Q & A’s on Agency Law

by David Bentley
of Bentley and Co. Solicitors

Q. I noticed that in several of the
Answers in last month’s Q’s and A’s, you
mention a written agreement. I
however understood that, in some
cases, we as agents are better off
without a written agreement.

I understood the EU law covering
agents actually makes a written
agreement an unnecessary thing and,
in a lot of cases, gives us more
protection than a written agreement.
Do I have a misunderstanding?

A. I can answer this reasonably succinctly:-
The best position always is that you do have a
written contract, but that that contract
contains provisions which are (obviously) in
your own interests – a contract in writing is
thus always the best option, but the problem
with any contract which an agent may be
asked to sign by his principal (and which
document has likely been drafted on its behalf
by the principal’s own lawyer) is that that
contract might very well be heavily weighted in
the principal’s favour, and would thereby water
down certain of the rights which you would
otherwise have, pursuant to the Commercial
Agents Regulations.

You are correct when you say that the
Commercial Agents Regulations do afford
agents a good deal of protection, and also that
that protection exists notwithstanding that
the agent does not have any written contract.
A detailed written contract therefore, and
depending on what it contains, can either (a)
(and as I say) deplete (or even take away
completely) certain of the rights which the
Regulations would otherwise provide for you,
(b) enhance your s tatutory r ight s ,
considerably, or (c) be “neutral” in terms of
neither enhancing nor diminishing your rights,
but at least accurately record the terms of your
appointment.

Following on from the above, and in summary,
all that certain of my Q’s and A’s last month
were highlighting is that where an agent does
have a written agreement, that document has
to be considered in assessing any situation, as
any one or more of its provisions may be
relevant in determining my answer.

Q. I am concerned as my longest
standing principal has recently
changed its company name – its
letterhead and references on the web
site have all been altered to reflect the
name change accordingly, and the
reason for my concern is that the
company in question engages a dozen
or so agents and my (and my
colleagues’) worry is that the change
of name might be a scheme to try to
get rid of us at some point, without
having any liability to have to pay any
compensation – what should we do
about this?

A. The first issue to establish is as to whether
your principal is a limited company or not:-
i.e.:- if your principal is not a limited company
and the name change does not reflect any
change in the ownership of the business, there
is then no need to have any concerns with this
– the name change would appear to have no
effect whatsoever vis-à-vis your own position

Secondly (and assuming that we are in fact
dealing here with a limited company), we need
to establish whether the change in name is in
respect to that limited corporate entity which
is already your principal (i.e.:- that company
merely changing its name at Companies
House), or whether instead we are concerned
here with an entirely new company having
been established, and that your principal is
attempting to assign your agency across from
the old company to the new one.
Following on from the above, the points to
note (with regards to a change of name in
respect to a limited company) include, as
follows:-
(And to reiterate:-) a limited company merely
changing its name (and whether that be
slightly or drastically) should be of zero effect
from an agent’s point of view – i.e.:- if his
agency before the name change was with that
limited company which is registered at
Companies House with company registration
number 12345678 and, after the name change
has been effected, is still with that limited
company registered with registration number
12345678, then the change of name would
appear not at all to be a point of issue or
concern, from the agent’s point of view.

Secondly (however) if the principal has actually
and instead undergone some sort of corporate
re-structuring, and, in doing so, has created a
new limited company altogether and, as part
of the restructuring process, has sought to
unilaterally assign (without the agent’s
knowledge or consent) the agent’s contract to
a new company, that is another matter, and
definitely something which requires urgent
investigation and clarification.
In part depending then on whether or not you
had a written agreement with the principal
and, if so, whether that agreement contained a
provision enabling the principal to make such
an assignment without your consent, your
principal cannot transfer your agency to
another entity, without you being a consenting
party to that process.

Q. An agency which I had with a
Danish company has recently
terminated, and I am wanting to
pursue a claim for compensation. I
signed a contract with this company
some years ago, and the principal has
said to me that Danish law would
govern the outcome of my claim –
what is your advice, please?

A. As you say that you had a written contract
with this principal, I would need to see a copy
of that, and to establish what it provided for –
for example, if it validly provides that Danish
law governed your relationship with the
principal then (with Denmark being an EU
State, and the contract apparently validly
specifying a binding choice of law) then that
would ordinarily be the position (i.e.:- that
Danish law would apply in this case) and it
would not matter that (and as I am assuming
might be the factual position here:-) you
carried out your agency functions on behalf of
this particular principal in the UK.

David Bentley is a Partner
with Bentley and Co.
Solicitors and specialises
in agency law.

7 Littlemoor Road,
Pudsey, Leeds, LS28 8AF
Tel: 0113 236 0550
www.bentleyandco-solicitors.com

Disclaimer: This column does not contain legal advice and is for general guidance only. Agentbase, Bentley and Co. Solicitors and the writer accept no liability in connection with the general guidance given in this column. Please ensure that you obtain legal advice before acting in reliance upon anything in this article. For example, please be clear that the answers given in this column may not cover all possible angles, aspects, relevant considerations and/or points
of law and so that all or any information which is given above needs in every instance to be referred for legal advice for clarification and amplification, before being relied upon

 

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