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BASIC ASPECTS OF AGENCY AGREEMENTS UNDER SWISS LAW AND COURT PRACTICE
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An agency can be concluded either implicitly or expressly. In the absence of contractual provisions, the statutory provisions apply. The Principalīs interests are best served with an agreement in writing that, as far as possible and desired, opts out of statutory provisions. It is possible that a court will infer an implicit agreement from a course of trading between two business partners. The statutory provisions that will apply if an implicit agreement is found primarily favor the interests of the agent. Therefore, potential principals are well advised to avoid the circumstance in which a business relationship with a broker or commission agent can be construed as an agency agreement. The Code of Obligations defines the agent as a person who contractually obliges itself, on a continuous basis and without being an employee, either (i) to act as an intermediary on behalf one or several principals in business transactions, or (ii) to conclude such transaction in their name and for their account. An agent always performs his work independently. He is entitled to organise his work and to dispose of his time freely. Otherwise there is a risk that he may be qualified as an ordinary employee. Such is the case, if an agent acting exclusively under the principalīs supervision is too rigidly subjected to the principalīs directives, instructions ad control and therefore is lacking independence. If a person or company acts as an independent intermediary, but on a case by case rather than a continuous basis, or if a person or company is charged to solicit, against a commission, an opportunity to enter into one specific deal only, such arrangement is not an agency relationship under the definition of this term in the Swiss Code of obligations, but a broker-dealer arrangement, governed by different legal concepts and legal entitlements (Code of Obligations 412 et seq) For the agency agreements, the Code of Obligations is applicable (articles 418a to 418v).
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