Tuesday, August 31, 2010

Swedish Law - Severance Compensation to Sales Agents - 31 § Sales Agency Act

According to § 31 of the Sales Agency Act a request for severance compensation must be lodged within one year from the termination of the agreement, which is consistent with the EC directive regulating. The provision is mandatory in the sales agent's favour, thus a shorter limitation period is not allowed.

This post concludes the series of posts on severance compensation to sales agents under Swedish law.

If you have questions regarding severance compensation to sales agents, please, either put your question as a comment below or send me an email, krister //dot\\ bruzelius //at\\ wallaw //dot\\ se

Monday, August 30, 2010

Swedish Law - Severance Compensation to Sales Agents - 30 § Sales Agency Act

30 § of the Sales Agency Act deals with the right to severance compensation, if the agent terminates the contract himself. The provision is mandatory to the sales agent's benefit and is based Article 18 of the EC Directive.

The agent is entitled to severance compensation only if
1. the termination is due to a circumstance attributable to the principal enabling the sales agent to terminate the agreement with immediate effect according to § 26 of the Sales Agency Act, or
2. because of the agent's age or illness or similar circumstances, the sales agent cannot reasonable be required to continue his activities.

As regards the first paragraph it should be noted that it includes termination due to breach of contract as well as termination "due to an important reason". Compare the commentary on § 29 above.

If the sales agent is a company or other legal entity, the second paragraph of the provision may be invoked in case of old age, sickness or death of centrally placed executives in the agency company.

Thursday, August 26, 2010

Swedish Law - Severance Compensation to Sales Agents - 29 § Sales Agency Act

According to § 29, the sales agent is not entitled to severance compensation, if
1. the principal has terminated the agreement because the agent's breach of contract, provided the sales agent has acted intentionally or recklessly;
2. the agency agreement is terminated by reason of the agent's bankruptcy, or
3. the sales agent and the principal agree to transfer the agency to another party.

The provision is mandatory for the sales agent's favour in that the sales agent does not need to accept less advantageous conditions than those prescribed by law.

It should be noted that the requirements of 29 § paragraph 1 are narrower than those on the right of early termination due to breach of contract (according to § 26 of the Act), which is a direct departure from the EC Directive. This means that upon termination by the principal as a result of the agent's breach of contract, the sales agent may still be entitled to severance compensation. It should further be noted that the principal’s termination "due to an important reason" does not deprive the sales agent of his right to severance compensation.

The provision does not require that a termination for breach of contract is actually performed. It is, however, that the agency relationship is terminated by ordinary dismissal or by appointment in close connection to the breach of contract by the sales agent.

Tuesday, August 24, 2010

Swedish Law - Severance Compensation to Sales Agents - 28 § Sales Agency Act

According to the Swedish Sales Agency Act 28 § Agent is entitled to severance compensation (“avgångsvederlag”) when the agency agreement ceases if and to the extent
1. the sales agent has provided the principal with new customers or has significantly increased trade with the existing group of customer and the principal will derive a significant advantage from such development, and
2. severance compensation is reasonable, given the totality of the circumstances, and particularly the loss to the agent of in respect of contracts with the customers mentioned in the first paragraph.

The severance compensation shall not exceed an amount equivalent to one year's remuneration, calculated at an average during the last five years or during the period in which the sales agent performed the agency, if shorter.
This provision is mandatory for the sales agent's benefit and is based in Article 17 of EC Directive (86/653/EEC).

In calculating the severance compensation the agent's saved operating costs shall be taken into account. Circumstances which could affect whether severance compensation shall be paid and the size of the compensation are i.a.
• the length of the contractual relationship
• the size of investments by the sales agent
• the sales agent's work efforts
• the sales agent's success in the market.

Should the sales agent decline an offer of an extension of a fixed-term contract or if the sales agent starts to sell competing products following the termination of the agency agreement, this may reduce his possibility to obtain compensation. Competition prohibitions applicable after the termination of the agreement may, on the other hand, have a positive effect on the possibility of the sales agent to receive a substantial compensation.

Monday, August 23, 2010

Swedish Law - Severance Compensation to Sales Agents

As I quite often get questions about the rules on severance compensation to sales agents, I will briefly cover the current rules in some coming blog posts.

Questions concerning agents are governed by Act (1991:351) on sales agency, usually referred to as the Sales Agency Act. Paragraphs 28-31 deal with issues of severance compensation to the sales agent in connection with the termination of an agency agreement.

* 28 § of the Sales Agency Act sets out the basic terms of when and under what conditions a sales agent is entitled to severance compensation
* 29 § of the Sales Agency Act sets out provisions about when severance compensation is not payable to the sales agent
* 30 § of the Sales Agency Act covers severance compensation when the sales agent himself has terminated the agency agreement
* 31 § of the Sales Agency Act establishes the time requirements for demands of severance compensation

One very important thing to remember is that the sales agent is not bound by contractual arrangements which are less favourable to him than the provisions of paragraphs 28 through 31.

In my next post I will present the contents of § 28 of the Sales Agency Act.

Friday, August 20, 2010

Swedish Law – Purchasing Real Estate in Sweden

I have received a question if a foreign (i.e. non-Swedish) lawyer may draft the Sale and Purchase Contract in respect of Swedish real estate.

My answer was roughly as follows:

There is no formal requirement that a Sale and Purchase Contract should be drafted by a Swedish lawyer. There is actually no requirement at all regarding who is entitled to draft the Sale and Purchase Contract. Even if it is most common that the real estate agent involved drafts the contract, it could be drafted by the parties themselves or by a third party.

However, I would assume that a Swedish seller would be hesitant to sign a Sale and Purchase Contract drafted by a foreign lawyer. In addition I am not sure that a foreign lawyer would be sufficiently acquainted with applicable Swedish law relating to transfer of real estate to safe guard her or his client as buyer.

Wednesday, June 03, 2009

Silence is the Enemy

Although this blog is intended to cover Swedish law issues I have to tell you about "Silence is the Enemy"

Silence is the Enemy is a campaign initiative against the rape and abuse of women and girls in Liberia and around the world started by Sheril Kirshenbaum in her blog The Intersection.

The initiative has also a Facebook Group to join.

In her original blog post Sheril Kirshenbaum wrote i a:
"Today begins a very important initiative called Silence Is The Enemy to help a generation of young women half a world away.Why? Because they are our sisters and children–the victims of sexual abuse who don’t have the means to ask for help. We have power in our words and influence. Along with our audience, we’re able to speak for them. I’m asking all of you–bloggers, writers, teachers, and concerned citizens–to use whatever platform you have to call for an end to the rape and abuse of women and girls in Liberia and around the world.

In regions where fighting has formally ended, rape continues to be used as a weapon. As Nicholas Kristof recently wrote from West Africa, ‘it has been easier to get men to relinquish their guns than their sense of sexual entitlement.’ The war has shattered norms, training some men to think that ‘when they want sex, they need simply to overpower a girl.’ An International Rescue Committee survey suggests 12 percent of girls aged 17 and under acknowledged having been sexually abused in some way over the previous 18 months. Further, of the 275 new sexual violence cases treated Jan-April by Doctors Without Borders, 28 percent involve children aged 4 or younger, and 33 percent involve children aged 5 through 12. That’s 61% age 12 or under. We read about their plight and see the figures, but it’s so easy to feel helpless to act in isolation. But these are not statistics, they are girls. Together we can do more. Mass rape persists because of inertia so let’s create momentum."

Many bloggers are blogging to support this initiative. I have noted i a Nicolas Kristof at the New York Times, Alun Salt in Archaeoastronomy and many many more

Friday, May 29, 2009

Swedish Bankruptcy Law – US Domiciled Swedish Debtor

I received the following comment/question to one of my posts on "Swedish Law – Company Reorganisation":

I'm not sure this is the right place to post this....I came across your blog doing some internet research on Swedish bankruptcy laws...

My husband is a Swedish citizen who took out a loan to start a photography business (I think it is actually a personal loan though). He met me in the US and we have been married here for a year now, struggling to make payments on just the interest alone as finding work for him here has been difficult. He could not afford the union dues for having his business open in Sweden so we closed that earlier this year.

This weekend our apartment was broken into and $7,000 of camera equipment that he used the loan to purchase was stolen. We do not have renter's insurance. He owes over twice that amount still ($17,000) on the loan, and now has no way of making money without his camera. We are considering filing bankruptcy in Sweden for his debt, but we are not sure how that works now that he is a resident here (still a Swedish citizen and the loan is Swedish). My income is barely enough to pay rent and buy groceries.

So it goes.

I would be incredibly grateful for any advice. If we go through with this, I am assuming we will need a lawyer to assist?


As the above question highlights an important difference between US and Swedish bankruptcy law I give my answer here as a separate blog post.

First of all I think it is very important to note that a private person is not released from his or her debts through bankruptcy proceedings according to Swedish law. This means that there is normally no reason for a private person to apply for bankruptcy in Sweden.

As your husband is domiciled in the US, I base the following short answer to that situation. Special rules apply to debtors domiciled in the Scandinavian countries and in an EU state.

A Swedish citizen domiciled in the US could be subject to an application for bankruptcy by a creditor. Such an application could be made with reference to the Swedish Code of Judicial Procedure, Chapter 10, Section 1, which reads:

A person with no known residence in or outside Sweden may be
sued at the place where he is sojourning. If he is a Swedish citizen
and sojourning outside the Realm or at an unknown place, he may
be sued at the place within the Realm where he last resided or

If he is declared bankrupt in Sweden, according to Swedish law, the bankruptcy estate will encompass, at least formally, all of his assets irrespective of whether such assets are in Sweden or outside. However, to what extent the Swedish bankruptcy receiver will get any cooperation from any state or federal authorities in the US in order to gain control of his US assets is a question for these authorities.

Swedish Law – SAAB Reorganisation - New Prolongation

The Vänersborg City Court announced this morning its decision that the SAAB reorganisation shall continue until August 20, 2009.

Wednesday, April 22, 2009

Swedish Law – Purchasing Real Estate in Sweden - Sale of Co-Owned Property

I have received a question about the sale of a property by a 50 % owner.


Is it possible for a 50% share owner of a property to order the sale of the entire property without the consent of the remaining partners?

As my answer may be hard to find among the old posts on Purchases of real estate in Sweden I publish it here.


Yes and no. I am a lawyer you know ;)

The rules of the Swedish Act on Co-Ownership (Lag (1904:48 s.1) om samäganderätt) apply.

According to this act, if a house or other real property is owned by more than one person, each co-owner, irrespective of the share he owns, has the right to go to court and ask the court to appoint a custodian, who will then arrange for the sale of the property through a public sale.