Sales representatives contracts

Definition

Under Art. 347, Para. 1 of the ‘CoO’, a sales representative binds him- or herself under a sales representatives contract to mediate or conclude business of any kind (meaning sales business, not purchasing business) outside of the business premises of an employer (being the provision of a so called external service) for remuneration and for the account of an employer, who is a proprietor of a retail- manufacturing- or of any other type of trade enterprise operated on commercial lines.

The statutory basis

Sales representatives contracts are regulated under Art. 347a et seq. of the ‘CoO’. The requirements of Art. 319 et seq. of the ‘CoO’ are supplementarily applicable. In addition, the requirements of the Swiss Legislation governing the occupation of sales representatives (‘RGG – Reisendengewerbegesetz) [SR 943.1.] are to be observed.

Essential differences from usual contracts of employment

  • Under Art. 347a, Para. 1 of the ‘CoO’, the employment is to be regulated in writing between the parties. The necessity of the written form is not requisite for their validity (comp. Para. 2).
  • A sales representative is bound to visit customers (by providing an external service).
  • A sales representative is either to mediate- or conclude business. The authorisation to conclude business however requires the donation of a written power of attorney (comp. Art. 348b, Para. 1 of the ‘CoO’).
  • A sales representative is under a statutory duty of reporting (comp. Art. 348, Para. 3 of the ‘CoO’).
  • An employer is to remunerate a sales representative. Remuneration is to comprise a fixed amount- without commission or plus commission (comp. Art. 349a, Para.1 of the ‘CoO’).
  • Business tied to commission: when a sales representative is delegated a certain circle of customers, then the agreed- or usual commission is to be paid on all business mediated or concluded by the sales representative (comp. Art. 349b of the ‘CoO’).