Is the arrangement truly commercial agency?
Under the Polish Civil Code, agency involves an independent business continuously negotiating contracts with customers for another business, for remuneration, or concluding those contracts in the principal's name. The substance and continuity of the work matter more than the label.
An agent differs from a distributor, which generally purchases products and resells them in its own name, bearing stock and margin risk. A one-off referral arrangement may lack the required continuing character. Classification affects commission, notice and post-termination settlement and should therefore be resolved before individual clauses are drafted.
Can the agent sign contracts and receive customer communications?
The agent may conclude contracts and receive declarations for the principal only where authority has been granted. The agreement and power of attorney should distinguish negotiation from representation and set price, discount, template and approval limits.
Polish law also contains default assumptions concerning receipt of payments, performance and communications about defects or contract performance. The operational process must match the documents, so customers understand whether the agent may negotiate, sign, receive a complaint or collect money.
There is additional risk where an agent exceeds authority and the principal, once informed, fails promptly to tell the customer that the contract is not confirmed. The Civil Code may then treat it as confirmed.
How should commission and direct sales be defined?
The commission formula should address net or gross value, discounts, returns, ancillary charges, currency, conversion and customer non-performance. It should also define when a customer is introduced and how sales are attributed across channels.
With territorial or customer exclusivity, commission may be due on sales made without the agent's involvement. The principal should decide whether exclusivity includes its online shop, global framework clients, pre-existing accounts and other partners.
Commission may also arise after termination where the proposal was received earlier or the transaction is predominantly attributable to the agent's work and concluded within a reasonable time. Reporting therefore needs to continue through the post-termination pipeline.
Which duties require operational detail?
Both parties owe loyalty. The agent must communicate material information, follow justified instructions and protect the principal's rights. The principal must provide necessary documents and information, report acceptance or rejection of proposals and warn the agent if expected transaction volume or value will be materially lower than reasonably anticipated.
The agreement should translate these duties into CRM use, reporting, ownership and handover of customer data, material approvals, compliance standards and conflicts. Del credere liability — responsibility for customer performance — requires a specific written arrangement and separate remuneration.
How can the agreement be terminated and the final commission settled?
An indefinite agreement is subject to at least one month's notice during the first year, two months during the second and three months during the third and subsequent years. Those periods cannot be shortened. They may be extended, but the principal's notice cannot be shorter than the agent's.
Termination without notice is possible for total or substantial non-performance or extraordinary circumstances. Before relying on it, a party should document the ground and assess potential damages.
Termination does not automatically close commission. The contract needs a final report, treatment of active negotiations, later contracts and customer handover. A post-termination non-compete must be in writing, properly limited and no longer than two years. Polish law defaults to appropriate monetary compensation, while allowing a different contractual arrangement.
When may the agent claim a goodwill indemnity?
The agent may claim an indemnity if it brought new customers or materially increased business with existing customers, the principal continues to derive substantial benefits and payment is equitable. The statutory cap is one year's remuneration calculated by reference to the applicable annual average; it is a ceiling, not an automatic award.
The agent must notify the claim within one year after termination. Before termination, the parties cannot contract out of the statutory protection to the agent's detriment. A principal should therefore budget for potential indemnity rather than assume all cost ends with the notice period.
What changes in a cross-border arrangement?
A foreign manufacturer using a Polish agent should expressly coordinate governing law, courts or arbitration and language. Rome I permits a contractual choice of law, but it should not be treated as a mechanical route around all mandatory protection.
For sales of goods, Directive 86/653/EEC is also relevant. EU law treats its termination protection as mandatory within its scope. The review should account for the agent's place of business, whether goods or services are sold, the market and the selected forum.
How the issue appears in practice
Hypothetical example: a foreign manufacturer and Polish online sales
Hypothetical example: a foreign manufacturer and Polish online sales A German equipment manufacturer appoints a Polish agent exclusively for Poland at 8% commission. The contract does not reserve the manufacturer's online shop or centrally managed customers. After two years, many customers originally developed by the agent order directly online. The manufacturer denies commission because the agent did not process the final order and then gives one month's notice. The risk arises from imprecise exclusivity and failure to account for Polish agency rules. The contract should allocate channels and pre-existing accounts, define attribution and reporting, observe statutory notice and settle the pipeline. The manufacturer should also assess potential goodwill indemnity for the customer base from which it continues to benefit.
Matters to determine or verify before proceeding
- Is the true model agency, distribution, commission agency or occasional referral?
- Does the agent introduce, negotiate, sign, receive declarations or collect payments?
- How is commission calculated for discounts, returns, partial performance and customer default?
- Does exclusivity include e-commerce, global accounts, existing customers and other channels?
- How is attribution recorded and how will the post-termination pipeline be settled?
- Do notice and immediate-termination grounds comply with the applicable rules and business model?
- Is any non-compete properly documented, limited and addressed financially?
- Which law, forum, language and indemnity rules apply to the cross-border relationship?
Key issues at a glance
| Issue | Key information |
|---|---|
| Agent or distributor | An agent negotiates or contracts for the principal; a distributor generally buys and resells in its own name. |
| Authority | Binding the principal requires authority aligned with the actual sales process. |
| Exclusivity | It may create commission on transactions within the territory or customer group even without the agent's involvement. |
| Indefinite-term notice | At least 1 month in year one, 2 in year two and 3 from year three; the periods cannot be shortened. |
| Goodwill indemnity | Depends on customers, continuing benefits and equity; the claim must be notified within one year. |
| Post-term non-compete | It must be written, properly limited and may last no more than two years. |
Legal basis
- Polish Civil Code of 23 April 1964, in particular Articles 758–7649.
- Council Directive 86/653/EEC of 18 December 1986 on the coordination of the laws of the Member States relating to self-employed commercial agents.
- Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I).
This article provides general information and does not constitute legal advice for a specific matter. The appropriate solution depends on the facts, documents and business objective.
Summary
A commercial agency agreement must align the sales process with statutory commission and termination rules. Common disputes concern direct sales, customers developed before termination, insufficient notice and goodwill indemnity. ---