Judicial principles and studies
Settlement with an Exclusive Sole Distributor, Agency in Contracting, and Its Effects
The study summarizes how a settlement signed by a worker with the employer’s exclusive sole distributor can bind the employer when the distributor acted under a mandate, and highlights the relevance of agency rules in contracting.
Updated: 10 September 2026
Prepared and reviewed by: Ashraf Al-Khawaja
Subject
The points examine the effect of a settlement concluded by a worker with the employer’s exclusive and sole distributor for the period of employment, and how that settlement relates to the legal relationship between the worker and the employer.
Summary
A settlement signed with the exclusive distributor encompasses the worker’s claims against the employer and produces legal effects vis‑à‑vis the employer. The absence of an explicit reference in the termination agreement to the employer or to the distributor acting as an agent does not negate those effects if it is established that the employer entrusted the distributor with concluding the termination by mutual consent and paying the specified amount; such an entrustment constitutes a mandate in contracting and falls within agency rules under the relevant civil code provisions (Arts. 108, 109, 113). If the worker was aware of the mandate when signing, the settlement’s rights and effects are attributable to the principal (the employer).
Practical significance
The points indicate that a settlement concluded with an authorized distributor can bind the employer when a mandate exists and that the worker’s knowledge of the mandate is consequential to this effect. This summary is for general educational purposes and is not a judicial text or legal advice.
Sources and references
Verify the official text and latest amendments before relying on this material professionally.