Decision of the Supreme Court of 12-03-2015

Agency agreement – Commercial concession agreement – Goodwill indemnity – Exclusivity clause – Nullity

The rules governing agency agreements, especially with regard to termination of the agreement, applies by analogy to commercial concession agreements. Accordingly, ‘the right to goodwill indemnity presupposes the occurrence of conditions cumulativelyprovided for in subparagraphs a), b) and c) of Art. 33.1 of DL 178/86, which requires the demonstration, in view of the findings of fact – and the responsibility of the agent or concession holder submitting the claim – that, in a predictive judgement, the principal benefitted considerably, after termination of the agreement, from its activity of canvassing for or increasing the number of customers’.

In the case analysed in the Judgment, the grantors terminated verbal agreements for the commercial distribution of diving equipment and accessories with the concession holder, which believed it was entitled to goodwill indemnity and the return of the products that it had bought from them. However, as there was no proof that the concession holder had canvassed for customers, nor that the grantors had taken advantage of its activity - particularly as the grantors began canvas for customers in Portugal, through its Spanish subsidiary - it cannot be concluded that the grantors had effectively benefitted from customers canvassed for by the concession holder, even though they had access to its customer data.

On the other hand, it was decided in the Judgment that Article 4 of Decree -Law 178/86 which determines the requirement for the granting of exclusive rights in favour of an agent to be set down in writing, was not applicable by analogy to concession agreements, since this was an exceptional provision and, as such, not open to application by analogy. Thus, insofar as the goodwill indemnity sought by the concession holder i s based on the breach of an unwritten exclusive agent clause in its favour, the goodwill indemnity provided for in Article 33 of the same law could not be applied by analogy for reasons of consistency and unity of the legal system. Indeed, if an agent cann ot rely on the breach of merely ‘factual’ exclusive rights in order to receive goodwill indemnity, the rule that gives the agent the right to receive goodwill indemnity in the event of breach of exclusive rights agreed in writing cannot be applicable by analogy to a concession holder with exclusive rights agreed verbally.

Judgment of the Court of Appeal of Lisbon of 10-03-2015

Bankers’ liability - Financial risk product – Financial intermediaries - Guarantee of payment - Duty to inform - Obligation to pay compensation

The Bank’s staff having informed the customer, in accordance with precise instructions they had received, that the issuance of the commercial paper in question could be subscribed with all security, that the Bank itself would take responsibility for the return at maturity, guaranteeing its repayment and the payment of interest thereon, not entailing, therefore, any risk, that the product had, after all, the same value as a term deposit and that the customer could ask for the payment of the principal and of the interest that was earned in advance, it can be concluded that the Bank undertook, with the customer, to co-assume the obligation of repayment of the amount subscribed and interest incurred by the entity that issued the so-called commercial paper, ensuring its payment as the party directly liable.

Even if this were not the case, and bearing in mind that the financial p roduct in question did not have the real features described, it can always be concluded that the Bank flagrantly breached  the duty to inform to which it was bound, thus convincing  the customer to subscribe to commercial paper that it would otherwise not ha ve subscribed to, which makes it liable for losses caused to the customer, both due to its conduct in the formation of the contract and due to the conclusion and performance of that contract.