[Commercial contracts](/en/legal/commercial-contracts/) are the legal instrument governing economic relationships between businesses and professionals in commercial transactions. Drafting them correctly is not a bureaucratic formality: it determines who bears the risk, how damages are calculated in the event of breach and which court or arbitrator resolves disputes. This guide analyses the main types of commercial contracts in force in Spain, the clauses that make the difference and the most common mistakes that generate avoidable [litigation](/en/legal/litigation-arbitration/).
Commercial Contract vs Civil Contract: The Regulatory Starting Point
The distinction between a commercial contract and a civil contract is not merely academic. It has direct consequences regarding limitation periods, joint and several liability, interest and competent jurisdiction.
Spain’s Code of Commerce of 1885 (in force with numerous amendments) governs commercial contracts as a specific category, applicable when three elements are present: the parties are business people or acting as such, the act is carried out with a profit motive, and the act is proper to commercial activity. The Civil Code applies as supplementary law (Art. 2 CCom) for everything not expressly provided for.
The most relevant practical differences are:
- Joint and several liability: Article 137 CCom establishes a presumption of joint and several liability (solidaridad) between co-debtors in commercial obligations, whereas the Civil Code presumes divisible liability (mancomunidad).
- Late payment interest: Commercial contracts are governed by Ley 3/2004 on measures to combat late payment in commercial transactions, which imposes a reference rate linked to the ECB rate plus eight percentage points when there is a delay in payment between businesses.
- Limitation periods: The CCom limitation periods are, in many cases, shorter than those under the Civil Code, requiring active monitoring of deadlines.
Beyond these general rules, there are specific laws governing particular commercial contracts: Ley 12/1992 on Commercial Agency, Ley 7/1996 on the Regulation of Retail Trade (franchising), Ley 16/2011 on Consumer Credit Contracts and the regulations on financial leasing (leasing), among others.
Main Types of Commercial Contracts in Spain
Commercial practice has generated a broad range of contract types, some covered by the Code of Commerce and others created by practice (atypical contracts). The most relevant for medium and large businesses are:
| Contract type | Main regime | Regulation |
|---|---|---|
| Distribution | Atypical (Commercial Agency Act by analogy) | No specific statute |
| Commercial agency | Typical | Ley 12/1992 |
| Commercial commission | Typical | Arts. 244–280 CCom |
| Supply | Atypical | Arts. 1450 et seq. Civil Code + trade customs |
| Franchise | Typical (partially) | Art. 62 Ley 7/1996 |
| NDA / confidentiality | Atypical | Ley 1/2019 on Trade Secrets |
| Intellectual property licence | Typical | Ley 24/2015 on Patents; Ley 17/2001 on Trademarks |
| Leasing | Typical | Ley 10/2014; DA 7ª |
| Factoring | Atypical | Trade customs and Ottawa Convention 1988 |
Atypical contracts — distribution, supply, factoring — are governed by the parties’ agreement, trade customs (Art. 2 CCom) and, supplementarily, the rules of the most analogous typical contract.
Distribution Contracts: Exclusive, Selective and Goodwill Compensation
Distribution contracts have no express statutory regulation in Spain. The distributor buys goods from the manufacturer or wholesaler and resells them in their own name and on their own account, bearing the commercial risk. This distinguishes them from agents: the distributor acts as an independent business person, not as a representative.
Exclusive vs. Selective Distribution
In exclusive distribution, the manufacturer commits not to appoint other distributors in a defined territory. From a competition law perspective, Regulation (EU) 2022/720 (new block exemption regulation on vertical restraints, in force since June 2022) requires that the market shares of both the supplier and the distributor do not exceed 30% for the exclusivity to benefit from automatic exemption. Above that threshold, the agreement requires individual analysis under Article 101.3 TFEU.
In selective distribution, the manufacturer selects its distributors using qualitative criteria (training, facilities, brand image) without territorial reservation. This is the standard model for luxury products, cars and premium electronics. The Court of Justice of the EU, in Coty Germany (CJEU C-230/16, 2017), confirmed that prohibiting sales through third-party platforms in selective distribution is compatible with competition law where the product requires an environment that matches its luxury image.
Goodwill Compensation in Distribution
Unlike an agent, a distributor has no statutory right to goodwill compensation. However, the Supreme Court has applied by analogy the regime of Article 28 of the Commercial Agency Act where there is equivalent integration of the distributor into the manufacturer’s sales network (STS, Civil Chamber, 5 November 2015). For this claim to succeed, case law requires demonstrating: (i) that the distributor contributed a stable and directly identifiable client base; (ii) that the manufacturer continues to benefit from that client base after termination; and (iii) that there is a significant economic imbalance. The lack of documentation of the client base contributed is the most common reason for rejection of such claims.
Standard clauses in a distribution contract should include: precise definition of the territory, annual minimum purchase commitments, recommended resale price policy (not imposed, to avoid competition issues), duration and notice for termination, and the regime for stock at the end of the contract.
Commercial Agency Contracts: Ley 12/1992 and Article 28
Ley 12/1992 of 27 May on Commercial Agency transposes Directive 86/653/EEC and precisely governs the relationship between the principal and the agent, who acts on a stable, independent basis in exchange for remuneration to promote acts or transactions on behalf of the principal.
The fundamental distinction from a distributor is that the agent does not bear the risk of transactions: they act in the principal’s name, which remains the contracting party vis-à-vis the end customer. The distributor, by contrast, buys and resells in their own name.
Goodwill Compensation Under Article 28
Article 28.1 of Ley 12/1992 gives the agent the right to goodwill compensation upon termination where three cumulative conditions are met:
- The agent has introduced new clients to the principal or has substantially increased transactions with existing clients.
- The principal continues to obtain substantial benefits from transactions with those clients.
- The compensation is equitable having regard to all the circumstances, in particular the commissions the agent will lose.
The maximum cap in Article 28.3 is the annual average remuneration received by the agent over the last five years (or over the entire duration of the contract if shorter). The Supreme Court has clarified in multiple rulings that this cap is not an automatic formula but a ceiling: the judge or arbitrator must assess the actual client base contributed, the continuity of benefit to the principal and the actual loss of future commissions to the agent (STS 5380/2012, of 20 July).
This compensation is non-waivable by the agent while the contract is in force (Art. 30 Ley 12/1992). Any prior agreement to the contrary is void, so clauses excluding goodwill compensation inserted in the agency contract itself have no legal effect.
Article 26 of the same Act adds damages where termination is due to a breach attributable to the principal, which is incompatible with goodwill compensation if both derive from the same breach.
Supply Contracts: Frequency, Price and Duration
A supply contract is the instrument by which the supplier commits to delivering movable goods or providing services on a periodic or continuous basis in exchange for a price. It is an atypical contract under Spanish law, although the Code of Commerce partially regulates commercial sale and purchase as a closely analogous type.
Its structural elements are:
- Subject matter: precise definition of the good or service, quality, minimum and maximum volumes, and packaging and delivery conditions.
- Price: may be fixed, variable (indexed to CPI, commodity prices or another index), or determined on each delivery according to a price list. In long-term contracts, price revision clauses are essential to avoid unforeseen imbalances.
- Delivery frequency: periodicity, quantity tolerances and procedure for requesting additional deliveries.
- Duration: may be for a fixed term (with the possibility of tacit renewal) or open-ended. In open-ended supply contracts, the notice period for unilateral termination is the most contentious clause in practice. The absence of an expressly agreed period creates uncertainty, as courts apply reasonableness and good faith criteria (Art. 7 Civil Code, Art. 57 CCom).
- Supply exclusivity: if agreed, its compatibility with competition law must be examined (Regulation 2022/720).
A frequently omitted clause is the force majeure and hardship clause. The COVID-19 pandemic and the supply chain disruptions of 2021–2022 highlighted the need to regulate what happens when performance becomes excessively burdensome. In the absence of an agreement, the Supreme Court applies the rebus sic stantibus doctrine restrictively, requiring that the change be unforeseeable, extraordinary and that it generate a serious imbalance between the obligations (STS 477/2014, 30 June).
Franchising: Ley 7/1996, the DIP and the Franchisor Register
A franchise contract is one by which the franchisor grants the franchisee the right to exploit a business system under their brand, know-how and ongoing support, in exchange for direct or indirect consideration.
Pre-Contractual Obligations: The DIP
Article 62 of Ley 7/1996 on the Regulation of Retail Trade (as amended by Ley 1/2010 of 1 March) requires the franchisor to deliver to the prospective franchisee a Pre-Contractual Information Document (DIP) at least twenty days before signing the contract or paying any amount. The DIP must contain at minimum:
- Identifying information about the franchisor and their legal representative.
- Description of the sector of activity covered by the franchise.
- Content and characteristics of the franchise and its operation.
- Structure and extent of the franchising network.
- Essential elements of the agreement (price, fees, support, duration, renewal, territorial exclusivity and termination).
Breach of this obligation does not automatically invalidate the contract, but may give rise to pre-contractual liability claims and, in serious cases, to nullity on grounds of defect of consent.
Registration in the Franchisor Register
Royal Decree 201/2010 created the Franchisor Register, under the Directorate General of Domestic Trade. Registration is mandatory for franchisors operating in Spain with a network of at least one franchisee, regardless of their national or foreign origin. Operating without registration constitutes a serious administrative infringement. Public consultation of the register allows prospective franchisees to verify the franchisor’s legal status before committing.
Franchise contracts are typically long-term (five to ten years) with renewal conditional on achieving targets. Post-term clauses — especially non-competition — must be temporally limited (Regulation 2022/720 allows up to one year for vertical restraints, with exceptions for know-how) and geographically defined to be enforceable.
Key Clauses in Any Commercial Contract
Regardless of contract type, there is a set of clauses whose absence or poor drafting is the most common cause of commercial litigation:
Exclusivity. The scope of the exclusivity must be precisely defined: territorial (municipality, region, country), channel (online, offline) and product. Ambiguous exclusivity is fertile ground for conflict.
Non-competition. The clause must be proportionate in duration, territory and subject matter to be valid. The Supreme Court applies a strict proportionality test: overly broad post-contractual non-competition clauses may be declared void or reduced by the courts.
Confidentiality. It supplements the pre-contractual NDA and should extend to the contract’s duration. It should expressly define what information is confidential, authorised recipients (on a need-to-know basis) and the procedure in the event of an unauthorised disclosure.
Penalty for breach. The penalty clause (Arts. 1152–1155 Civil Code) serves both a liquidation and a deterrent function. Its amount must be proportionate: Article 1154 Civil Code authorises judges to equitably reduce it where the principal obligation has been partially performed.
Termination. It should govern termination for breach (with or without prior notice), for change of control, for insolvency and for force majeure. In long-term contracts, including a renegotiation mechanism for unforeseen changes (hardship clause) avoids reliance on unpredictable case law.
Governing law and dispute resolution. In domestic contracts, choice of jurisdiction can be a tactical advantage. In international contracts, choice of governing law is governed by the Rome I Regulation (593/2008) and choice of forum by Brussels I bis (1215/2012), with primacy given to any valid arbitration agreement.
Do you need to draft, review or renegotiate a commercial contract? At BMC our commercial law team assists with distribution, agency, supply and franchise agreements, incorporating the clauses that protect your interests and planning the dispute resolution mechanism that best suits your commercial relationship. Request a free initial consultation.
