Restraint of Trade Clauses in Commercial Agency Contracts: A Comparative Perspective

Abstract

Commercial agency is an important concept in domestic and international trade. Commercial agency is a viable solution for merchants who would like to extend their network of sales and service while cost of a commercial agent is usually less than hiring sales personnel or doorstep salesmen or opening up a branch in a different location. On the other hand, it is always easier and less costly to promote their goods and service in a foreign country for exporters. Several problems may arise after termination of commercial agency contracts. One of these problems is commercial positions of principal (merchant) and commercial agency after termination of contract. Principal has a certain interest in protection of his goodwill and clients while (former) commercial agent may still engage with clients of his (former) principal either on his own account or as a commercial agent of another opponent of (former) principal. Restraint of trade clause in commercial agency contracts can be defined as noncompetition agreements after termination which obliges (former) commercial agent not to compete with (former) principal. Legal provisions regulating restraint of trade clause in several different legal systems are going to be analyzed in our study.