Commercial agent: you are paid monthly and answered within 15 days

They are Articles 1426 and 1427 of the Civil Code of 2020: the principal’s five obligations and the agent’s ten in the agency contract.

Commercial agents and principals under an agency contract governed by the Puerto Rico Civil Code.

• From the principal: pay the agreed remuneration monthly.Verified against the official source
• From the principal: communicate the acceptance or rejection of the proposals or orders within the usual period, which must never be less than fifteen days from receipt.Verified against the official source
• From the principal: put at the agent’s disposal, sufficiently in advance and in appropriate quantity, the samples, catalogues, tariffs and other necessary elements.Verified against the official source
• From the agent: keep separately the accounting of the operations of each principal it acts for, and pay the expenses its activity generates.Verified against the official source
• From the agent: obtain the principal’s express consent to name sub-agents, for whose acts it answers.Verified against the official source

• The accounting kept separately by principal: Article 1427(f) requires it that way where the agent acts for more than one.
• The principal’s express consent, if you are going to name sub-agents.
• The record of when the proposals or orders were received: the period of Article 1426(e) runs from that receipt.

1. 1

   Step 1: Payment is monthly

   Article 1426(d): pay the agreed remuneration monthly. The Code fixes the frequency, not the amount. How much is paid is another matter, dealt with by the articles on the agent’s remuneration.

2. 2

   Step 2: Fifteen days is the floor, not the ceiling

   Article 1426(e): communicate to the agent, within the usual period, which must never be less than fifteen days from receipt, the acceptance or rejection of its proposals or of the purchase or service orders. Read it slowly: the article orders an answer within the usual period and gives that period a fifteen-day minimum.

3. 3

   Step 3: The working tools come from the principal

   Subsection (b): samples, catalogues, tariffs and other elements it has and that are necessary, sufficiently in advance and in appropriate quantity. The obligation reaches only what the principal has — "of which it disposes" — and what is necessary.

4. 4

   Step 4: And the warning that the volume changed

   Subsection (c): ask the agent for all the information it deems necessary to perform the contract and warn it of any significant variation in the volume of operations. That warning matters, because a significant decrease in the agent’s business volume is a ground for extinguishing the contract in the article that lists them.

5. 5

   Step 5: Diligence, loyalty and reasonable instructions

   Article 1427(a) and (b): act with diligence and loyalty in performing its activities for the principal in all the operations entrusted to it, and exercise its activity per the reasonable instructions received. The word "reasonable" is in the text and limits which instructions bind.

6. 6

   Step 6: Reporting, and especially on who pays

   Subsections (c) and (d): communicate the information it has to fulfil its task, and inform without delay of the business dealt with or concluded, especially the solvency of the third parties with whom it dealt or concluded such business. The third party’s solvency is named separately, and with reason.

7. 7

   Step 7: Claims reach you even if you did not close the deal

   Subsection (e): receive in the principal’s name the claims related to the operations promoted, even if it did not conclude them, and transmit them immediately to the principal. It is the agent’s only obligation the article orders performed "immediately".

8. 8

   Step 8: Separate accounting for each principal

   Subsection (f): keep, separately, the accounting of the operations related to each of the principals it acts for. An agent representing several may not keep a single set of books for all.

9. 9

   Step 9: Closing contracts and collecting: only if empowered

   Subsections (g) and (h): perfect and execute the contracts, where so required and empowered; and collect the principal’s credits, where so required and authorised. Both are conditioned, and that condition squares with the article defining the agent as an independent intermediary who does not represent the principal.

10. 10

    Step 10: Expenses and sub-agents

    Subsections (i) and (j): pay the expenses its activity generates, and obtain the principal’s express consent to name sub-agents, for whose acts it answers. The consent must be express, and the agent answers for what the sub-agent does.

11. 11

    Step 11: What these articles do not carry

    There is no amount, no penalty for late payment, no written consequence for a principal that stays silent past the usual period, and nothing on how the requirement or empowerment of subsections (g) and (h) is done. None of that is here, and this guide does not invent it.

The contract runs between agent and principal; the Code names no agency for this chapter. Non-performance claims are decided by the Court of First Instance. The chapter itself warns that these rules do not impair the agent’s rights under the applicable special laws, without naming them.

• Accepting payment every few months: Article 1426(d) says monthly.
• Reading the fifteen days as a maximum: the article sets them as the minimum of the usual period.
• Not recording when the proposals or orders were received, which is where that period starts.
• Naming sub-agents without the principal’s express consent.
• Forgetting that the agent answers for the acts of the sub-agent it named.
• Keeping a single set of books when acting for several principals.
• Collecting the principal’s credits without having been required and authorised to.
• Not transmitting received claims immediately, even where someone else closed the deal.
• Staying silent about a third party’s insolvency: subsection (d) names it expressly.
• Charging the principal the expenses your own activity generates.

These are the government pages this guide is based on.

• Poder Judicial de Puerto Rico

  Poder Judicial

  bvirtualogp.pr.gov