Solicitors for business agent contracts

The law of agency in the UK is complicated. We have experience in helping both agents, and principals.

Our services and experience

• Expert Legal Guidance - drafting, reviewing, and negotiating commercial agency agreements.
• Compliance with the Commercial Agents (Council Directive) Regulations 1993 - ensuring your agreements meet all legal requirements.
• Tailored Agreements - to suit your industry, whether you’re a principal or an agent.
• Risk Management - advice on liability, indemnities, termination clauses, and commission structures.
• Termination & Compensation - clear guidance on agent rights to compensation or indemnity on termination.
• Dispute Resolution - support, including breach of agreement, non-payment of commission, or termination issues.

Key clauses in a business agent agreement

The common features of a principal and agent relationship include:

• Control – The degree to which the principal retains control over the agent’s authority and transactions.
• Payment – The terms by which the agent will get paid commission for selling the principal’s products;
• Risk – the principal, not the agent, usually bears the commercial risk and direct responsibility for transactions with customers.
• The agent’s legal obligations – the agent concludes transactions on behalf of his principal. The agent should comply with documented instructions, such as pricing, and the range of goods/services sold and supported.
• Defined territory -the agent or distributor must not actively solicit sales outside the agreed geographic area or attempt to make sales to customers excluded in the agreement.
• Non-competition – restricting the agent  from working with competitors and/or not manufacturing or supplying goods or services competing with those covered by the agency agreement.
• Brand protection – the protection of your business’s brand and intellectual property will be important. We can review arrangements to make sure you have the best protection of intellectual property in place to stop abuse.
• Good faith – implied into any agency agreement is that the principal and agent act dutifully and in good faith. Without care and attention, it is easy to fall foul of this requirement.
• Information – obligations on both sides. The agent should be required to report on prospects, sales and other relevant feedback. The principal should provide the agent with the necessary information and assets to generate sales.
• Exclusivity under the agency agreement – do you want country or territory exclusivity as agent? If so, and if agreed with the principal you may have to agree not to work with competitors.
• Payment terms – we ensure agents are protected from any pitfalls whereby the principal might delay or withhold payments.
• Preventing the principal selling direct – agents spend significant time and effort developing strong business relationships with customers. It’s important to ensure the principal  cannot sell direct to those customers using direct sales and marketing campaigns.

Implied legal protection for agents

In most countries there are some laws to protect agents. Every country has different rules and regulations. For both the principal and the agent, getting caught by these protections is expensive, and potentially diminishes your business’s valuation.

The UK has in force regulations that entitle a commercial agent to compensation on termination of an agency agreement. Broadly, the commercial agent is compensated for the damage he or she suffers as a result of the termination of relations with the principal.