Termination of Commission Agency Contracts in Commercial Law

Lecture 5 Termination of the Commission Agency Introduction: The commission agency, being a commercial agency, is governed, in its creation and termination, by the general rules applicable to the contract of agency in civil law, in addition to rules applicable thereto by virtue of Bahrain Law of Commerce and Bahrain Commercial Agencies commission agency following circumstances: Law, terminates hence the the in

Lecture 5 Termination of the Commission Agency Q : clarify the case of terminate commission agency? 1 - Demise of Principal / Agent :- 1. This contract, like other agency contracts, is based on personal consideration, highlighted by the reciprocal trust between the principal and the agent. It follows, therefore, that when either of the parties dies that consideration collapses and with it goes the agency. Subsequently, when the principal dies the contracts concluded between the agent and the third parties remain valid and attached to the principal represented by his heirs, provided that both the agent and the third party contracted in good faith where neither of them is aware of the agency termination.

Lecture 5 Termination of the Commission Agency The demise of either the principal or the agent, however, would not preclude the validity of the agency contract towards the heirs if they accepted it, due to the fact that termination of the commission agency contract is not part of the public order; in addition, the several number of agents and the demise of one of them shall not affect the validity of the contract of agency in respect of others, an example of which is where one of several principals dies; in which case the agency termination in his part only unless the agency is not proportionable. 2-

Lecture 5 Termination of the Commission Agency 2 - Incapacity of Principal / Agent :- While performing as a principal or as an agent, it is possible that either may be subjected to a mental deficiency or contracting a disease which turns him incapable to conduct his obligations, such aphrenia, insanity or prodigality, a symptom which has to be affirmed by a court decision interdicting either of them; in which case the agency terminates, but where the commission agent is unaware of the principal's interdiction, the agency continues.

Lecture 5 Termination of the Commission Agency 3- Fulfillment of Agency Purpose: The commission agency dies in a natural death in two cases, the first is by completing the work entrusted to the commission agent by the principal. By so doing the commission agent satisfied the obligations created by the commission agency contract, whereby the contract should have exhausted its purposes. The commission agency comes to an end as well when the duration of the agency in definite in a number of months or years agreed upon; it is also definite when it is limited to the life of either the commission agent or the principal and terminates by the demise of either of them.

Lecture 5 Termination of the Commission Agency Retirement /Discharge of Principal or Commission Agent:- The civil legislator established a general rule whereby the principal is entitled to discharge the agent, or to reduce his authority notwithstanding any agreement to the contrary. But where such discharge affects the third parties' rights or the agent's interests in that agency, then the principal shall not be entitled to revoke the agency or restrict it without the approval of the person to whose interest the agency was issued. 4-