Appointing an Italian commercial agent: indemnity on termination and checks
Updated to
In short: when an agency contract with an Italian agent ends, the principal may owe the agent an indemnity under art. 1751 of the Italian Civil Code, capped at one year's average remuneration over the last five years, and the article cannot be waived to the agent's disadvantage. The UK's 1993 agents regulations are framed around agents' activities in Great Britain, so do not assume they govern an agent in Italy. Check who the agent is, and who owns it, before you sign.
Part of the guide Checking an Italian company: a guide for UK businesses after Brexit. All guides: Guides.
What does art. 1751 of the Civil Code provide?
On termination, the principal must pay the agent an indemnity if two conditions are met. First, the agent brought the principal new customers or significantly developed business with existing ones, and the principal still receives substantial benefits from that business. Second, payment is equitable in all the circumstances, in particular the commissions the agent loses on business with those customers. The text also sets out the limits (Normattiva: Civil Code, art. 1751):
- no indemnity where the principal terminates for a breach by the agent so serious that it prevents even provisional continuation, where the agent withdraws (unless justified by circumstances attributable to the principal, or to the agent's age, infirmity or illness), or where the agent assigns the contract to a third party under an agreement with the principal;
- the amount may not exceed one year's indemnity calculated on the agent's average annual remuneration over the last five years, or over the shorter period if the contract is younger;
- paying the indemnity does not remove the agent's right to claim damages;
- the agent loses the right if, within one year of the end of the relationship, they do not tell the principal they intend to pursue it;
- the article cannot be derogated from to the agent's disadvantage, and the indemnity is due even if the relationship ends on the agent's death.
The rule has an EU counterpart. Article 17 of Directive 86/653/EEC has the same structure: indemnity or compensation for damage, the one-year cap, damages preserved, and loss of the right if no notice is given within one year (EUR-Lex: Directive 86/653/EEC, Article 17).
Does a UK governing-law clause solve this?
Not safely. The UK's Commercial Agents (Council Directive) Regulations 1993 govern relations between commercial agents and principals and, in their own words, apply in relation to the activities of commercial agents in Great Britain (legislation.gov.uk: SI 1993/3053, regulation 1). They are not drafted for an agent who works in Italy. Equally, art. 1751 states that it cannot be departed from to the agent's disadvantage. Which law a court applies, and whether a clause choosing English law reduces the indemnity, are questions for counsel in both countries. Budget for the end-of-contract payment when you price the agency, and do not rely on a clause to remove it.
This guide deals with agents. A distributor buys and resells in its own name, and the position depends on the contract and on advice, not on art. 1751 as such.
How do you vet an Italian agent?
An agent is paid on commission, so the checks are mainly about identity, standing and links.
| Question | If the agent is a company | If the agent is an individual |
|---|---|---|
| Who exactly is the counterparty? | Verification (€19): company, owners, directors | Person Verification (€29) |
| Any protests or insolvency proceedings? | Included, or €5.90 as a stand-alone report | Included in Person Verification |
| Other positions, shareholdings and links? | Decision (€49) | Extended Person Verification (€49) |
| Is the contact genuine? | Free anti-scam check on the VAT number, email domain, website and IBAN | |
A good agent should not mind this. The reports are in Italian, from Italian official sources, and the person checks are available for a contract in progress or about to begin with a natural person, on a declared purpose; see Checking an Italian individual for the UK GDPR side.
The wider UK compliance angle
A large UK organisation may be liable if an agent commits a fraud to benefit it, subject to a defence of reasonable prevention procedures; a documented check on the agent is part of that file. See Failure to prevent fraud: Italian suppliers and agents, and UK sanctions and an Italian company for the ownership question.
What to put in the agency contract
- The agent's exact legal identity, tax number and registered address.
- Clear definitions of territory, products, commission and the customers that were the agent's own.
- Compliance obligations and the right to terminate for breach, as the Home Office guidance suggests for contracts with agents.
- A calendar reminder to review the relationship and the check before renewal.
Frequently asked questions
Is an Italian agent entitled to an indemnity when the contract ends?
It can be. Art. 1751 of the Civil Code gives an indemnity if the agent brought new customers or significantly developed business and the principal still benefits, and payment is equitable. It is capped at one year's average remuneration over the last five years.
Can the agency contract exclude the indemnity?
Art. 1751 says its provisions cannot be derogated from to the agent's disadvantage. Whether a governing-law clause changes the result is a question for counsel.
Do the UK Commercial Agents Regulations 1993 apply to an agent in Italy?
They apply in relation to the activities of commercial agents in Great Britain, according to regulation 1. Do not assume they govern an agent working in Italy.
Which Veryfy report suits an Italian agent?
For an agent that is a company, Verification (€19) or Decision (€49). For an individual agent, Person Verification (€29) or Extended Person Verification (€49). All come with a free anti-scam check.
Sources
Official sources opened and read on 2026-10-26.
- Normattiva: Civil Code, art. 1751 (indemnity on termination)
- EUR-Lex: Council Directive 86/653/EEC on self-employed commercial agents
- legislation.gov.uk: Commercial Agents (Council Directive) Regulations 1993, regulation 1
- GOV.UK: offence of failure to prevent fraud introduced by ECCTA
General information, not legal advice. Sources verified on 2026-10-26.
Frequently asked questions
Is an Italian agent entitled to an indemnity when the contract ends?
It can be. Art. 1751 of the Civil Code gives an indemnity if the agent brought new customers or significantly developed business and the principal still benefits, and payment is equitable. It is capped at one year's average remuneration over the last five years.
Can the agency contract exclude the indemnity?
Art. 1751 says its provisions cannot be derogated from to the agent's disadvantage. Whether a governing-law clause changes the result is a question for counsel.
Do the UK Commercial Agents Regulations 1993 apply to an agent in Italy?
They apply in relation to the activities of commercial agents in Great Britain, according to regulation 1. Do not assume they govern an agent working in Italy.
Which Veryfy report suits an Italian agent?
For an agent that is a company, Verification (€19) or Decision (€49). For an individual agent, Person Verification (€29) or Extended Person Verification (€49). All come with a free anti-scam check.
Want to check a specific company?
Credit limit, beneficial owner and warning signs, in minutes.
Check the agent before you sign