Agency Agreement
Agency agreement – key information
An agency agreement is a civil law form of cooperation concluded between the principal and the agent, regulated by the Civil Code in Articles 758–7649.
The agent undertakes to continuously and for remuneration act as an intermediary in concluding contracts or to conclude them on behalf of the principal, most often in the areas of sales, financial services or insurance.
The agent’s activity is continuous in nature – it is not a one-off assignment, but an ongoing cooperation in acquiring and servicing clients.
Key features of an agency agreement
- form of cooperation intended for agents, representatives and commercial intermediaries
- continuous, paid activity performed for the principal, such as acquiring clients or concluding contracts
- regulated by the Civil Code, not by the Labour Code
- possibility of reserving a region, i.e. a territory, and exclusivity for client service
- often the agent’s right to a so-called goodwill indemnity after the cooperation ends
Remuneration and contributions
The agent’s remuneration may take the form of a fixed monthly amount, commission on concluded contracts or a mixed model combining a fixed and variable component.
An agency agreement constitutes a basis for social security and health insurance if the agent has no other basis for insurance, such as an employment contract, and does not run a sole proprietorship from which they pay contributions.
In practice, many agents operate in a B2B model – in such cases, the rules for contributions and tax settlements correspond to self-employment.
