Q & A’s on Agency Law

by David Bentley
of Bentley and Co. Solicitors

Q. In the event of my death, am I
correct in understanding that my
personal representatives, on behalf
of my Estate, would potentially be
entitled to pursue a claim for
compensation, against all of my
various principals? I have written
agreements with some of the
companies I act as agent for, and
have always operated as a sole
trader.

A. Potentially, and assuming that you
continue operating on the same basis as you
currently are, the answer is “yes” – i.e.:- in the
event of your death as a sole trader, your
executors (or “personal representatives”)
would indeed be entitled to pursue a claim,
for (as appropriate, and depending on (a)
whether you had any written agreement
with any principal, and (b), if so, what any
such agreement provided for:-), either an
indemnity or compensation.
Following on from the above, some points to
bear in mind are, as follows:-
Firstly, in order to preserve any such claim to
an indemnity/compensation, your personal
representatives would have to effectively
notify the former principals concerned that
your Estate intended pursuing its statutory
entitlement to recover the relevant
compensatory amount, and do so within the
relevant strict time period following your
death [- and any failure to notify in this way
would then mean that no claim could then
be pursued, no matter for how much money
it could have been for];
Secondly, the tests and processes which
would be applied for assessing how much by
way of an indemnity/compensation you
may be entitled to would generally be the
same as would have applied had you lost the
relevant agency, and had been making a
claim in your lifetime; and Thirdly, it must be obvious that unless agents
m a k e t h e i r fa m i l y a n d i n t e n d e d
representatives aware of their Estate’s
potential rights on their death, no claims will
ever be pursued (as they won’t be known
about).
Finally, be aware that, depending on who is
deemed as having been the agent, possibly
no claim may arise.

Q. I currently have one very large
agency, and another one which is
more modest in terms of what it earns
me. I also just now have the
opportunity to take on another (i.e.:- a
third) agency, and am wondering as to
whether I can only do this if I have my
other two principals’ prior written
approval – what is the position as
regards that, please?

A. Unless you have otherwise agreed with
any of your principals either (a) as to how
many other agencies you will carry, and/or
(b) that you will seek that principal’s prior
written approval before you take on any
other agency, then, as long as the new
agency isn’t going to take up so much of
your time as to prevent you from properly
s e r v i c i n g y o u r e x i s t i n g p r i n c i p a l s ‘
requirements or isn’t going to involve you
selling products which are in competition
with what you already sell for your current
principals, I do not see that you have any
requirement to first of all have to get any
existing principal’s permission, to take up a
new agency opportunity.
My above advice is based on the premise
that, as a self employed person, you are
clearly not constrained by the sorts of
obligations which an employee owes to his
employer, and are thus entitled to maximise
your own profitability.
In this regard, and whereas representing a
number of different principals in the same
industry can benefit those companies for
which you are the agent, the importance of
ensuring that you do not over-stretch your
resources to the point where you cannot
properly service all of your principals, and
the importance also of ensuring that you do
not place yourself in a situation where you
are contracted to sell products, on behalf of
different principals, where those products
are in conflict with each other, cannot be
over emphasised.

Q. I have recently lost my driving
licence for nine months (due to
e x c e s s i ve s p e e d i n g ) , a n d a m
concerned as to whether this will
affect my standing with any of my
principals. What is your advice, please?
I am confident that I can make
s a t i s fa c t o r y a l t e r n a t i ve t r ave l
arrangements in respect to the various
agencies which I have, but am
concerned as to how any of my
principals may nevertheless react –
would any of them be entitled to (for
example) terminate my agency,
forthwith, for example?

A. Unless you have an agreement with any
of your principals to the effect that, in this
scenario, your agency would be terminated
forthwith, and irrespective as to whether
you were able to make any alternative
arrangements, then – provided always that
you can indeed make viable alternative
arrangements to enable you to properly and
effectively cover your territory area, and to
service the reasonable requirements of your
principals and the needs of your customers –
I would not expect your principals to (a) be
entitled (without affording you proper
notice) to terminate your agency, nor (b) to
do so.
As a rider to the above, I would just add that I
would expect my advice to potentially be
quite different if the circumstances of your
driving ban involved something more than
just low level excessive speeding – i.e.:- if it
could be viewed that what you had been
banned for was (e.g.) drink related or
otherwise reflected an offence which
wouldn’t generally be regarded as relatively
minor.

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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