Cyprus - Andreas Neocleous & Co

CYP/16
INTERNATIONAL AGENCY AND DISTRIBUTION LAW
According to the Regulation of Relations Law, every part of the remuneration
that fluctuates according to the number and the value of the transactions will be
considered as constituting commission. The remuneration may be in the form of
commission or fixed amount or both.
In cases of remuneration in the form of commission, the Regulation of Relations
Law sets out the circumstances in which the commercial agent is entitled to a
commission in respect of transactions contracted during the commercial agency
agreement and those contracted after expiration of the commercial agency
agreement.
An agent is entitled to commission during the agreement where:
• The transaction was secured by the mediation of the commercial agent;
• The transaction was contracted with a third party which the commercial agent
had secured earlier as a client for transactions of a similar kind; or
• The agent was appointed to cover a particular geographical area and/or
particular group of people, and the transaction was contracted within the same
geographical area, or with a person belonging to the specified group even if,
for the transaction, negotiations were carried out by another person than the
commercial agent or a different agreement was contracted by the commercial
agent.
An agent is entitled to commission after expiration of the agreement:
• If the transaction is mainly due to the activity he developed himself during the
duration of the agreement; or
• If the order of the third party came to the commercial agent or the principal
before the expiration of the commercial agency agreement.
In all cases, the test is whether, as a matter of construction of the agency
contract, the parties intended that the agent was entitled to be paid commission
after termination. The older authorities held that there must be clear and
unequivocal words to entitle the agent to such commission, but this has been
doubted; it seems that the normal rules of the implication of terms into a contract
must be applied. Commission may be shared between the previous and the
present commercial agent, if it is just and right in the circumstances.
According to section 11 of the Regulation of Relations Law, a right to
commission arises as long as one of the following requirements is met:
• The principal executed the act;
• The principal ought to have executed the act or the agreement which was
contracted with the third party; or
• The third party executed the act.
The right to commission is created, at the latest, when the third party executes
his part of the transaction or the part he should have executed if the principal
(Release 2 – 2013)