{"id":11424,"date":"2022-02-11T15:32:25","date_gmt":"2022-02-11T15:32:25","guid":{"rendered":"https:\/\/vila.es\/?p=11424"},"modified":"2022-02-11T15:32:25","modified_gmt":"2022-02-11T15:32:25","slug":"is-unilateral-termination-possible-in-a-mediation-or-brokerage-contract","status":"publish","type":"post","link":"https:\/\/vila.es\/en\/contracts\/is-unilateral-termination-possible-in-a-mediation-or-brokerage-contract\/","title":{"rendered":"IS UNILATERAL TERMINATION POSSIBLE IN A MEDIATION OR BROKERAGE CONTRACT?"},"content":{"rendered":"

The judgment issued by the Provincial Court of Madrid of 30th<\/sup> June 2021 (ECLI:ES:APM:2021:10220) examines a case wherein, following the payment of an initial invoice, the principal unilaterally desists from a contract entered into with a mandatary regarding the selection and presentation of qualified candidates for certain job vacancies.<\/p>\n

The sixth and seventh legal grounds of the judgment study the legal nature of the contract, the principal\u2019s power of withdrawal, and the effects thereof respectively.<\/p>\n

A) With regard to concept and nature<\/u>, judgment of the Supreme Court of 30th<\/sup> July 2014 is referred to which explains: \u201cin mediation or brokerage contracts the mediator must be limited in principle to bringing together a prospective buyer and seller of a given object, but in any case, the activity must be implemented in order to achieve the fulfilment of the final contract\u201d. Likewise, the judgment states that: \u201cthe legal relationship between the client and mediator does not exclusively arise from a contractual mediation transaction, since the obligations and rights furthermore require the fact that the intermediary has contributed effectively to the parties concluding the transaction and this Court has consistently reiterated that such a contract is subject to the condition precedent of the entering into of the intended contract, for the accrual of fees, unless expressly agreed\u201d. It maintains that the right to receive the commission arises when unequivocal acts of mediation are crystallised in the operation in which the agent and the agent\u2019s right to retribution for the rendering of services exists \u201cboth if the transaction is carried out with the immediate intervention of the agent, as well as when the principal takes advantage of the agent\u2019s action to carry it out directly\u201d.<\/p>\n

B) With regard to the power of withdrawal of the principal<\/u>, it considers that this constitutes a traditional concept set by Roman Law and contained in the French Code and most modern codes, that the mandate and the commission are revocable at the will of the principal, the general rule being revocability and the exception being to the contrary<\/u>, because irrevocability has been expressly agreed or the contract serves as a formal instrument for the underlying business.<\/p>\n

The analogical application, to a contract of commission, of the provisions of articles 279 of the Commercial Code (regarding the commission) and 1733 of the Civil Code (regarding the mandate) is possible due to the similarity between both businesses, which form a part of the contracts called \u201ccollaboration and management of the interests of others\u201d. It refers to the judgment of the Supreme Court of the13th<\/sup> November 2008, which explains that although the power of termination is exceptional within the framework of contractual relationships of a bilateral nature, in the mediation contract this is explained by its very nature, based on mutual trust. Likewise it refers to judgment of the Supreme Court of 6th<\/sup> October 2005 which declares that the mandate cannot be continued following a lack of trust such as that tied to an action which is disloyal or contrary to good faith on the part of the mandatary.<\/p>\n

In short, revocation, understood as a declaration, which is unilateral and effective upon communication and receipt, of the will to validly terminate the contractual relationship between the parties, is applicable as a cause of termination to the mediation contract, provided that there is a true will for revocation and that it responds to a just cause.<\/u><\/p>\n

C) What are the effects of the revocation<\/u>? The seventh legal foundation states:<\/p>\n

i) It is consolidated doctrine that revocation does not generate more rights than those which correspond to the transaction subject to mediation, prior to the mediator becoming informed of the will for revocation.<\/p>\n

ii) Compensation is reserved for cases in which unilateral notice of termination is abusive or contrary to good faith.<\/p>\n

iii) Financial compensation is not always applicable when a contract based on mutual trust is terminated by revocation, but only in those cases in which the revocation:<\/p>\n