FAQs about Agency Law

AGENCY LAW FAQS

What re the main provisions of the Commercial Agents Regulations ?

The Commercial Agents (Council Directive) Regulations 1993 apply to commercial agents only Under the Regulations, commercial agent is “a self-employed intermediary who has continuing authority to negotiate the sale and purchase of goods on behalf of another person (“the principal”), or to negotiate and conclude the sale or purchase of goods on behalf of and in the name of that principal…”

The most important provisions of the Regulations provide that a principal owes certain general duties to a commercial agent :-

  • To supply  essential documentation as to the goods concerned
  • To provide information which the agent needs to execute the contract
  • To inform the agent if he thinks that the number of transactions will be lower than expected.

An agent owes duties to the principal including :-

  • To make proper efforts to arrange suitable business
  • To provide the principal with relevant information he/she is/becomes awre of
  • To abide by the principal’s reasonable instructions.

In the absence of an agreement as to remuneration, the agent is entitled to remuneration customarily allowed to agents. If there is no such practice, the agent is entitled to reasonable remuneration.There are rules dealing with where remuneration is commissioned based and when it becomes due.

  • Regulations control the conclusion and termination of agency contracts
  • The agent is entitled to an indemnity or compensation
  • If the fixed term contract continues after the end of the term, it is converted into a contract for an indefinite period.
  • If a contract is for an indefinite period, it may be terminated by either party by notice.
  • Each party is entitled to request from the other a signed statement containing the terms of the agency.
  • The rules allow for immediate termination for breach or in exceptional circumstances