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GAZETTE
JANUARY/FEBRUARY 1987
E.E.E. Directive on
Product Liability
The E.E.C. has issued a Directive
on Product Liability which has
important implications for Irish Law.
The Directive, which requires
member States to bring in the laws
and regulations necessary to com-
ply with its provisions not later
than the 30th July, 1988, sup-
plements the existing remedies in
tort and contract.
The essence of the Directive is
that the producer shall be liable for
damage caused by a defect in his
product. Liability is based, not on
wrongful conduct
by the producer,
but merely on proof of the fact that
a defect in the product caused the
plaintiff damage. Under Article 6 a
product is defective when it "does
not provide the safety which a
person is entitled to expect" tak-
ing all circumstances into account.
As the key word is
safety,
products
that are safe but shoddy do not fall
within the scope of the Directive.
Articles 2 & 3 define "produc t"
and "producer" and the onus of
proof is clearly on the injured
person.
A general limitation period of 3
years, to run from the day on which
the Plaintiff became aware or
should reasonably have become
aware, of the damage, the defect
and the identity of the producer,
will apply to proceedings for
damages under the Directive.
However, the rights of an injured
person are to be extinguished on
the expiry of 10 years from the
date on which the producer put the
product into circulation — unless
proceedings have been instituted in
the meantime.
The Directive provides five
defences to the "strict liability"
principle and also provides for con-
tributory negligence on the part of
the injured person.
Practitioners are referred to the
comprehensive article on the Direc-
tive by Mr. William Binchy in the
March & April 1986 issues of The
Law Society Gazette for further
information.
E.E.C. Directive on
Self Employed
Commercial Agents
Present Progress of Directive
The E.E.C. Commission first sub-
mitted this draft Directive to the
Council in January, 1979. The pro-
posal was intended to eliminate
distortion of competition arising
because of different national laws
relating to agency arrangements. In
our jurisdiction such contracts are
not constrained either by Statute or
custom and practice. In Civil Law
jurisdictions agents have rights,
particularly rights arising on ter-
mination of agencies, which do not
arise here.
The Directive was adopted by the
E.E.C. in December, 1986, and must
be implemented in Ireland by 1
January, 1994. When implemented
it will have a significant impact on
the relations between agents and
their principals as it will not be
possible to contract out of certain
provisions including those which
will entitle the agent to minimum
compensation on the termination of
his contract.
The Directive provides effective-
ly a model contract including such
material as:
(a) the definition of "Commercial
Agent". The definition excludes,
on the one hand, distributors
who operate on a principal to
principal basis and agents who
are employees but who are
remunerated partly on a com-
mission basis (Art.3);
(b) the obligation to act in good
faith, to supply relevant infor-
mation, to keep principals'
money separate from his own,
to keep proper accounts
(Art.5);
(c) to protect commercial or indus-
trial secrets (Art.6);
(d) permitting the agent to carry
on other activities provided
they do not conflict with his
obligations to his principal (Art.
7);
(e) entitling the agent to indemni-
ty by his principal for any claim
for damage if the claim results
from a breach of industrial,
commercial or other rights by
the principal (Art. 8);
(f) delegating to the agents
authority to represent the prin-
cipal (Art.9);
(g) obliging the principal to act in
good faith and assist the agent
(Art 10);
(h) defining agent's right to
remuneration and the cir-
cumstances in which the en-
titlement arises (Articles 11,
12, 13, 15, 16, and 17);
(i) providing for Special Commis-
sion where agent is obliged to
collect monies for his principal
(Art. 14);
(j) principal's obligation to provide
a statement of account monthly
(Art. 18);
(k) agent's right to indemnity even
where principal fails to make
full use of his services and his
right to reimbursement of ex-
penses (Art. 19 & 20);
(i) special provision for
del
credere
agents;
(m) right of each party to receive
written statement of terms of
contract and of its termination
(Arts. 23 & 24);
(n) definition of date of termina-
tion of contract for a specific
term (Art. 25) and of contract
for an indeterminate period
(Art. 26) which shall not be
less than six months;
(o) circumstances in which either
party may terminate (Art. 27);
(p) provisions dealing with agent's
rights to damages or indemnity
on breach or non renewal. The
indemnity to be not less than
1/10 of the agent's annual
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