Agency Contract in Morocco

Foreign companies wishing to seize the countless opportunities offered by the Moroccan market may decide to expand their sales network through the activity of a local agent.
From a general point of view, the regulation of the agency agreement contained within the Moroccan Code of Commerce does not differ from the disciplines of European countries or, more generally, from the legislation adopted by the community and international practice. In fact, according to the Moroccan legislator, the commercial agency contract is a mandate with which a subject undertakes to conclude on an ongoing basis the purchases or sales, including all other ancillary operations, in the name and on behalf of another subject, either it producer, trader or other agent (art. 393).
The commercial agent activity can also be entrusted to both individuals and legal entities, whether they are of Moroccan nationality or not. In this regard, however, taking into account the importance of personal relationships in Morocco, when appointing an agent it is advisable to choose a person of Moroccan nationality or who, at the most, is perfectly familiar with the local uses and customs.
While it is true that Moroccan legislation does not require the agent to have residency or Moroccan nationality, however, the law itself prohibits submitting the agency contract to foreign law. Consequently, when an agency contract having its effects on the Moroccan territory is concluded, it will always be necessary to keep in mind that the relationship with the agent will be regulated according to the following dictates (indicated, by way of example and without them being exhaustive) :

An agency contract may take the form of both a fixed-term contract and an open-ended contract, and, in the event that the fixed-term contract is performed even after its expiry, it is important to emphasize that it will automatically become permanent contract;
Similarly to what happens internationally, moreover, if the principal and the agent are bound by a permanent contract, the principal may terminate his contractual relationship with the agent at any time. However, the same will be required to comply with the following terms of notice:

• one month, if the withdrawal occurs during the first contractual year;
• two months, if the same is exercised during the second contractual year;
• three months, starting from the third year.

In case of dissolution of the agency agreement, the agent will be entitled, despite any clause to the contrary, to compensation for the damage suffered due to the dissolution of the relationship. The principal, however, may terminate the contract without notice in the case of gross negligence of the commercial agent. Similarly to other regulations in force in other countries of the world, the commercial agent will also be entitled to a remuneration set by agreement between the parties and, in lack of agreement, based on the customs of the profession. This remuneration will usually be linked, in whole or in part, to a commission, calculated on the basis of the number or value of the business negotiated by the agent. Finally, in consideration of the fact that Morocco has ratified the New York Convention of 1958 on International Arbitration, it will be appropriate to include in the contract the clause that provides for the exclusive competence of an arbitration judge to decide any dispute arising between the principal and agent. In particular, it is suggested to resort to an administered arbitration, to make the procedure subject to an arbitration regulation adopted by an independent body such as a Chamber of Commerce either Moroccan or of a third country. An administered arbitration, in fact, will be recognized - and therefore executed - within Morocco more quickly than an unadministered arbitration.