Amendments to some provisions of Federal Law concerning the commercial agencies

Amendments under Federal Law No. 11 of 2020 to some provisions of Federal Law No. 18 of 1981 concerning the commercial agencies


The Federal Law No. 11 of 2020 issued on 05-28-2020 published in issue No. 679 - The Fiftieth Year of the Federal Official Gazette has amended some of the provisions of Federal Law No. 18 of 1981 concerning the commercial agencies. As the amendment included replacement of some articles, the most prominent of which are the articles number: (1), (2), and (8), according to the following:




Article 1


Franchise shall be classified under commercial agencies

Where the first article of this law defined commercial agency as “the representation of the principal by an agent under a contract of agency, distribution, promotion, franchise, or provision of a commodity or service within the state in return for a commission or profit.” Whereas, in the past, the franchise contract was not included in the definition of a commercial agency. Thus, the amendment has settled a wide jurisprudential debate about the extent to which the franchise contracts are considered a form of agency contracts.




Article 2


Expanding the range of persons for whom are entitled to be as commercial agents

This article expanded the categories of persons who are entitled to be as commercial agents, to include each of the following categories:

  • A natural person, a citizen.

  • A public legal person.

  • A private legal person owned by public legal persons.

  • A private legal person wholly owned by natural persons, citizens.

  • Public joint-stock companies incorporated in the state, in which the share of state citizens' share in them is not less than (51%) of the company's capital.

Whereas in the past, the categories of persons who have been entitled to be as commercial agents were limited to natural persons or companies that are fully owned by natural citizens.




Article 8


The extension of the commercial agency contract

This article has included two major points. First point mentioned that in case of the death of the agent, the commercial agency contract shall be transferred to the heirs. While the second point indicated that the expiration of the commercial agency contract period is not considered a material reason for terminating the commercial agency contract.

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