The Brokerage contract

In Switzerland, the basic principle of freedom of contract applies. This gives every person the freedom to decide, within the limits of the law, with whom and with what content they wish to conclude a contract. Nevertheless, it is possible to resort to specific arrangements predefined in the law if necessary for the respective transaction. One of these contracts laid down in the law is the brokerage contract. This is common in various industries, such as real estate.

On the basis of the brokerage contract, the commissioning party undertakes to pay the broker a fee if the broker’s action leads or contributes to the conclusion of the agreement sought by the commissioning party. However, the broker is not entitled to conclude a contract on behalf of the principal. 

The brokerage contract has three different manifestations. A distinction is made between: a reference broker, an intermediary broker, and a feeder broker. These three manifestations represent a kind of gradation. In particular, the reference broker provides the client with the name of a specific contractual partner, whereas the intermediary broker brings the client and the contractual partner together. Finally, the feeder broker actively attempts to bring about the conclusion of the contract.

The brokerage contract shows various similarities to other types of arrangements, such as the commercial agency contract, the simple agency contract, and the commission contract. 

In comparison to the commercial agency contract, the broker does not perform his brokerage activities for a specific principal on a permanent basis, but is only active for the principal in one or more specific cases at a time. The relevant difference resides primarily in that the agent of a simple agency contract is already remunerated in the assignment for diligent activity, whereas the broker is basically measured by his successful conclusion of the intended transaction owed. 

Subsidiary to the legal provisions of the brokerage contract will apply the provisions of a simple agency contract to the brokerage contract. Thus, the conclusion and the brokerage contract’s termination are bound to the same regulations as the simple agency contract.If you have any questions regarding the brokerage contract, please do not hesitate to contact