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Legal Support when creating Commercial Agency Agreements

When it comes to the law, agency agreements are governed by the Commercial Agents (Council Directive) Regulations 1993 which set out each party’s duties and strengthen the agent’s position with regards to the principal. In particular, Regulation 3 provides that the agent must:

  • make proper efforts to negotiate and, where appropriate, conclude the transactions they are instructed to take care of;
  • communicate to their principal all the necessary information available to them; and
  • comply with reasonable instructions given by their principal.

On the other hand, Regulation 4 provides that the principal must:

  • provide their commercial agent with the necessary documentation relating to the goods concerned;
  • obtain for their commercial agent the information necessary for the performance of the agency contract, and in particular notify their commercial agent within a reasonable period once they anticipate that the volume of commercial transactions will be significantly lower than that which the commercial agent could normally have expected; and
  • inform their commercial agent within a reasonable period of their acceptance or refusal of, and of any non-execution by them of, a commercial transaction which the commercial agent has procured for them.

Agency Agreement

Although each agreement will ultimately be different depending on the type of relationship the parties want to create, there will be common features regarding the principal’s control, the terms of payment of the agent, who will bear the commercial risks, the obligation of both parties to act in good faith and their duties to provide information to each other.

An agency agreement will not only provide guidance to the parties as to their rights and obligations, but also it will provide them with security on their position should a dispute arise. Therefore, particular care is required for specific provisions such as authority, territories and restrictions with a view to anticipating any potential claim and factor in any possible outcome.

Termination of the Agreement

The termination of a contract is an extremely important area for both parties and it is therefore crucial to agree the terms of a termination from the get go. This would involve considering notice periods, return of confidential information, restrictive covenants, effects of termination and dispute resolution methods. This is a way for the parties to determine how to deal and, hopefully, stop a dispute from arising, most likely using an Alternative Dispute Resolution method, such as mediation or arbitration.

Our Corporate Commercial Team has a wide range of experience in drafting and reviewing agency agreements and will therefore be able to provide you with advice on the drafting of an agency agreement or assist you with any unwanted dispute.

Contact the Franklins Corporate Commercial team

If you have any questions about commercial agency agreements, please don’t hesitate to contact our team of experts who are on hand and ready to help you.

Frequently Asked Questions about Commercial Agency Agreements

What is a commercial agency agreement?

A commercial agency agreement is a legal contract creating a fiduciary relationship whereby the first party (“the principal”) agrees that the actions of a second party (“the agent”) binds the principal to later agreements made by the agent as if the principal had himself personally made the later agreements. Agency agreements are used in many commercial contexts, including selling goods and services, hiring intermediaries, and in some cases, employment.

How can Franklins Solicitors assist with agency agreements?

Franklins Solicitors offers comprehensive support for drafting, reviewing, negotiating, and enforcing agency agreements. Our services include:

    • Advising on the appropriate type of agency agreement for your business needs.
    • Drafting tailored agreements to protect your interests and ensure legal compliance.
    • Reviewing existing agreements to identify potential issues and suggest improvements.
    • Assisting with negotiations to ensure fair terms.
    • Providing guidance on the termination of agency agreements and resolving disputes that arise.

Why is legal support important for agency agreements?

Legal support ensures that your agency agreements are robust, compliant with relevant laws, and capable of protecting your interests, especially in situations of dispute. Expert legal advice can help prevent common pitfalls such as unclear obligations, liability issues, and problems with agreement termination. Additionally, understanding the legal implications of these agreements can help maintain positive working relationships between principals and agents.

What should be included in an agency agreement?

While the contents can vary depending on the specific arrangement and jurisdiction, a comprehensive agency agreement typically includes:

  • The parties’ details and roles.
  • The scope of the agent’s authority and duties.
  • Duration of the agreement.
  • Compensation details (commission rates, payment schedules).
  • Terms regarding exclusivity or non-exclusivity.
  • Provisions for termination.
  • Dispute resolution mechanisms.
  • Confidentiality clauses.

How long does it take to draft or review an agency agreement?

The timeline can vary based on the complexity of the agency arrangement and the amount of negotiation required. Drafting a straightforward agreement might take a few days, whereas more complex situations requiring extensive negotiations could take weeks or longer. Franklins Solicitors aims to work efficiently to meet your needs and deadlines, providing clear timeframes at the outset.

Can Franklins Solicitors help negotiate the terms of an agency agreement?

Yes, our team has extensive experience in negotiating the terms of agency agreements. We work closely with our clients to understand their priorities and leverage our legal expertise to secure terms that are favourable and fair, while also ensuring the agreement’s enforceability and compliance with applicable laws.

What are the costs associated with obtaining legal support for agency agreements?

Costs for legal support services vary depending on the complexity of the agreement, the level of customisation required, and whether negotiation support is needed. After an initial consultation to understand your needs, Franklins Solicitors provides a transparent fee structure — either a fixed fee for straightforward services or an hourly rate for more complex requirements.

How do I engage Franklins Solicitors for assistance with an agency agreement?

To engage our services, simply contact us via our website or by phone to schedule an initial consultation. During this session, we’ll discuss your specific needs regarding the agency agreement, outline how we can assist, and provide an overview of next steps including timeframe and cost.

Contact the Franklins Business Services team

If you have any questions about business services, please don’t hesitate to contact our team of experts who are on hand and ready to help you.