Sales Agent Spain and Portugal: Law 12/1992 and DL 178/86
What Spanish Law 12/1992 and Portuguese Decreto-Lei 178/86 say on written form, territory, exclusivity and non-compete for dairy factories.
If your cheese or dairy factory is going to sign with an agent for Spain and Portugal, there are two texts worth reading: the Spanish Law 12/1992 and the Portuguese Decreto-Lei 178/86. Both texts touch on territory and non-compete clauses, although they do not regulate them in the same way. The written form is set out in the Spanish law1, and exclusivity is regulated in the Portuguese text, which requires a written agreement to grant it2. This article is descriptive and does not constitute legal advice: before you sign, consult a lawyer in each country.
What an agency contract is in Portugal
Decreto-Lei 178/86, of 3 July, defines agency as the contract under which one party undertakes to promote the conclusion of contracts on behalf of the other party, in an independent and stable manner and in return for remuneration. In addition, the agent may be assigned a specific territory or a specific customer group2.
This definition (a free, unofficial translation) already gives you two useful points for a factory. The first: the agent acts on behalf of the factory, not on its own account. The second: territory or customer group are elements that the law itself allows to be assigned2.
Written form: what the Spanish law says
In Spain, Law 12/1992, of 27 May, on Agency Contracts, provides that each party may require the other, at any time, to formalise the contract in writing. That document must record any amendments that have been made1.
In practice, this means that both the factory and the agent can ask for the written document whenever they wish, and that later amendments also belong in it1. For the non-compete agreement, the Spanish law goes further: it must be in writing to be valid1.
Territory and exclusivity
Territory appears in both texts, but with different functions. In Portugal, the territory or customer group forms part of the very definition of agency2. In Spain, the geographical territory (or that territory together with the group of persons entrusted to the agent) is the outer limit to which a non-compete agreement may extend1.
On exclusivity, the Portuguese text is clear: granting the agent the right of exclusivity depends on a written agreement between the parties. With that right, the other party is prevented from using other agents, within the same territory or the same customer group, for activities that compete with those of the exclusive agent2.
Translated into a factory’s decision: if in Portugal you want your agent to be exclusive, or want to avoid becoming so without realising it, the exclusivity must be recorded in writing2. And if it is, the factory may not place other agents in competition with it in that territory or with that customer group2.
Non-compete clause: two years and limits
Here the two laws agree on a central point: the maximum duration.
- In Spain, the non-compete agreement may not last longer than two years from the termination of the agency contract1.
- In Portugal, the obligation not to compete may only be agreed for a maximum of two years2.
They also agree that the clause must be limited to what was entrusted to the agent. The Spanish law provides that it may only extend to the geographical territory, or to that territory and the group of persons entrusted to the agent1. It adds that it may only affect the category of goods or services that are the subject of the acts or transactions promoted or concluded by the agent1. The Portuguese law, for its part, confines the obligation to the territory or customer group entrusted to the agent2.
Quick comparison
| Aspect | Spain (Law 12/1992) | Portugal (Decreto-Lei 178/86) |
|---|---|---|
| Written form | Either party may require the formalisation of the contract in writing at any time; the non-compete agreement must be in writing to be valid1 | Exclusivity depends on a written agreement between the parties2 |
| Territory | Limit of the non-compete agreement: geographical territory, or that territory and the group of persons entrusted to the agent1 | A territory or customer group may be assigned to the agent2 |
| Exclusivity | No reference in the texts cited | Requires a written agreement; prevents the use of other competing agents in the same territory or customer group2 |
| Non-compete | Maximum two years from termination; only the category of goods or services of the agent1 | Maximum two years; limited to the agent’s territory or customer group2 |
What it means for your factory
An agent covering both countries works under two frameworks with common points: a maximum of two years for non-compete and its limitation to what was entrusted to the agent12. Each text also has its own nuances: in Spain, the right to require the contract in writing1; in Portugal, the requirement of a written agreement for exclusivity2.
That is why it makes sense for your lawyer to review the wording of the contract against the legislation of each country. This guide only describes what the two texts say; it does not replace that review.
How A2Z can help you
A2Z Foods has been a sales agent in Spain for European cheese and dairy factories since 2015, based in Barcelona. We only earn commission from the factories we represent, and we sell to wholesalers, the food industry and restaurant chains, never to the final consumer.
We currently represent factories from 10 countries and sell in Spain and Portugal. The founder has more than 15 years of experience importing European dairy products for both markets. We work in Spanish, Catalan, English and French.
If your factory wants to cover Spain and Portugal with an agent, request representation through the form for factories. If you would first prefer to see how we work, you will find all the information on the sales agent page for dairy factories.