Resolution of the agency contract for breach

contrato de agencia

 

The default as provided in the contract entitles agency resolution

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The agency contract It may be terminated for default. The wording of the contract is the key.

6th Section of the Audiencia Provincial de Vigo, in Case 24 July 2019 (Res. No. 400/2019) has solved one of these cases resolucición of the agency contract for breach of benefits agreed.

Fact background,,es,Juan Alberto and Paulina filed suit against FTA,,es,Asset Securitization Fund,,es,requesting the declaration of nullity for abusive of the floor and ceiling clauses contained in the novation contract of the mortgage loan of,,es,with the corresponding refund of amounts unduly collected,,es,The Securitization Fund Management Company,,es,Beech,,es,acting on behalf of FTA, he responded to said claim alleging that he lacked passive legitimacy since the entity had no legal personality and that it constituted only a private and open fund and that therefore the passive legitimization corresponded to BBVA as successor of Catalunya Banc that was the Company fund constituent,,es

The 1 January 1999, Fernandez Insurance Agency S.L.. (onwards, AGENCY) signed a agency contract With faith Foresighted Insurance Company S.A.. (hereafter, LA FE).

In the tenth clause of the contract,  the unilateral denunciation by any of the parties contemplated as a cause of extinction or termination of the contract. So good, the need established in such a case forewarning made in writing by time one month per year of validity of the contract and a maximum of six months.

Similarly, this clause contemplated as a cause of extinction of the contract resolution, the total or partial breach of obligations of the parties. Among the various types of breach of contract Special reference was made to the repeated failure in production or collection of raw.

Burofax forwarded by the 8 May 2019, Faith gave terminate the contract by invoking a cause contractual breaches attributed to the agent.

The agency considered the resolution unjustified and in breach of the notice period, so brought demand, claiming a series of compensation totaled 10.742.652,87 euros.

Primera Instancia

The 22 June 2017 el Juzgado de Primera Instancia nº 4 Vigo gave judgment partially upholding the lawsuit. He condemned the faith to pay the plaintiff the amount of 474.592,62 euros.

Provincial Court

The plaintiff filed an appeal requesting the full estimate of the requests made on demand.

The insurer defendant appealed the judgment ordering the reduction of monetary condemns the amount of 196.210,83 euros and the rejection of the demand in the rest of the claims. He argued that it was appropriate resolution of the contract decreased activity and therefore, in that case the notice was not required for resolution.

The 24 July 2019 6th Section of the Audiencia Provincial de Vigo gave judgment partially upholding the appeal of the Agency and dismissing the challenge FAITH.

The Court referred to Article. 25 Act 12/1992, of 27 May, about Contrato de Agencia. That article determined that:

1. The agency contract of indefinite duration shall be extinguished by the unilateral denunciation of either party by notice in writing.

2. The notice period is one month for each year of the term of the contract, with a maximum six months. If the agency contract had been in force for less time than one year, the notice period is one month.

3. The parties may agree longer periods of notice ... ".

As an exception to the above rule, Article. 25 of the same legal body exempted from the need to give notice of expiration of the contract, inter alia, “when the other party had breached, total o parcialmente, the legal obligations or contractually established ".

So, Article determined that in such cases it is understood that ended contract written receipt stating the will of extinction and cause.

The defendant company unilaterally terminated the contract based on the breach of obligations of the agency. And, given the grounds for termination He did not use the notice.

The object of Litis was objectively determine whether there was cause for termination by dereliction of duty agency. Or if instead, that decision had been arbitrary and devoid of reason. Similarly, had to determine whether the applicant to any compensation or perception born of the agency contract itself.contrato de agencia

The Court said the doctrine that the fundamental note justifying the decision for non-compliance was that "balance and function of the contract are threatened, not only the current provision, but it affects future.  In that case it would affect a aspect of the first order in the agency agreement was“production”.

Thus, affirmed the doctrine that "to assess the failure to justify the termination of a contract of agency, It must start from the foundation ... of maintaining a balance, in this type of legal business it is durable.

Clause 10.5.a) of the contract between the parties identified as one of the events of default by the agent, the repeated failure in production or collection of raw.

Was due from the idea that the role of the agent, as soon as insurance broker, It behaved two types of essential obligations. Specifically, the conservation of the insurance portfolio and hiring new insurance.

The report of the expert Mr.. Carlos Alberto mainly discussed the evolution of portfolio insurance agency since 2009 year 2016. And, He revealed that the portfolio had steadily declined over the period. There was a growing decline in the number of insured. The conclusion drawn was a less clear business. According to expert, It not carried out the commercial effort required by the agent to compensate the insured Overrides.

It was in a situation of constant loss portfolio. And accordingly, to a significant negative impact on the profitability FAITH that portfolio insurance.

The expert concluded by stating that "the resolution of the agency agreement was made under the terms and conditions laid down in the contract It inasmuch as this was planned as a course of breach of the obligations of the agent repeated failure in production or premium collection. The lack of new production insurance agent is reason enough for the insurance company could decide to terminate the contract ".

For this circumstance constituted Hearing a breach of the agency contract subscribed. The agent was as basic and essential mission producing safe; This obligation is allowed to meet the progressively reduced the production of raw.

Therefore, Hearing determined there was no compensation for wrongful termination or arbitrary contract.

Conclusion

The resolution justifies the breach Agency agreement. The wording of the contract is key to determining whether there is noncompliance.

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