Agency agreements are regulated by Presidential Decree 219/1991 as amended, which implements the provisions of Council Directive 86/653.
Distribution agreements and franchise agreements are not governed by specific laws in Greece. The parties have wide discretion in building contractual relationships.
Greek Civil Code.
The Greek courts ruled that PD 219/1991 can be applied to distribution agreements in the following circumstances (indicative):
- the distributor acts as part of the supplier’s trading organization, having the same weak position and strong dependence on the supplier as the commercial agent, and the same degree of integration into the supplier’s network;
- the distributor contributes to the expansion of the supplier’s clientele by taking on duties similar to those of a commercial agent;
- the distributor assumes obligations to prevent competition;
- the distributor has a specially protected area;
- the supplier knows the distributor’s clientele, and upon the termination of the distribution agreement, the distributor will provide the supplier with a list of its customers.
There are no self-regulatory restrictions in the industry that would govern distribution agreements. The only exception is the Code of Ethics for Franchise Agreements, a self-regulatory tool of the Greek Franchise Association. The provisions of the Code of Ethics are binding on the members of the Greek Franchising Association but are not legally binding.
Some suppliers and distributors have developed and implemented their own codes of ethics and business conduct regarding the distribution of their products.
Termination of distribution agreements
The general principles of Greek civil law apply to the termination of distribution contracts. For fixed-term agreements, termination occurs after the agreed period or if there is a valid reason for termination. Contracts for an indefinite period can be terminated at any time; however, goodwill and other criteria such as the duration of the agreement may affect the validity of the termination.
If PD 219/1991 is applicable, paragraphs 3 and 4 of Article 8 provide that:
if the contract is concluded for an indefinite period, either party can terminate it by notification. The notice period is one month for the first year of the contract, two months for the beginning of the second year, three months for the beginning of the third year, four months for the beginning of the fourth year, and five months for the beginning of the fifth year, and six months. for the sixth year started and subsequent years. The parties may not agree on shorter notice periods.
Termination of agency agreements
According to article 9 PD 219/1991: the agent, after the termination of the agency agreement, is entitled to a refund if and to the extent that he has attracted major new clients or significantly increased the volume of business with existing clients, and the principal continues to receive significant benefits from the business relationship with such customers, and the payment of this consideration is fair in all circumstances and in particular the commission (profit) lost by the distributor as a result of transactions with such customers.
The agent must notify the principal of this within one year of the termination of the agreement.
If the agency contract is terminated for good reason by the supplier, the latter is not responsible for such a refund.