agreement with the Commissioner, even though the Commissioner still had the right to assert the claim, the payment or delivery still applies against the Commissioner insofar as he has not been harmed by the payment or delivery to the Principal.
If the Principal has invoked a written consent from the Commissioner providing that the Principal has the right to assert the claim, or if the Commissioner has given notice thereof to a third party, and it then turns out that the consent or notice was invalid, a third party payment or delivery still applies against the Commissioner if the third party neither realized nor had reasonable grounds to suspect the circumstances which led to the invalidity. However, this does not apply if the legal act was invalid due to any circumstances as set out in Art. 17 of the Debt Securities Act (1936: 81).
Third party's right to set-off
Art. 31.
A third party may offset a counterclaim with the Commissioner against claims from the Commissioner for the payment for sold goods, even if the third party knew at the time the counterclaim arose that the Commissioner was acting on behalf of another party. Offsetting may also be done with a counterclaim by the Principal, insofar as the Commissioner does not suffer damage from such off-setting.
A third party may offset a claim from the Principal for payment of a purchase price with a counterclaim from the Principal. A set-off may also take place with a counterclaim from the Commissioner if the counterclaim was acquired before a third party realized or had reasonable grounds to suspect that the Commissioner was no longer allowed to assert the claim. However, if the counterclaim became due after this time and after the time when the claim against a third party expired, set-off may not take place.
Termination of the Commission agreement
Art. 32.
If the Principal withdraws the assignment or the Commissioner resigns, the Commission agreement terminates, even if the withdrawal or dismissal is unjustified.
Art. 43 contains provisions on damages.
Art. 33.
If a permanent Commission agreement has not been concluded for a certain period, the Commissioner or Principal may terminate the agreement after the notice period specified in the second paragraph.
During the first year of the assignment period, the notice period is one month. The notice period is then extended by one month for each commenced year of the assignment period until the notice period amounts to six months. The parties may however agree that termination by the Commissioner may take place with a notice period of three months, even if the term of office has been three years or longer.
The parties may, after the termination has taken place, agree on a shorter notice period than what is stated in the second paragraph.
If the parties agree on a longer notice period than stated in the second paragraph, the notice period may not be shorter in the event of termination by the Principal than in the case of termination by the Commissioner.
The notice period is calculated as of the end of the calendar month in which the notice was given.
Art. 34.
A Commission agreement that has been concluded for a certain period of time expires at the end of the period of the agreement.
If the parties continue the commission relationship after the end of the period of the agreement, the agreement shall thereafter be considered as an indefinite agreement. In calculating the notice period pursuant to Art. 33 of such an agreement, the entire duration of the commission relationship shall be taken into account.
The terms of the agreement which, in comparison with the second paragraph, are to the detriment of one of the parties, are without effect against him.
Art. 35.
The Commissioner or Principal may terminate the Commission agreement with immediate effect, if
- the counterparty has not performed its obligations under the agreement or this Act and this is of material importance to the other party, and the counterparty knew or ought to have known this, or
- there is another important reason for terminating the agreement prematurely.
The terms of the agreement which, in comparison with the first paragraph, are to the detriment of the Commissioner, are without effect against him.
Art. 45 contains provisions on the notification of termination in accordance with the first paragraph.
Art. 36.
If the Commissioner or Principal is declared bankrupt, the Commission agreement expires.
Notwithstanding the bankruptcy of the Principal, the Commissioner may continue the assignment for the period until the end of the day after the date on which the bankruptcy decision was announced in the Official journal of the Government, if the Commissioner was not previously aware or should have been aware about the bankruptcy.
Art. 37.
If the Commission agreement has been terminated, the Commissioner shall, until the Principal himself can safeguard his interests, take such measures as are necessary to protect the Principal from loss, unless this results in significant costs or inconveniences for the Commissioner. The Commissioner is entitled to a fair remuneration for the measures.
Art. 38.
Upon termination of the Commission agreement, property received by the Commissioner in connection with the assignment, shall be returned to the Principal. The Commissioner may however assert his right of security and right to stop according to Art. 15–18.
A Trade Commissioner's right to severance payment
Art. 39.
Once a permanent Commission agreement has expired, a Trade Commissioner is entitled to severance payment, to the extent that
- the Commissioner has brought new customers to the Principal or has significantly increased trade with the existing clientele and the Principal will benefit significantly from this, and
- a severance payment is reasonable in the circumstances, in particular the Commissioner's loss of commission on agreements with the customers specified in nr. 1 above.
The severance payment shall amount to a maximum sum which corresponds to one year's commission, calculated on the basis of an average over the past five years or the shorter period that the assignment has lasted.
The terms of the agreement which, in comparison with this Article, are to the detriment of the Commissioner, are without effect against him.
Art. 40.
A Trade Commissioner is not entitled to severance payment according to Art. 39, if
- the Principal has terminated the Commission agreement because the Commissioner has intentionally or through negligence seriously breached his obligations towards the Principal and the breach gives the Principal the right to terminate the agreement with immediate effect in accordance with Art. 35, first paragraph 1, or
- the Commissioner, in agreement with the Principal, has delegated the commission assignment to someone else.
The terms of the agreement which, in comparison with the first paragraph, are to the detriment of the Commissioner, have no effect against him.
Art. 41.
A Trade Commissioner who has terminated a Commission agreement is entitled to severance payment in accordance with Art. 39, only if
- the termination is based on circumstances on the part of the Principal which entitles the Commissioner to terminate the agreement with immediate effect in accordance with Art. 35, or
- due to the age or illness of the Commissioner or similar circumstances, the Commission's activities cannot reasonably be required to continue.
The terms of the agreement which, in comparison with the first paragraph, are to the detriment of the Commissioner, have no effect against him.
Art. 42.
A Trade Commissioner who, within one year of the termination of the Commission agreement in a notice to the Principal, does not claim the right to severance payment, loses his right to such compensation.
The terms of the agreement which, in comparison with the first paragraph, are to the detriment of the Commissioner, have no effect against him.
Damages
Art. 43.
A Principal or Commissioner who has not fulfilled his obligations under the Commission agreement or this Act shall compensate the other party for the damage thereby caused, unless he shows that this was not due to negligence on his part.
If the Commission agreement has terminated as a result of the bankruptcy of one party, the other party is entitled to compensation for the damage thereby caused.
Art. 45 contains provisions that claims for damages must be notified to the other party within a certain time.
Notice of price report and rejection
Art. 44.
A Principal who wishes to demand a price other than that reported by the Commissioner, must notify the Commissioner within a reasonable time and no later than two years after the Principal realized or should have realized the circumstances on which the claim is based
A Principal wishing to reject an agreement shall notify the Commissioner immediately after the Principal has realized or should have realized the circumstances on which the rejection is based.
The first and second paragraphs do not apply if the Commissioner has acted with gross negligence or in breach of good faith.
Notice of termination and damages
Art. 45.
A Commissioner or Principal who, pursuant to Art. 35, wishes to terminate the Commission agreement with immediate effect or claim damages pursuant to Art. 43, shall notify the other party within a reasonable period of time and no later than two years after that party realized or should have realized the circumstances upon which the termination or claim is based. However, this does not apply if the other party has acted with gross negligence or in breach of good faith.
The risk of certain notifications
Art. 46.
If a notification from the Commissioner pursuant to Art. 3, 42 or 45 or a notification from the Principal pursuant to Art. 44 or 45 has been sent in an appropriate manner, the notification may be invoked even if it has been delayed, distorted or not received.
Limitation
Art. 47.
Regarding limitation, the Prescription Act (1981: 130) applies.
Competition clause
Art. 48.
An agreement between the Commissioner and the Principal providing that the Commissioner shall not conduct business after the termination of the Commission agreement (non-compete clause) is binding on the Commissioner, only
- if the non-compete clause has been drawn up in writing, and
- in so far as the non-compete obligation relates to the territory or clientele assigned to the Commissioner and the type of goods to which the Commission agreement applies.
Notwithstanding the first paragraph 1, the Commissioner may invoke an oral agreement on facilitation of a non-compete clause.
The Commissioner is not bound by a non-compete clause for more than two years as of the termination of the Commission agreement.
This Article does not prevent the Act (1915: 218) on agreements and other legal acts in the field of property law from being applied to a non-compete clause.