Abstract
When a company chooses to expand its market presence, one of the most common strategies is to rely on a commercial agent, a key figure in promoting business and developing the sales network. This collaboration, however, can also give rise to delicate issues related to the management of confidential information and potential conflicts of interest. This article examines the legal aspects and risks associated with this relationship, as well as the legal tools available to protect the company.
The legal framework governing the agency relationship
Appointing an agent is one of the most established ways to expand a company’s commercial network. An agent is entrusted with promoting business on behalf of the principal company in exchange for commissions. A well-structured agency agreement enables the company to enter new markets and strengthen its sales network.
However, there is another side to the coin: appointing an agent also entails risks (see: L’ex agente può portare via i clienti alla compagnia? [Trib. Catania, sent. 1512/2024 – Canella Camaiora Studio Legale]). In order to carry out their duties effectively, agents inevitably gain access to sensitive and confidential information, such as customer data, marketing strategies, commercial terms, and technical know-how. Moreover, due to the operational autonomy typical of this contractual relationship, agents may come into contact with other businesses, often including competitors of the principal. This makes it possible for the agent to shift from being a commercial ally to a potential competitor.
For this reason, the legislator has provided (and case law applies) a number of tools designed to prevent and sanction breaches of the agent’s duties of loyalty and fidelity, as well as to protect the company against direct or indirect forms of unfair competition.
First of all, it is important to note that the agency agreement is a “typical” contract under Italian law, governed by Article 1742 of the Italian Civil Code and following provisions. This type of contract regulates a continuous collaboration relationship, but without the subordination characteristic of employment relationships. The agent operates independently, while still being required to perform their mandate in compliance with the principal’s interests and instructions.
The core elements of this contractual arrangement are:
- an element of exclusivity in the relationship between agent and principal;
- the agent’s limited autonomy in performing contractual obligations, subject to defined territorial constraints and clear instructions from the principal;
- remuneration payable to the agent in relation to business concluded by the principal as a result of the agent’s intervention.
Throughout the duration of the relationship, the agent must act loyally and in good faith, exercising the diligence necessary to safeguard the principal’s interests. This entails not only actively and properly promoting business, but also avoiding conflicts of interest, by refraining from handling competing business within the same territory or sector.
On the one hand, the agent must ensure that, within their assigned territory, the principal concludes worthwhile transactions. On the other hand, Article 1749 of the Italian Civil Code imposes a corresponding duty of loyalty and fairness on the principal, including a duty of full disclosure (so that the agent has all necessary information to carry out their mandate effectively).
These provisions are intended – at least formally – to foster a relationship of mutual trust, in which each party is required to act (also) in the interest of the other. It is almost superfluous to note that these rules reaffirm the general principles of good faith and fairness in the interpretation and performance of contracts (see Articles 1175 and 1375 of the Italian Civil Code).
Italian law also provides a regulatory framework for the period following termination of the contract. Once the relationship has ended, the former agent is generally free to carry out their activity exclusively for another principal. However, to prevent the agent from exploiting knowledge previously acquired, Article 1751-bis of the Italian Civil Code allows the inclusion of a post-contractual non-compete clause. For such a clause to be valid, it must be in writing and may only concern the same territory, customers, and category of products or services covered by the terminated agreement. Its duration may not exceed two years following termination, and it requires the payment of a specific indemnity to the agent, compensating for the restriction imposed on their professional freedom.
The agent competing with the principal
As is well known, the provisions protecting against unfair competition among entrepreneurs are set out in Article 2598 of the Italian Civil Code and following provisions. These rules sanction conduct such as imitating a competitor’s products or distinctive signs, spreading false or disparaging information, or unfairly diverting customers.
In the specific case of a commercial agent, breach of loyalty obligations – before amounting to unfair competition in the strict sense – must first be framed as a contractual breach. When an ageourt clarified that breach of the exclusivity obligation (Article 1743 of the Civil Code) – when cnt promotes products of competing companies, uses or discloses confidential information to third parties, or engages in commercial relationships detrimental to the principal’s business, the principal may seek termination of the contract and claim damages.
The Italian Supreme Court (Order no. 22246/2021) has reaffirmed that an agent who maintains relationships with competing companies not only breaches contractual obligations but undermines the very foundation of the agency relationship: trust (“in the agency relationship, the bond of trust, corresponding to the greater autonomy in managing the activity, assumes greater intensity” – see also Supreme Court judgments no. 14771/2008, no. 11728/2014, and no. 29290/2019).
The Capable of prejudicing the principal’s interests – does not require particular formalities to qualify as just cause for termination by the principal, as it directly affects the possibility of continuing the collaboration, even temporarily.
An agent who promotes competing products therefore not only violates contractual provisions but disrupts the economic and functional balance of the agreement, legitimizing immediate termination without entitlement to indemnity. The Supreme Court thus upheld the reasoning of the Court of Appeal, confirming that “the failure to achieve the targets […] was attributable to the agent’s simultaneous acceptance of another mandate with a competing company, in breach of the exclusivity obligation undertaken in the contract and the general duty of fairness and good faith; this resulted in the impossibility of even provisional continuation of the relationship and the absence of the agent’s right to receive the indemnities claimed under Articles 1750 and 1751 of the Italian Civil Code”.
Contractual breach and unfair competition: the possibility of cumulation
Contractual breach, however, is conceptually distinct from violation of the principles underlying fair competition in the market.
Article 1751-bis of the Civil Code provides a private and preventive remedy: the possibility of including a post-contractual non-compete clause in the agreement, subject to formal and substantive requirements (written form, defined territorial and product scope, maximum duration of two years, and payment of an indemnity to the agent). This is therefore a restriction on professional freedom supported by financial consideration, specifically tailored to the contractual framework between principal and agent.
Articles 2598 and following of the Italian Civil Code, by contrast, sanction acts of unfair competition in the extra-contractual sphere of relations between entrepreneurs: imitation, disparagement, and more generally conduct capable of causing diversion of customers or confusion among the public. These provisions protect not only the commercial assets of the principal company but also the collective interest in fair competition, irrespective of the existence of a specific contractual agreement.
In general, an “unfaithful agent” – thereby in contractual breach – will often act in violation of the exclusivity obligation in favor of a third-party entrepreneur (who may therefore be held liable, where conditions are met, for unfair competition). However, if the “unfaithful agent” decides to set up independently and compete directly with the former principal, they may incur both contractual liability (for breach) and tort liability (for unfair competition).
What happens if someone falsely identifies as an agent of a company?
A particular form of unfair competition arises when a person, lacking any actual mandate, is used as a false agent or representative of a competing company. This conduct was addressed in a significant decision by the Court of Milan (judgment no. 10516 of 27 December 2023), in which the defendant company was held liable for sending its own representatives to the customers of a competing company, passing them off as agents of that competitor. To make matters worse, the “false agents” also disseminated partial and/or misleading information regarding the commercial policies of the company they did not represent.
Given the direct contact with the public, such conduct was deemed capable of misleading the average consumer as to the origin of the services offered, resulting in diversion of customers. The Court therefore classified it as conduct contrary to fair competition under Article 2598 no. 3 of the Italian Civil Code.
Even from this specific case, it clearly emerges that the agency relationship can be an extremely effective tool for business development, while at the same time exposing companies to significant risks where the agent fails to comply with their duties of fairness, loyalty, and confidentiality.
To prevent a strategic collaboration from turning into a threat to the company’s informational and commercial assets, it is now essential to draft clear and well-structured contracts. Only in this way is it possible to prevent critical issues, promptly manage breaches, and effectively protect the value of one’s business organization.
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Data di pubblicazione: 5 Marzo 2026
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Joel Persico Brito
Graduated from the Università Cattolica del Sacro Cuore in Milan, trainee lawyer passionate about litigation and arbitration law.