Agency Agreements
Contact with us we are here to hear you
Book Appointment
Introduction
An Agency Agreement is a legally binding contract between a principal (the party appointing an agent) and an agent (the party authorized to act on behalf of the principal). Under UK law, agency relationships are primarily governed by common law principles, supplemented by statutory provisions such as the Commercial Agents (Council Directive) Regulations 1993 (for commercial agents in the EU/UK).
This guide outlines the key elements, rights, and obligations under UK agency agreements.
Types of Agency Agreements
Agency agreements in the UK can take various forms, including:
- Commercial Agency Agreements (regulated under the Commercial Agents Regulations 1993)
- Employment Agencies (regulated under the Employment Agencies Act 1973)
- Non-Exclusive Agency Agreements (agent can represent multiple principals)
- Exclusive Agency Agreements (agent has sole rights to represent the principal in a specific territory)
- Del Credere Agency (agent guarantees payment from customers)
Key Terms in an Agency Agreement
A well-drafted agency agreement under UK law should include:
a) Parties Involved
- Names and addresses of the principal and agent.
- Whether the agent is an individual, partnership, or company.
b) Scope of Authority
- Whether the agent has actual authority (express or implied) or ostensible authority (apparent authority).
- Limits on the agent’s power (e.g., can they enter contracts on behalf of the principal?).
c) Duration & Termination
- Fixed-term or indefinite agreement.
- Notice period for termination (minimum notice may apply under the Commercial Agents Regulations).
- Post-termination restrictions (e.g., non-compete clauses).
d) Commission & Remuneration
- How the agent is paid (e.g., commission, fixed fee, or mixed structure).
- When commission is earned (e.g., on sale completion or customer payment).
- Entitlement to post-termination commission under the Commercial Agents Regulations.
e) Duties & Obligations
- Agent’s duties: Act in good faith, follow principal’s instructions, avoid conflicts of interest.
- Principal’s duties: Provide necessary information, pay commission on time, indemnify the agent where applicable.
f) Confidentiality & Data Protection
- GDPR compliance if handling personal data.
- Non-disclosure clauses to protect business information.
g) Governing Law & Dispute Resolution
- Jurisdiction (usually English law or Scottish law).
- Mediation, arbitration, or court proceedings for disputes.
Termination & Compensation Under UK Law
a) Termination Rights
- Either party may terminate with reasonable notice (unless for breach).
- Under the Commercial Agents Regulations, minimum notice applies:
b) Compensation or Indemnity
Under the Commercial Agents Regulations 1993, agents may be entitled to:
- Compensation (for damages suffered due to termination) or
- Indemnity (a capped payment based on past commissions).
This does not apply to self-employed sales representatives or non-commercial agents.
For expert assistance at any stage of the appeal or judicial review process, it is advisable to consult with immigration solicitors or legal advisers who specialize in these areas.
