FAQs about Agency Law

Who is agency law relevant to ?

Agency law affects companies who hire commercial agents (principals) or individuals who act as commercial agents (agents).

What is a commercial agent ?

A commercial agent is defined under the 1993 Regulations as any self-employed 3rd party who has been granted the authority to negotiate the sale or purchase of goods or to negotiate and conclude the sale or purchase of goods on behalf of another person

Would you recommend entering into an Agency agreement ?

It is important that all parties entering into a commercial agency agreement are fully aware of the terms of their individual contracts as well as the legal structure that governs agency law known as the Commercial Agents (Council Directive) Regulations 1993. These regulations outline the obligations and rights of Agents and Principals. These relate to how much commission the Agent is entitled to and what can trigger termination of the contract as well as when agents can receive compensation from the Principal for unlawful termination.

What services does Ealing solicitors provides ?

We act for both agents and principals.

We are able to advise the application of the 1993 Regulations upon our client’s commercial dealings. Draft and negotiate agreements that comply with our client’s interests and pursue or defend claims and legal proceedings.

Do I need a solicitor ?

All Agency agreements need to be set out clearly in writing. The Regulations give both agents and principals the right to receive from the other a signed written contract containing agreed terms.

Are all agency contracts automatically governed by the Regulations?

No not all types of agreements are covered but if your agreement is then you have certain duties you must abide by.

What are the Agents duties ?

They include making proper efforts to negotiate transactions to the benefit of the principal. The Agent must comply with all instruction given by the Principal as long as they are reasonable. Utmost care must be taken to preserve the principal’s confidential information and the agent must communicate to his principal all necessary information.

What are the principals duties ?

Principals must act in good faith when dealing with their agents. The regulations specifically state that principles must provide the agent will all necessary documentation relating to the agency role and pay his agent on time.

The Principal must inform the agent within a reasonable time whether a commercial transaction has been refused or will be carried out. The principal must obtain for the agent all necessary information in order for the agent to perform the agency contract within a reasonable period. The principal must inform the agent if he expects the number of commercial transactions to be much lower than what the agent normally expects.

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