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* LEGAL    ARTICLE *

 

Does termination of Commercial Agencies entitled Kuwaiti Agent to a compensation??

 

 

Commercial agencies is considered as on of the main paths of foreign companies to enter into the Kuwait Market. Commercial Agencies in Kuwait are governed by Law No. (36) of (1964) on the regulation of Commercial Agencies, and Articles (260-296) if the Kuwaiti Commercial code. The law provides registration of Commercial Agencies with the Ministry of Commerce & Industry to be enforceable in Kuwait.

Types of Commercial Agencies:

The Kuwaiti Law recognizes three types of Commercial Agencies, which are as follows:

Firs type: The first type of Commercial Agencies is a Contracts Agency as per Article (271) of the Commercial Code. Under this type, the local agent shall promote the principal's business in the territory as well as conducting transactions in the name of principal I return for a fee.

In accordance with Article (274) of the Commercial Code, the agreement of Contracts Agency shall include: the territory covered, the Agent's fees, the Agency Term, the product that is subject of the agency, and any relevant trademark. Contracts Agent may not represent more than on principal if those are competing in the same activity. If an agent establishes showrooms, workshops, or warehouse facilities, the contact shall be valid for a period not less than five years.

Second Type: the second type of Commercial Agencies is a distributorship agency. Under this type of agency, local agent acts as a distributor for the principal's products I a certain territory.

Third Type: as per Articles (287) to (296) of the Kuwaiti Commercial Code, the third type of Commercial Agencies is the Commission Agency, under this type of agency, an agent enters into contracts in its own name, and the principal's name may not be disclosed without its consent.

Compensation of an Agent:

The Kuwait legislator considers in regulating commercial agencies, the effort of the local agent in promoting the product of the principal and the expenses that an agent may incur.  As such the Kuwaiti Law limits the authority of principal to terminate or refuse renewal of the agency by the default of an agent. Otherwise, the principal has to pay equitable compensation to an agent.

The legislator also, differentiates I entitlement to compensation between termination and nor-renewal of agency. In the first case, an agent is entitled to a compensation if principal fail in proving an agent's  default while in the second case, an agent bears the burden of proof: an agent shall prove that he is not in default.




 

* LEGAL    ARTICLE *

 

Does termination of Commercial Agencies entitled Kuwaiti Agent to a compensation??

 

 

Commercial agencies is considered as on of the main paths of foreign companies to enter into the Kuwait Market. Commercial Agencies in Kuwait are governed by Law No. (36) of (1964) on the regulation of Commercial Agencies, and Articles (260-296) if the Kuwaiti Commercial code. The law provides registration of Commercial Agencies with the Ministry of Commerce & Industry to be enforceable in Kuwait.

Types of Commercial Agencies:

The Kuwaiti Law recognizes three types of Commercial Agencies, which are as follows:

Firs type: The first type of Commercial Agencies is a Contracts Agency as per Article (271) of the Commercial Code. Under this type, the local agent shall promote the principal's business in the territory as well as conducting transactions in the name of principal I return for a fee.

In accordance with Article (274) of the Commercial Code, the agreement of Contracts Agency shall include: the territory covered, the Agent's fees, the Agency Term, the product that is subject of the agency, and any relevant trademark. Contracts Agent may not represent more than on principal if those are competing in the same activity. If an agent establishes showrooms, workshops, or warehouse facilities, the contact shall be valid for a period not less than five years.

Second Type: the second type of Commercial Agencies is a distributorship agency. Under this type of agency, local agent acts as a distributor for the principal's products I a certain territory.

Third Type: as per Articles (287) to (296) of the Kuwaiti Commercial Code, the third type of Commercial Agencies is the Commission Agency, under this type of agency, an agent enters into contracts in its own name, and the principal's name may not be disclosed without its consent.

Compensation of an Agent:

The Kuwait legislator considers in regulating commercial agencies, the effort of the local agent in promoting the product of the principal and the expenses that an agent may incur.  As such the Kuwaiti Law limits the authority of principal to terminate or refuse renewal of the agency by the default of an agent. Otherwise, the principal has to pay equitable compensation to an agent.

The legislator also, differentiates in entitlement to compensation between termination and nor-renewal of agency. In the first case, an agent is entitled to a compensation if principal fail in proving an agent's  default while in the second case, an agent bears the burden of proof: an agent shall prove that he is not in default.




Practices


  • CORPORATE & COMMERCIAL: CONTRACTS & INSOLVENCY.
  • CORPORATE GOVERNANCE AND REGULATORY COMPLIANCE.
  • CORPORATE TAXATION.
  • DEBT COLLECTION (COLLECTING BILLS, CHEQUES AND DEBTS).
  • E-COMMERCE, MEDIA LAWS & IT; INTELLECTUAL PROPERTY RIGHTS.
  • EMPLOYMENT, LABOUR & SOCIAL AFFAIRS LAW.
  • ENERGY, OIL, GAS, PETROCHEMICALS AND PRIVATIZATION, PROJECT FINANCING & INFRASTRUCTURE.
  • ENVIRONMENTAL LAW
  • ISLAMIC BANKING AND ISLAMIC FINANCIAL SERVICES.
  • LITIGATION AND ARBITRATION.
  • MARITIME, SHIPPING AND TRANSPORTATION.
  • MERGERS, ACQUISITIONS, AMALGAMATIONS, DISINVESTMENTS AND BUSINESS STRUCTURES.
  • PUBLIC & PRIVATE TENDERS; CONSTRUCTION AND ENGINEERING.
  • REAL ESTATE DEVELOPMENT AND FINANCE.
  • THE LEGAL DOCUMENTS TRANSLATION.
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