Czech Republic
- The legal regulation of commercial agency is embedded in Act No. 89/2012 Coll., the Civil Code, as amended, (hereinafter as the “Civil Code”), specifically Sections 2483 to 2520 (§ 2483–2520). Czech regulation is fully harmonized with Council Directive 86/653/EEC of December 18, 1986 on the coordination of the laws of the Member States relating to self-employed commercial agents. General provisions of the Civil Code on obligations and contract law apply complementarily to aspects not explicitly covered by the specific agency sections.
- No, collective agreements applicable to commercial agents do not exist in the Czech Republic. Under the Czech law, a commercial agent is strictly defined as an independent entrepreneur (self-employed person). The relationship between the principal and the agent is a business-to-business (B2B) relationship governed by the Civil Code, not the Labour Code. Collective bargaining and collective agreements are legal instruments reserved exclusively for employment relationships (employer vs. employees). Consequently, there are no industry-wide or mandatory collective agreements that would regulate commissions, notice periods, or other terms for independent commercial agents.
- Under the Czech Civil Code, a commercial agent is entitled to a “special reward” (indemnity) if he acquired new customers or significantly increased business with existing ones, and the principal continues to derive substantial benefits from these contacts. The payment must also be equitable considering all circumstances, such as lost commissions. This claim is not automatic and must be exercised within one year of termination, otherwise it expires. The amount is capped at the agent’s average annual commission over the last five years. However, the right is excluded if the principal terminated the contract due to the agent’s breach, if the agent resigned without justification, or if the contract was assigned to a third party.
- As mentioned above, the commercial agent must notify the principal that he is claiming the “special reward” (indemnity) within one year from the date the agency agreement was terminated.
This is a preclusive (extinctive) period. If the agent fails to notify the principal within this one-year timeframe, the right to the indemnity extinguishes (expires) completely. It is not sufficient to merely have the right; the intent to exercise it must be explicitly communicated to the principal. No specific formal requirements for the notice are strictly prescribed, but a written notification is highly recommended for evidentiary purposes.
- Olga Vávrová (olga.vavrova@samak.cz)
