The legal relationship between principal and agent is governed by the EC Commercial Agents Regulations. This legislation came into effect in 1993 and cannot be ignored. Sales agents have a set of inalienable rights under the regulations that are akin in some ways to employment rights. They protect the agent against unfair treatment, especially unfair termination, and they generally help clarify the relationship. They also provide a professional and secure environment for principals and agents to work together.
As a principal, you are strongly advised to put a formal agency agreement in place between you and your sales agents. Without an agreement the EC regulations will apply in their raw form, and these are designed to protect the sales agent, not the principal. Besides, it is best practice. Most sales agents will expect an agency agreement, and some will refuse to work without one. A good agreement will lay forth the terms of engagement so there are no misunderstandings. A poorly drafted agreement will either leave you under-protected, or may be too aggressive and undermine an agent’s security, and therefore commitment, and ultimately performance. It is counter-productive to be too one-sided. As the principal you have the opportunity to ensure that this agreement protects your own interests in the key areas, whilst remaining reasonable to both parties.
There are a small number of lawyers in the UK that specialise in agency law. AgentBase has been associated with many of the most prominent lawyers for many years, and many contribute legal articles to our website and monthly magazine.
Having a bespoke agency agreement drawn up for you by a specialist agency lawyer is of course the best option. It is however rather expensive. So in order to provide a more cost-effective solution we have teamed up with several leading specialist lawyers to develop our Legal Packs. They all contain a template agency agreement plus lots of other useful information and resources. They will suit the vast majority of situations and will save you around 80% compared with going to a lawyer.
- Legal Pack for UK companies contracting with UK sales agents for the sale of Goods
- Legal Pack for UK companies contracting with EU sales agents for the sale of Goods
- Legal Pack for UK companies contracting with UK sales agents for the sale of Services