Commercial agency: sub-agents and employees

Spanish Agency Act states in its article 5 that an agent has to act personally or with its employees. The agent can also appoint sub-agents but, in this case, the agent needs the express authorisation of the principal.

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In this procedure, the principal argued that the agent had appointed two sub-agents without his express authorisation and, therefore, he had breached his legal obligations. The agent, on his side, considered that these two persons were not sub-agents but employees. The High Provincial Court of Burgos in a Judgment of June 13, 2014 has specified some elements to take into account in order to distinguish “sub-agents” from “employees”.

According to the Court, the principal knew and accepted that the agent was helped by two persons but nothing in the procedure proved that these persons had an independent organization from the agent’s and evidences showed, instead, that they were part of the agent’s commercial organization: some mails included these persons as members of the agent’s commercial department and according to some witnesses they acted as employees of the agent.

The Court has stated, therefore, that in order to verify if a person is acting as a sub-agent instead of as a employee, it should be verified if this person has an independent organization or if this person is acting as a part of the agent’s commercial structure.

Ignacio Alonso

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