The commercial brokerage agreement

A brokerage agreement is a commercial contract for remuneration. It has no dedicated statutory regime, but some of its essential features can be derived from the rules governing commercial brokers in Section II of Chapter VI of the Commerce Act. One party to the agreement is always a commercial broker within the meaning of Article 49 of that Act, who brings two parties together because they wish to conclude a particular transaction. The other contracting party engages the broker because it needs an introduction to a counterparty for that transaction. The broker earns remuneration when the intended transaction is concluded.

No particular form is required for a brokerage agreement to be valid, although form may matter for proof under Article 164(1), point 3, of the Code of Civil Procedure. The broker undertakes to introduce the parties to a future transaction. The broker does not participate directly in that transaction and has no obligation under it to perform any other legal or practical acts. The broker’s remuneration is conditional on the parties actually concluding the transaction for which they were introduced; only then is the fee due. This distinguishes brokerage from a mandate or a commission agreement (Supreme Court of Cassation, Commercial Chamber, Judgment No. 37 of 27 April 2012 in commercial case No. 1143/2010, delivered under Article 290 of the Code of Civil Procedure).

The object of brokerage is a particular result: to bring the parties together and assist them in concluding contracts. It is sufficient that the contract was concluded as a result of the broker’s introduction. The broker does not participate as either party’s representative and does not conclude the transaction in the broker’s own name or in anyone else’s name. Since a mandate and a commission agreement entail different obligations, their rules do not apply even on a supplementary basis.

The commercial broker’s principal task is to bring the two parties together and attest that the transaction was concluded, exercising the effort and care expected of a prudent merchant. The broker’s right to remuneration arises when the transaction brokered is concluded.