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27 January 2021

13 Jumaadaa al-Aakhirah 1442

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Law No. 27 of 2006 Promulgating the Trading Regulation Law

Law Summary Record Type: LawNumber: 27Date: 27/07/2006 Corresponding to 02/07/1427 HijriNumber of Articles: 849Status: In force

Official Gazette :Issue: 10Offcial Journal Issue Publication Date: 13/11/2006 Corresponding to 22/10/1427 HijriPage from: 281

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Section Name

a) Contracts Agency and Distribution Contract

290 Article

A contract agency is a contract under which the agent continuously seeks and negotiates the conclusion of transactions in a specific field of activity for the benefit of the client against consideration. The agent's tasks may include the conclusion of these transactions and their implementation on behalf of the client.

291 Article

The contract agency contract must be recorded in writing. It must specify in particular the limitations of the agency, fees of the agent, the area of activity, the duration of the contract if it is for a fixed term and the trademark of the commodity which is under the agency, if any.

292 Article

The contracts agent shall undertake the work of his agency and manage his commercial activity independently and he shall be solely responsible for the expenses of his activity.
293 Article

The client may not be assisted by more than one contracts agent in the same region in the same area of activity.

294 Article

Where it is stipulated in the contract that the contracts agent shall assess display, storage, maintenance or repair facilities or the requirements of the agency's work are to be especially time-consuming, the contract term cannot be less than five years.

295 Article

A contracts agent may not assume the financial rights of the client, unless the client permits him to do so. In this case, the agent may not grant a reduction or term without special permission.

The contracts agent may receive requests for the execution of contracts that are concluded by him as well as complaints about non-implementation of these contracts. The contracts agent shall represent his client in cases related to these contracts that are filed by him or against him in his own area of activity.

296 Article

The client shall be committed to pay the agreed fee to the agent. This fee may be a percentage of the value of the deal and this percentage shall be calculated on the basis of the sale price to the customer, unless otherwise agreed.

297 Article

The contracts agent shall be entitled to a fee for transactions that are concluded as well as those that are not concluded because of actions on the client's part, unless the contract requires otherwise.

The agent shall also be entitled to a fee for transactions entered into by the client directly or through others in the area of activity assigned to the agent, even if these transactions were not completed as a direct result of the latter's activity, unless the parties expressly agree otherwise.

298 Article

The client shall submit to the agent all the information and facilities required for the conduct of the agency. The client shall provide in particular specifications of goods and models, drawings, samples and other data that will help him to promote and market the goods under the agency.

299 Article

The contracts agent shall be committed to taking all necessary measures to preserve the rights of the client. The contracts agent shall provide his client with data on market conditions in his area of activity. Other than in cases authorized by law, The contracts agent may not disclose confidential client information relating to the agency activity, even after the end of the contractual relationship.

300 Article

Agency contracts shall be entered into in the joint interest of both parties, so a client may not terminate a contract where the agent has not been at fault, but he shall compensate the agent for damages resulting therefrom. Any agreement contrary to this shall be invalid.

The agent shall also be obliged to compensate the client for damages occurring if the agent resigns the agency at an inappropriate time and without an acceptable excuse.

301 Article

Where the contract is for a fixed term and the client did not renew it at the end of its term he shall pay the agent a fair sum in compensation which shall be determined by a tribunal, even if there is agreement to the contrary.

To be entitled to such compensation the agent shall meet the following conditions:

1. The agent shall not have made any mistakes during the implementation of the contract.

2. The agent activity has led to apparent success in the promotion of goods or increased number of clients.

Assessment of compensation shall take into account the damage suffered by the agent and help given by the client to the agent in promoting products and increasing customer numbers.

302 Article

The compensation referred to in the aforementioned Article shall lapse after 90 days from the date of termination of the contract. All other ensuing cases from the contract agency contract shall lapse by the lapse of three years from the end of the contractual relationship.

303 Article

Where the client appoints a new agent in the contracts agent's place, the new agent along with the client shall be responsible for paying compensation awarded to the previous agent if it is proved that his removal or non-renewal of his contract is the result of collusion between the client and the new agent.

304 Article

Distribution contract under which traders are committed to promoting and distributing the products of an industrial or commercial establishment in a particular area shall be covered by the contracts agency regulations and the provisions of Articles 294, 300, 301, 302 and 303 herein shall apply thereto.

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