{"id":10690,"date":"2026-04-29T16:40:14","date_gmt":"2026-04-29T14:40:14","guid":{"rendered":"https:\/\/www.navarrollimaabogados.com\/news\/modifying-an-agency-contract-when-is-it-valid-and-when-is-consent-required\/"},"modified":"2026-04-29T16:40:14","modified_gmt":"2026-04-29T14:40:14","slug":"modifying-an-agency-contract-when-is-it-valid-and-when-is-consent-required","status":"publish","type":"post","link":"https:\/\/www.navarrollimaabogados.com\/en\/trade-disputes\/modifying-an-agency-contract-when-is-it-valid-and-when-is-consent-required\/","title":{"rendered":"Modifying an Agency Contract: When Is It Valid and When Is Consent Required?"},"content":{"rendered":"

Although the Commercial Agency Act (CAA) has a relatively concise body of provisions<\/strong> \u2014 just 31 articles \u2014 its scope covers a wide range of highly complex situations.<\/strong><\/p>\n

Within this context, one of the key questions is determining precisely when a principal may unilaterally modify an agency contract. Specifically, when do new requirements amount to mere reasonable instructions or legitimate guidance within the ordinary course of business \u2014 and therefore fall within the principal’s managerial authority \u2014 and when, on the other hand, do they constitute a material change<\/strong> to the contractual terms that requires the agent’s consent.<\/p>\n

This is no minor issue; it is a decisive factor in determining whether the agent will be entitled to claim the corresponding compensation (goodwill indemnity, notice period, and damages where applicable). It is worth noting that an agency contract may be terminated unilaterally by either party, and that only in cases of breach of contract by the agent will the agent forfeit the right to receive the compensation otherwise due.<\/p>\n

Unilateral Modification of an Agency Contract: What the Law Permits and What It Does Not<\/h2>\n

The legal basis for this debate lies, in our view, in Article 1256 of the Civil Code<\/a>, which prohibits leaving the performance of any obligation entirely to the discretion of one party alone.<\/p>\n

From this premise, it is necessary to assess each case individually<\/strong>, taking into account the nature of the new instruction or obligation being imposed by the principal, as well as the prior contractual relationship between the parties. Only when the modification affects essential elements of the contract \u2014 or introduces a new obligation that was not previously binding on the agent \u2014 will the agent’s consent be required for the change to take effect and be enforceable.<\/p>\n

What Factors Should Be Considered?<\/h3>\n

In this framework, the key rule under the CAA is set out in Article 9.2(c), which provides that “the agent must carry out its activities in accordance with the reasonable instructions received from the principal, provided they do not affect the agent’s independence.”<\/em><\/p>\n

It follows that if the principal’s new requirements can be understood as falling within the scope of these reasonable instructions<\/strong>, they constitute legitimate directives that are binding on the agent<\/strong>, who must comply with them. Conversely, if they represent a material change<\/strong> to the contractual terms that falls outside this framework, the agent may refuse to comply<\/strong> without being considered in breach \u2014 rather, such refusal would be a legitimate exercise of the agent’s contractual position.<\/p>\n

\"Agency<\/p>\n

There Is No Closed List<\/h3>\n

Each case must be assessed on its own merits, having regard to the nature of the modification<\/strong> itself and the history of the relationship between the parties \u2014 the analysis is inherently fact-specific. That said, case law has progressively identified certain recurring criteria<\/strong>, treating as material those modifications that affect matters such as:<\/p>\n