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Slovenia

Restrictive Covenants

Implementing Legislation

Code of Obligations: (Official Gazette of the Republic of Slovenia, Nos. 83/2001, 32/2004), Chapter XIX (Agency Contract), Articles 807 – 836).

1) Under Slovenian law is it possible to have a restraint of trade clause operating during the agency agreement and, if so, is it subject to any qualifications?

Paragraphs 4 and 5 of the Article 807 of the Code of Obligations apply in the absence of agreement to the contrary.

The Code of Obligations imposes provisions concerning a restraint of trade clause separately for each of the parties to the agency agreement:

a) Principal

According to paragraph 4 of Article 807, a principal may, in the absence of an agreement to the contrary, have in the same geographic area for the same business activities more than one commercial agent. As a rule, a principal may therefore have multiple commercial agents:

  • in the same geographic area; and
  • for the same business activities.

If a commercial agent wants to achieve exclusivity, then he must include such a restraint of trade clause in the agency agreement.

b) Agent

According to paragraph 5 of Article 807, a commercial agent shall not perform business activities for other principals without the principal’s consent if the following conditions are fulfilled:

  • the agent will be acting in the same geographic area performing the same business activities; or
  • the agent will be acting in the same geographic area for the same group of customers.

2) Under Slovenian law is it possible to have a restraint of trade clause operating following the termination or expiry of the agency agreement and, if so, is it subject to any qualifications?

Article 836 of the Code of Obligations is a mandatory piece of legislation. The parties to the agency agreement may not derogate from the provisions of Article 836 to the detriment of the commercial agent.

A restraint of trade clause shall be valid only if it is agreed by both parties and concluded in writing. In addition certain condition have to be fulfilled relating to the group of customers, to the geographic area entrusted to the commercial agent and to the kind of goods covered by the agency agreement. A restraint of trade clause shall be valid for not more than two years after the termination of the agency agreement. If a commercial agent respects the provisions of a restraint of trade clause pursuant to Article 836, then a principal must pay an indemnity to the commercial agent.

If an agency agreement is terminated due to reasons attributed to the fault of the commercial agent, a commercial agent is bound by a restraint of trade clause only if the principal pays an appropriate severance payment and indemnity during the whole period of validity of a restraint of trade clause. The amount of indemnity is equivalent to the agent’s average monthly remuneration over the preceding five years or over the time of validity of the contract, whichever is less.

If an agency agreement is terminated due to the fault of the principal, a commercial agent may terminate a restraint of trade clause in writing within one month after the contract termination.

agentlaw.co.uk. wishes to thank Šelih & Partners for its contribution to this page

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