The Gazette 1987

JANUARY/FEBRUARY 1987

GAZETTE

mation, to keep principals' money separate from his own, to keep proper accounts (Art.5); (c) to protect commercial or indus- trial secrets (Art.6); (d) permitting the agent to carry on other activities provided they do not conflict with his obligations to his principal (Art. 7); (e) entitling the agent to indemni- ty by his principal for any claim for damage if the claim results from a breach of industrial, commercial or other rights by the principal (Art. 8); (f) delegating to the agents authority to represent the prin- cipal (Art.9); (g) obliging the principal to act in good faith and assist the agent (Art 10); (h) defining agent's right to remuneration and the cir- cumstances in which the en- titlement arises (Articles 11, 12, 13, 15, 16, and 17); (i) providing for Special Commis- sion where agent is obliged to collect monies for his principal (Art. 14); (j) principal's obligation to provide a statement of account monthly (Art. 18); (k) agent's right to indemnity even where principal fails to make full use of his services and his right to reimbursement of ex- penses (Art. 19 & 20); (i) special provision for del credere agents; (m) right of each party to receive written statement of terms of contract and of its termination (Arts. 23 & 24); (n) definition of date of termina- tion of contract for a specific term (Art. 25) and of contract for an indeterminate period (Art. 26) which shall not be less than six months; (o) circumstances in which either party may terminate (Art. 27); (p) provisions dealing with agent's

The Directive provides five defences to the "strict liability" principle and also provides for con- tributory negligence on the part of the injured person. Practitioners are referred to the comprehensive article on the Direc- tive by Mr. William Binchy in the March & April 1986 issues of The Law Society Gazette for further information.

E.E.E. Directive on Product Liability

E.E.C. Directive on Self Employed Commercial Agents

The E.E.C. has issued a Directive on Product Liability which has important implications for Irish Law. The Directive, which requires member States to bring in the laws and regulations necessary to com- ply with its provisions not later than the 30th July, 1988, sup- plements the existing remedies in tort and contract. The essence of the Directive is that the producer shall be liable for damage caused by a defect in his product. Liability is based, not on wrongful conduct by the producer, but merely on proof of the fact that a defect in the product caused the plaintiff damage. Under Article 6 a product is defective when it "does not provide the safety which a person is entitled to expect" tak- ing all circumstances into account. As the key word is safety, products that are safe but shoddy do not fall within the scope of the Directive. Articles 2 & 3 define "produc t" and "producer" and the onus of proof is clearly on the injured person. A general limitation period of 3 years, to run from the day on which the Plaintiff became aware or should reasonably have become aware, of the damage, the defect and the identity of the producer, will apply to proceedings for damages under the Directive. However, the rights of an injured person are to be extinguished on the expiry of 10 years from the date on which the producer put the product into circulation — unless proceedings have been instituted in the meantime.

Present Progress of Directive The E.E.C. Commission first sub- mitted this draft Directive to the Council in January, 1979. The pro- posal was intended to eliminate distortion of competition arising because of different national laws relating to agency arrangements. In our jurisdiction such contracts are not constrained either by Statute or custom and practice. In Civil Law jurisdictions agents have rights, particularly rights arising on ter- mination of agencies, which do not arise here. The Directive was adopted by the E.E.C. in December, 1986, and must be implemented in Ireland by 1 January, 1994. When implemented it will have a significant impact on the relations between agents and their principals as it will not be possible to contract out of certain provisions including those which will entitle the agent to minimum compensation on the termination of his contract. The Directive provides effective- ly a model contract including such material as: (a) the definition of "Commercial Agent". The definition excludes, on the one hand, distributors who operate on a principal to principal basis and agents who are employees but who are remunerated partly on a com- mission basis (Art.3); (b) the obligation to act in good faith, to supply relevant infor-

rights to damages or indemnity on breach or non renewal. The indemnity to be not less than 1/10 of the agent's annual

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