In 30 seconds
An agent in Italy has statutory rights on termination, including a possible indemnity and fixed notice periods. A distributor has no statutory indemnity, but sudden termination can still lead to damages. The label you give the contract does not decide the rules: the substance does.
Many US and UK companies enter Italy through a local agent or distributor. The contract is often a short English template. Years later, when the relationship ends, the Italian partner asks for money the template never mentioned. This guide explains the main rules.
Agent or distributor?
| Agent | Distributor | |
|---|---|---|
| Acts | Finds customers, you contract with them | Buys from you and resells in its own name |
| Pay | Commission | Resale margin |
| Statutory rules | Civil Code arts. 1742-1753 and, where applicable, collective agreements | General contract law; agency rules are sometimes used by analogy |
| Indemnity on termination | Possible | No statutory indemnity |
Courts look at what the parties really do. A “distributor” who in practice only finds customers for you may be treated as an agent.
Termination indemnity for agents
Under art. 1751 of the Civil Code, according to specialist guides, an agent may be entitled to an indemnity if it brought new customers or substantially increased business with existing ones, you still benefit, and payment is equitable. The amount is capped at one year’s commissions, calculated on the last five years. The claim must be brought within one year of termination. It is excluded in some cases, for example when the agent terminates without a recognised reason or when you terminate for the agent’s breach.
Collective agreements can add other indemnities. A court of the EU has held that the agreement cannot replace the statutory indemnity unless it always gives the agent at least as much.
Frequent case
A problem that happens often. Frequent case described in general terms: names, places and details do not refer to real people or cases.
A UK manufacturer signs a short “distribution” contract with a company in Campania. The Italian firm finds the customers, receives a percentage and never takes stock. When the manufacturer ends the contract with one month’s notice, the Italian firm claims the rights of an agent. The outcome depends on how the relationship worked in practice.
The best path for you
Usually the best path is: (1) decide at the start whether you want an agent or a distributor, and write the contract to match the real arrangement; (2) set realistic notice periods; (3) budget for a possible indemnity when you plan to end an agency; (4) keep records of results. This helps avoid claims at the end.
Facing a similar situation? You can send your documents to the firm for an assessment, from anywhere in the world.
Notice and non-compete
- Notice for an open-ended agency: according to guides, one month in the first year, two in the second, three in years three to five and six months from the sixth year, unless the parties agree longer periods.
- Fixed-term contracts can usually be ended early only for good cause; if the agent keeps working after expiry, the contract may become open-ended.
- Post-contract non-compete for agents: in writing, up to two years, limited by territory, customers and products, with compensation.
What to put in writing
- Territory, products, exclusivity and sales targets.
- How commission or margin is calculated and when it is paid.
- Notice, termination for cause and what happens to stock and customer data.
- Forum and governing law: see our guide.
How attorney Fiorentino can follow you
- Check whether your relationship works as agency or distribution in practice.
- Review or draft the contract with notice, indemnity and non-compete in mind.
- Assess the exposure before you end a relationship.
Frequently asked questions
Does an English or New York law clause remove Italian agency rules?
Not necessarily. Some agency rules are protective of agents and may apply anyway. It depends on the facts.
Is the indemnity automatic?
No. The conditions in art. 1751 must be met, and the claim has a one-year deadline.
Can I use one contract for several European countries?
Rules differ by country. Check each market.
Can the firm draft the contract?
Yes, for the Italian side, in cooperation with your counsel.
Related guides
Learn more: Legal guides from Studio Legale Fiorentino.
A company dispute or project in Italy?
Every situation must be assessed on the documents of the specific case. You can consult the firm from anywhere in the world: by video call, phone, WhatsApp or email. Appointments in person in Naples (Piazza Giovanni Bovio 22 and Via Monte di Dio 14), Rome and Bari.
Information updated on October 13, 2026. This is general information, not legal advice. The firm does not advise on United States or United Kingdom law or taxes.
Do you have a similar issue?
Every situation depends on the documents of the specific case. You can contact the firm from anywhere, remotely.