Cyprus - Andreas Neocleous & Co

CYPRUS
CYP/21
Part IV of the Regulation of Relations Law makes provision for the execution
and expiration of the commercial agency agreement. It imposes an obligation on
both parties to contract and sign a written agreement which determines the terms
of the commercial agency agreement and any other subsequent terms which are
to be agreed.
It is important to note that the Regulation of Relations Law will govern
commercial agency agreements which were not in writing and which were
agreed before the Regulation of Relations Law came into force.
The following will determine whether the contract between principal and agent
will fall within the ambit of the Regulation of Relations Law:
• The Contract Law and the principles of common law will apply to an
agreement made in writing prior to July 1992;
• All of the provisions of the Regulation of Relations Law will apply to an
agreement made prior to July 1992 but not in writing; and
• The Regulation of Relations Law will apply to a written agreement made
after 1992.
Where the parties continue to implement a fixed-term commercial agency
agreement after its expiration, this is considered as becoming a commercial
agency agreement of an indefinite duration.
If a commercial agency agreement is for an indefinite period, any party may
terminate it on account of the failure of the other party to perform all or any of
its obligations, by giving a written notice. The period of this notice must be the
same for both parties and is specified in the Regulation of Relations Law as
being one month for the first year of the agreement, two months for the second
year, three months for the third year, four months for the fourth year, five
months for the fifth year and six months for the sixth and subsequent years.
When calculating the above period of notice for repudiation, any previous fixed
term is also taken into account. It is not possible for the parties to agree to a
shorter period for notice of termination, but the parties can agree longer periods
for notice of termination provided the notice to be given to the principal is not
shorter than that to be given to the commercial agent. Unless the parties have
agreed differently, the notice period must expire at the end of a calendar month.
There have been no reported cases concerning the Regulation of Relations Law.
However, because it incorporates verbatim the text of the 1986 EEC Directive,
any interpretation given by the European Court of Justice may be relied on as
useful guidance.
Where the Regulation of Relations Law is inapplicable (for example, because of
its narrow definition section), the courts will apply the Contract Law and the
principles of common law to determine what would constitute a 'reasonable
period of notice'. In applying these principles a judge would, of course, exercise
his discretion and much will depend on how he views the merits of the case as a
whole.
(Release 2 – 2013)