MODEL FORM OF AGENCY CONTRACT FOR INTERNATIONAL TRADE
                  

                  1. A uniform model form for international trade
                  When negotiating agency agreements abroad, one of the main
                  difficulties which parties engaged in international trade are
                  faced with is the lack of uniform rules for agreements of this
                  type. Since there is no internationally agreed uniform
                  legislation on the subject (unlike for example in the case of
                  the international sales contracts), parties must rely on
                  national laws on agency which: (i) do not take into account
                  the specific needs of international trade (since they have
                  been enacted in primis for the domestic agreements, and (ii)
                  substantially differ from one country to another.

                  In particular the Hague Conventions of 1964 and, more
                  recently, the Vienna Convention on the International Sales of
                  Goods of 1980. There is now, to a certain extent, a tendency
                  towards harmonization of national laws, at least within the
                  EEC, in particular on the basis of EEC Directive n°86/653 of
                  18 December 1986. However, such harmonization is slow and
                  covers only certain aspects of the contract; whilst it is
                  certainly useful in order to create common ground for the
                  basic principles of agencies, it is insufficient to grant
                  legal security in international transactions.

                  Moreover, the directive provides for alternative solutions and
                  leaves Member States free to maintain (or possibly adopt in
                  the future) provisions which derogate to the directive in
                  favor of the agent. Under these conditions the ICC believes
                  there is a need for uniform contractual rules, which are, not
                  based on any specific national law, but which incorporate the
                  prevailing practice in international trade as well as the
                  principles generally recognized by the domestic laws on
                  agency. In preparing this model form, the working group has
                  tried to find fair and balanced solutions to the main problems
                  arising from an agency relationship, in accordance with
                  prevailing legislative standards (and in particular those
                  indicated in the EEC directive). However, since it is
                  impossible to make uniform rules and, at the same time, to
                  respect every rule of the various national laws (which
                  moreover may contradict themselves), the model form may
                  contain some clauses which are not in accordance with specific
                  mandatory provisions of a particular legal system. However,
                  since it is in line with the basic principles of domestic
                  agency laws, the risk of conflict with national public
                  provisions (and in particular with domestic rules which would
                  remain applicable whatever the law applicable to the contract)
                  should be almost non-existent; in any event, in order to cover
                  exceptional situations of this kind, it is expressly stated
                  that, if a conflict with rules of the country of the agent a
                  rises, the latter provisions should in any case be considered
                  by the arbitrators, if their application appears reasonable in
                  the context of international trade (art. 23.3).

                  2. Provisions on indemnity.
                  There are provisions in a certain number of countries which
                  grant the agent an indemnity if the contract expires or is
                  terminated for reasons other than a default attributable to
                  the agent. Such "indemnity" may be construed as a compensation
                  for goodwill created by the agent and which accrues to the
                  principal after the end of the contract, or as a compensation
                  for the loss suffered by the agent (e.g. the commissions he
                  would have earned had the contract lasted for a longer period
                  or the investments he would have amortized if the contract had
                  not been terminated) as a consequence of the expiration or
                  termination of the contract. This idea characterizes e.g.
                  German, Swiss and Dutch law. Under the French system: see
                  notably article 3 of the Decree of 23 December 1958 "lagent
                  commercial a drot a la reparation du prejudice oue lui cause
                  la cessation de ses relations avec le commettant" These two
                  solutions have been incorporated (as alternatives) in article
                  17.2 and 17.3 of the EEC Directive. In fact they have the same
                  purpose, i.e. to compensate the agent for the loss of goodwill
                  when the contract is terminated without his fault: we will
                  hereafter refer to the above indemnity or compensation as
                  "goodwill indemnity". On the other side, there are many
                  countries where no right to a goodwill indemnity is granted to
                  the agent.

                  This does not exclude of course that the agent may be entitled
                  to compensation for damages suffered as a consequence of a
                  contract termination which amounts to a breach of the contract
                  by the principal. Under these conditions it appears
                  appropriate to give the parties the opportunity to choose if
                  they wish to include or not the indemnity provision in their
                  contract. For this purpose, article 21 provides two
                  alternatives (A and B) in order to cover the different
                  situations. It is strongly recommended to choose alternative A
                  whenever the right to indemnity is recognized by the law of
                  the agent's country; in particular, as concerns EEC countries,
                  alternative A of article 21 would conflict with mandatory
                  rules of the legislation of the agent's place of business.
                  Furthermore, in cases where no such legislation exists, it may
                  be fair to grant the indemnity, particularly if this conforms
                  with international trading practice in that particular
                  business and/or area. As concerns the system of
                  indemnification, the model form has incorporated the
                  principles contained in article 17.2 of the EEC directive,
                  i.e. the "German" system, which appears to be prevailing in
                  the countries which recognize the indemnity. 6 This means that
                  the indemnity system of the model form is not in strict
                  compliance with the laws of the countries (like France) which
                  follow the alternative solution set forth in article 17.3 of
                  the EEC directive. However, since the substance of the agent's
                  rights is recognized, this should not give rise to particular
                  problems.

                  3. Recourse to international arbitration
                  Since the model form is a set of uniform contractual rules,
                  avoiding (as far as possible) the direct application of
                  conflicting domestic legislation, it is appropriate that
                  possible disputes be solved by a uniform resolution system,
                  organized on an international level. From this point of view
                  the best solution appears to be international commercial
                  arbitration (see particularly art. 23), which permits a truly
                  international approach and avoids the risk of differentiation
                  which would arise in case of recourse to domestic courts.
                  Since arbitration is essential in the framework of this model,
                  this ICC model contract should not be used in cases where the
                  dispute may be considered as non-arbitrable (i.e. "capable of
                  settlement by arbitration") according to the New York
                  Convention of 1958. The above risk exists in particular under
                  national laws which assimilate agents to employees (see
                  hereunder, §4.2.), whenever this implies a special
                  jurisdiction for disputes of this type. In these situations it
                  is normally recommended to contract with agents who are legal
                  persons (see hereafter, §4.2.) E.g. for the V.R.P. (France)
                  and the Representants de commerce (Belgium) or for agents
                  acting mainly with personal resources (Italy). In all these
                  cases the national law provides an exclusive jurisdiction
                  (specialized in labor disputes) which cannot be excluded by an
                  arbitration clause.

                  4. Scope of application
                  This model form has been prepared on the assumption that it
                  would apply only to international agency agreements, with
                  self-employed commercial agents, acting for the sale of goods.

                  
                  4.1. International agreements
                  In this respect it is undisputable that international agency
                  agreements should be governed by special rules in order to
                  take into account the special situation which exists in an
                  agency agreement between parties of two different countries.
                  Since the present model form has been established especially
                  for these situations, it will, in principle, not be
                  appropriate for domestic contracts, i.e. contracts between
                  parties having their place of business in the same country.
                  The parties are therefore advised not to use this model form
                  for domestic contracts, unless they check which amendments are
                  necessary in order to comply with a local situation.

                  4.2. Contracts with employed agents
                  In several countries special rules govern contracts with
                  agents qualified as employees, or more generally with agents
                  assimilated to the status of employees. E.g. in France, with
                  regard to VRP (Voyageurs, representants placiers), and in
                  Belgium for "representants de commerce". The above rules
                  establish a presumption that the agent is an employee: thus,
                  even if the contract clearly states that the agent is
                  independent, he will in principle be considered to be an
                  employee. In the Netherlands, labor law may apply to the
                  so-called Einfirmenvertreter, i.e. agents which represent only
                  one principal. E.g. in Italy the special procedural rules
                  (which exclude inter alia recourse to arbitration) which
                  govern employment contracts also apply to agency contracts, in
                  all cases where the agent has no important organization of his
                  own, but is acting mainly with his own family and personal
                  resources.

                  In countries of the above type there is a risk that the agent
                  may be qualified (independently of the definition given in the
                  contract) as an employee and that consequently the rules
                  applicable to employed agents (which will in many cases
                  conflict with the provisions of this model form) will apply. A
                  simple way to avoid such problems, particularly in the context
                  of this model form, could be to contract with agents who are
                  legal persons (e.g. companies): this solution is especially
                  recommended when the agent is established in a country where a
                  wide notion of employed agents (or agents assimilated to
                  employed agents) is accepted by the law or jurisprudence.
                  Since it is normally admitted that a legal entity cannot, by
                  definition, be considered as an employee.

                  4.3. Buying agents
                  This model is meant for agents who represent a seller of
                  goods, without taking into account so-called "buying agents"
                  (i.e. agents who promote the purchase of goods, acting for the
                  buyer).

                  4.4. "Service" agents
                  The model form has only taken into account the most common
                  case of agents selling goods, without considering agents
                  concerned with the promotion of services.

                  4.5. Consignment of the goods
                  It happens frequently that the principal wishes to appoint the
                  agent as consignee of a stock of goods (or spare parts) placed
                  in the agent's country. This involves however a number of
                  special problems which should be dealt with in a separate
                  contract. Consequently the problems of consignment of goods
                  have not been considered in this model form.

                  5. Precautions for use of the model form
                  Any model contract should, to the extent possible, be adapted
                  to the circumstances of a specific case. Of course, in theory
                  the best solution consists in drafting an individual contract
                  based on existing model forms in order to take account of all
                  the specific requirements of the parties. However, the parties
                  are often not in a position to prepare a specific contract and
                  prefer to have recourse to a ready-to-use balanced model form:
                  in this case they will ask for a model which can be used as it
                  stands, without any need to make modifications or additions.
                  The present model is an attempt to achieve a balance between
                  these two possibilities. The ICC has tried to work out a
                  single solution on every issue. However, where this has not
                  been possible (see e.g. articles 8 and 18 and 21),
                  alternatives have been suggested. Such alternative solutions
                  have been presented side-by-side under the letters A and B, in
                  order to point out that only one of them can apply. Therefore,
                  before signing the contract, the parties must decide which of
                  the alternative solutions they choose, and then cancel the
                  alternative they do not want to apply. In any event, the model
                  form provides that, if the parties do not make a choice by
                  canceling one alternative, one of them will automatically
                  apply according to article 24.1. and 24.2. of the model form.)
                  There are also a number of points where the parties must fill
                  in their requirements: definition of the territory and the
                  products, amount of commission, etc. All such points have been
                  put in the annexes to this document, so that the parties can
                  fill in and (where necessary) modify such annexes during the
                  life of the contract, without making changes to the basic text
                  of the contract. Before signing the contract the parties
                  should (and must as far as Annex VI is concerned) fill in the
                  Annexes and, if appropriate, delete the parts they do not
                  need. In order to avoid misunderstandings the parties should,
                  when signing the contract, put their initials on each page, in
                  order to make sure which amendments they have agreed upon or
                  which alternative solutions they have chosen. The Annexes have
                  been construed throughout so that (except for Annex VI
                  regarding commission) even when the parties do not fill in
                  some points, a solution can be found within the contract.