Agency Contract in Ukraine

In Ukraine, the agency agreement is regulated by art. 295 of the Ukrainian Domestic Code (in short UCC), which defines it as an entrepreneurial activity which consists in the performance by the agent of the commercial mediation activity in the name, interest, expense and under the direction of another subject (the so-called principal).

According to Ukrainian law, the role of the agent can be played indifferently by a natural or legal person, provided that the functions performed by it have their basis in an agency contract and consist of commercial mediation. It follows that, in Ukrainian law, the agency contract governs the relationship between the agent and the principal, where the parties to said contract assume the status of entrepreneurial subjects.

As for the subject of the agency contract, Ukrainian law specifies that the services offered by the agent in favor of the principal consist in the stipulation of agreements / contracts or in favoring their conclusion and, in any case, they must be concrete and effective activities, carried out in the name and at the expense of the principal. Hence, there is a division of the agency contract into two cases: on the one hand, the most widespread, having as its object the conclusion of commercial agreements, on the other, the one aimed at providing a series of activities and services so that the stipulation of the contract / agreement materializes.

For the agency contract, the Ukrainian law expressly requires the written form and lists a series of requirements under penalty of nullity, including, by way of example, the specific competences and functions of the agent, the duration of the contract, the extent of compensation and others, as well as the penalties applicable in the event of non-fulfillment.

In drafting the agency contract, it is advisable to define the limited area in which the agent carries out his business. In the absence of specific contractual provisions with reference to the territory of competence, it is assumed that the agent operates within the borders of the Ukrainian state.Under Ukrainian law, the agent is required to periodically report on the activities carried out.

In addition, the agent must personally perform the functions attributed to him and cannot delegate the activity to others.

The agency contract ends by the will of the parties and other cases expressly provided for by local law. Taking into account the legal protections reserved by Ukrainian law for the agent, in drafting the agency agreement it is suggested to carefully evaluate the applicable law.