Here you will find all of the Legal Surgery articles from our magazine, since March 2009 (most recent first)

Termination – the end or the beginning?

Whenever an agency terminates, this ordinarily sets in train a series of potential events about which agents needs to be very much aware. The following summary is not intended to cover off all relevant points, nor to constitute an exhaustive […]

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Missed sales target might not deprive a commercial agent of a termination payment

An agency agreement is of course a contract between the principal and the agent.  The approach of English law is that both parties to a contract are free to make whatever bargain they want.  Agency agreements often contain a clause […]

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To do … or not to do – these are the questions

To do … or not to do – the following are examples of some questions and answers all related to common agency law conundrums (and all of which, for clarity and comprehension, and in order to provide important information as […]

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Diamonds are not a Commercial Agent’s best friend

The Commercial Agents (Council Directive) Regulations 1993 provide important rights for commercial agents who sell or negotiate the sale or purchase of goods on behalf of others, including the right to receive compensation or an indemnity on termination of the […]

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What is the secret to a successful agency?

It’s the question that all principals and agents would love to know the answer to but, unfortunately, there isn’t a magic formula that can guarantee that an agency will be successful. However, there are some products that have achieved tremendous […]

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Q’s and A’s

Q My agency recently terminated and I am concerned to get paid my commission entitlement in respect to orders which I had lined up to take on behalf of my principal within a relatively short window after the time when […]

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Agents and distributors: the issues of confidential commercial information and personal data

The UK is one of the world’s most advanced digital economies and this is both strength and a weakness, according to a report on BBC News on 13 February 2017. Principals and suppliers and agents and distributors are exchanging confidential […]

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Clarification from the courts on valuing agencies

The case of Software Incubator Limited v Computer Associates UK Limited was big news in agency circles last year, providing longawaited confirmation that the definition of goods for the purpose of the Commercial Agents (Council Directive) Regulations 1993 includes software. […]

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A question of interpretation

When a couple get married there is a warm glow of optimism but sometimes the warm glow wears off and the couple end up in a bitter divorce. It is something similar with an agency relationship. In both cases those […]

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Breaking up is hard to do

How do you know if a breach of contract is serious enough to allow you to immediately terminate and end the relationship? It is a common misconception that any breach, even small breaches, can allow the innocent party to terminate […]

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Good housekeeping – Keeping pipelines very clear!

One of the potential benefits to agents following an agency termination situation, is the right to pursue against the principal a claim for commissions in the pipeline. In other words, the potential right to be entitled to commissions in respect […]

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The Commercial Agents Regulations mean I have access to justice, right?

Access to justice – an idealistic catchphrase well-used by politicians and lawyers which seeks to reassure those who have been wronged that there is redress available to them, but what does it really mean and does it actually exist? The […]

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Commercial agents and software – goods rather than services?

Since the introduction of the Regulations, there has been considerable uncertainty as to whether transactions involving computer software can be categorised as “sale of goods” for the purposes of the Regulations. The Commercial Agents (Council Directive) Regulations 1993 (“the Regulations”) […]

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The criminal law of bribery in commercial agency relationships

The Bribery Act 2010 reformed the criminal law of bribery in the United Kingdom. It abolished the bribery offences that had previously existed at common law and in statute, and extended the offence of bribery to cover all private sector […]

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Brexit – What does it mean for the Commercial Agents Regulations?

The Commercial Agents (Council Directive) Regulations 1993 (the “Regulations”) is one example of a multitude of EU-derived laws whose future is now being called into question following the UK’s decision to leave the European Union. Post-Brexit it is unclear which […]

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Brexit – How might sales agents or their principals be affected?

Most principals and agents have heard of the House of Lords decision in the Lonsdale case in 2007 which set out the principles to be followed when valuing a compensation claim under Regulation 17 of the Commercial Agents (Council Directive) […]

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How does a Court value a compensation claim?

Most principals and agents have heard of the House of Lords decision in the Lonsdale case in 2007 which set out the principles to be followed when valuing a compensation claim under Regulation 17 of the Commercial Agents (Council Directive) […]

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Who qualifies as a “new customer ” when calculating an indemnity payment?

Uk and uropean Courts have made clear on a number of occasions that one of the key aims behind the indemnity and compensation mechanisms in the  Commercial Agents (Council Directive) Regulations 1993 (“the Regulations”). and the European Directive from which the […]

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Brexit – the end for the Commercial Agents Regulations?

This article considers how a potential Brexit (a British-exit from the EU) might impact upon you through changes to the current regime of the Commercial Agents (Council Directive) Regulations 1993 (the Regulations). As at the date of writing this article, […]

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James Bond in reverse – an agent for a foreign company

Globalisation has been a feature of business over the last 30 years and many agents have been appointed in the UK by principals who are based abroad. Often the agent and principal have met at a trade show and the […]

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When might compensation be better for a principal than indemnity?

Under the Commercial Agents Regulations, an agent will generally be entitled to compensation or an indemnity payment on the termination of their agency contract. Unless the agency contract specifies an indemnity payment, the default position is that compensation will be […]

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Post-termination payments for agents, indemnity, compensation and the worst of all worlds

Commercial Agents can benefit from substantial payments when their agency contracts come to an end. In England and Wales, principals and agents can choose when they enter into the agency contract whether an indemnity or compensation will be payable on […]

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Can an agent bring a discrimination claim against his principal?

In the 19th Century the relationship which we now call “employer and employee” was referred to as “master and servant”. The law did not interfere much with the relationship – the philosophy was freedom of contract. Today the law interferes […]

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What does it all mean? Interpreting the agency contract

At the heart of every agency arrangement is a contract. Whether it be a written document containing detailed provisions of the parties’ rights and obligations, or a simple oral agreement reached over a handshake; at some point the parties will […]

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Exclusivity, sole, and nonexclusivity – what it can mean for you

A key issue in the appointment of an agent is the extent of the appointment. This is usually expressed in terms of the appointment being on an exclusive, sole, or non-exclusive basis. However, often these terms are used without careful […]

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When is an agent entitled to commission?

It is common, particularly following termination of an agency agreement, for agents and principals to become involved in disputes over the commission which the agent is entitled to be paid. When is an agent entitled to commission? Where any such […]

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Q & A’s on Agency Law

Q: I contacted you a few years ago with regards to my planned retirement at some stage in the future, and we discussed at what age, all other relevant factors being considered, I might realistically be able to retire and, […]

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Much Obliged To You!

Although it is obvious to state it, one of the most important facets of the relationship between a principal and an agent is as to what are their respective obligations to each other. There are effectively two levels to this, […]

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Am I a Commercial Agent?

by Emma Butcher of Clarkslegal LLP Agency arrangements often arise informally, and we are sometimes consulted by agents and principals who are not sure whether they fall within the Commercial Agents (Council Directive) Regulations 1993 (the Regulations) or not. The […]

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Pipeline Commission or Pipe Dream?

by Paul Samuel Director, Ashby Cohen Solicitors Most commercial agents who sell goods know that if their agency is terminated, then under the Commercial Agents (Council Directive) Regulations 1993 they can claim compensation/an indemnity unless the agent’s behaviour has been […]

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What is the value of an agent’s compensation on termination?

Ref: Warren (t/a On-Line Cartons and Print) v Drukkerij Flach BV By Nicola Rochon Of Blake Morgan LLP When an agent’s relationship with his principal ends, the agent is entitled to be compensated for damages caused by this termination. Lonsdale (t/a […]

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Q & A’s on Agency Law

by David Bentley of Bentley and Co. Solicitors Q. An agency which we had was terminated on 18 September 2013, and whereas we were entitled to three months’ notice (as acknowledged by our principal), we were in fact asked to […]

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Amending the Territory Principals be alert, Agents be aware!

by Paul Samuel Director, Ashby Cohen Solicitors Although the relationship between a commercial agent and his principal should be one of collaboration, after a while a tension often creeps in when the principal feels that the agent has become lazy […]

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How does a commercial agent acquire a customer for a principal?

by Kevin Manship of Blake Morgan LLP Under Regulation 7(1) of the Commercial Agents (Council Directive) Regulations 1993 (“the Regulations”), a commercial agent is entitled to receive commission on commercial transactions concluded during the period covered by the agency contract […]

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Q & A’s on Agency Law

by David Bentley of Bentley and Co. Solicitors Q. I have been representing a particular principal for approximately ten years, and have recently been presented with a draft agency agreement which contains provisions that I find unacceptable (such as a post termination […]

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Goods & Services What’s the difference? An update..

by Andrew Leach of DWF LLP The Commercial Agents Regulations apply only to agents selling “goods” and not services – so what is the difference? This question is important as an agent deemed to be selling a principal’s services will […]

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Q & A’s on Agency Law

by David Bentley of Bentley and Co. Solicitors Q. My principal is not paying my company’s commission entitlement in a timely manner, and I would like to know what rights we may have as a consequence of this? A. Settlement on time by […]

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Turn to Face The Change

by Stephen Sidkin of Fox Williams LLP Competition never ceases. A business can succeed or fail by its willingness or not to accept change, to adapt, or to move forward. But what of a situation where a principal needs an […]

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Retirement Planning for Commercial Agents

by Andrew Leach of DWF LLP Commercial Agents can benefit from substantial payment when their agency contracts come to an end – and usually this entitlement remains when an agent retires. As a result, if an agent properly plans his […]

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Guidance on how to calculate compensation

by Christopher Tayton of Clarkslegal LLP For many years after the Commercial Agents Regulations came into force in 1994, there was uncertainty over how a commercial agent should calculate the value of the “compensation” they were owed under Regulation 17 […]

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What if my principal is in breach of our agreement?

by Emma Butcher of Clarkslegal LLP Most agents are aware that if their agency agreement is terminated by the principal they are entitled under the Commercial Agents (Council Directive) Regulations 1993 to payment of either compensation or an indemnity, depending […]

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Q & A’s on Agency Law

by David Bentley of Bentley and Co. Solicitors Q. I have read in previous columns that there are very particular rules about how to notify a principal that you intend pursuing a claim for compensation, following a termination – are these […]

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Q & As on Agency Law

by David Bentley of Bentley and Co. Solicitors Q. One of my main principals has said to me that it considers that I am operating another agency in competition with the agency which I have with them, and that I therefore […]

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To What Extent are Termination Payments Taxable?

by Adam Maher Partner, Myerson LLP So, the great news is you’ve successfully settled your commercial agency claim (or, for the unlucky few, you have withstood the pressure of a court trial and been awarded damages by a court). The […]

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Sub-Agents Left Out in the Cold

by Paul Samuel Director, Ashby Cohen Solicitors An agent who is a commercial agent within the meaning of The Agents (Council Directive) Regulations 1993 (“the Regulations”) has an independence which an employee does not have. Unless his agency contract expressly […]

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What does your agency agreement say about compensation?

by Emma Butcher of Clarkslegal LLP Under the Commercial Agents (Council Directive) Regulations 1993 (the “Regulations”), an agent is usually entitled to a payment when his agency agreement is terminated by the principal (unless the agreement is being terminated as […]

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Law applicable to agency agreements reconsidered

by Emma Butcher of Clarkslegal LLP A recent decision of the European Court of Justice (United Antwerp Maritime Agencies (Unamar) NV v Navigation Maritime Bulgare) has cast doubt on the law which will be applicable to commercial agency agreements where […]

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Commercial agent’s right to commission on incomplete orders

Did You Know? Circumstances exist in which a commercial agent remains entitled to commission – even though the sale between the principal and the customer has not been completed. The vast majority of commercial agents and principals will be well […]

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Q & A’s on Agency Law

by David Bentley of Bentley and Co. Solicitors Q. I am currently working a two months notice period, and have a number of deals in the pipeline for this particular principal, which deals will only come to fruition after my agency agreement […]

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When will an agent’s breach of contract mean loss of post-termination compensation?

As you will be aware, when a Commercial Agency agreement is terminated there is generally an entitlement to a payment under regulation 17 of the Commercial Agents (Council Directive) Regulations 1993 (“the Regulations”). This can often be a very substantial […]

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Q & A’s on Agency Law

Q. Are principals required to provide notice in writing, when terminating an agency? – I have recently had an agency terminated only verbally, with an assurance that that decision would also be communicated to me, in writing. Three weeks on, however, […]

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When is an Agent a Commercial Agent?

When is an agent a commercial agent? This is a question principals often ask themselves when agents bring claims for post-termination payments under the Commercial Agents (Council Directive) Regulations 1993 (“the Regulations”). As is commonly known, under the Regulations, commercial […]

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An age-old question?

by Paul Samuel Director, Ashby Cohen Solicitors The Press regularly feature articles on baby boomers and the implications for society of an ageing population. Some of these baby boomers will be long standing agents and some of these might want […]

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The Importance of having a choice of law clause in agency contracts

by Emma Butcher of Clarkslegal LLP A recent Court of Appeal decision has highlighted the importance of parties to an agency contract choosing which countries’ law will govern the contract. Timothy Lawler v Sandvik Mining and Construction Mobile Crushers and […]

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Commercial Agency Law Frequently Asked Questions

by Thom Vaughan of EAD Solicitors LLP Q. Retirement – I will turn 65 years old in March. I’m in a position where I want to finish with my agency. If I do so, will I still be entitled to payment of […]

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Where should a principal be sued?

By Adam Maher Partner, Neil Myerson LLP In a world of increasing globalised trade, it is often the case that a commercial agent operates in a number of different European Union countries. This can give rise to difficult questions concerning […]

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Watch what you say about your principal!

Regular readers will recall that we featured this story back in july 2010. it was submitted by Thom Vaughan of EAD solicitors. Thom’s article was about the original (High Court) decision, however, a Court of Appeal decision was made in […]

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Can an agent act for competing principals?

By Thom Vaughan – Solicitor EAD Solicitors LLP thom.vaughan@eadsolicitors.co.uk Disclaimer: This column does not contain legal advice and is for general guidance only. Agentbase, E.A.D. Solicitors, Prime Forensic Accountants and the writes accept no liability in connection with the general […]

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Q & A’s on Agency Law

by David Bentley of Bentley and Co. Solicitors Q. I have read your previous comments with regards to sales targets, and am concerned that you do not appreciate that many pr incipals ef fect ively demand the achievement of stipulated sales goals. […]

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Why being an overly aggressive litigator may cost you your dream home!

By Thom Vaughan – Solicitor EAD Solicitors LLP Every party approaches litigation differently. There are those who are measured and careful, others who are devilishly strategic and set traps, and then there is the class of bellowing, red – faced […]

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Goods & Services What’s the difference? The Definitive Answer?

by Paul Brown of AgentBase I asked a very simple question of a variety of specialist agency law solicitors. But no-one can answer it comprehensively. Here is a compilation of their answers: Ben Griffin – Solicitor www.cobbetts.com I set out […]

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Question: How much for your agency? Answer: It depends!

by Thom Vaughan of E.A.D. Solicitors L.L.P. and Adrian Pym or Prime Forensic Accountants In the oft quoted case of Lonsdale -v- Howard & Hallam Ltd [2007], Lord Hoffman optimistically suggested that “once it is firmly understood that the compensation […]

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Q & A’s on Agency Law

by David Bentley of Bentley and Co. Solicitors Q. I contacted you a few years ago with regards to my planned retirement at some stage in the future, and we discussed at what age, all other relevant factors being considered, I […]

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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 […]

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The End of the Affair

by Alain Cohen Director, Ashby Cohen Solicitors, London When a relationship comes to an end the effects can be traumatic for both sides – but it needn’t be. In the field of commercial agency there are certain times when both […]

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Defining a Commercial Agent

by Andrew Leach of Cobbetts L.L.P. Commercial agents benefit from significant protection under the Commercial Agency Regulations 1993 (the “Regulations”), such as the right to claim substantial lump sum payments on the termination of an agency agreement in certain circumstances. […]

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Can an agent act for competing principals?

by Andrew Leach of Cobbetts L.L.P. In the case of Rossetti Marketing Ltd v Diamond Sofa Company Ltd and another [2011] EWHC 2482, the High Court implied a term into an agency contract allowing the agent to act for multiple […]

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Goods or Services under the Regulations?

by Paul Samuel Director, Ashby Cohen Solicitors, London The 1993 Regulations apply to agencies which involve the sale of goods. They do not apply to an agency which consists of the supply of services. If the agency is not concerned […]

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Transferring Agency Agreements

by Andrew Leach of Cobbetts L.L.P. The English High Court has recently ruled that an assignment is insufficient to transfer an agency agreement to a limited company set up for tax reasons. This can have serious consequences if the principal […]

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Conflict of interest

by Thom Vaughan of E.A.D. Solicitors L.L.P. An Agent must not allow a conflict of interest to arise between his agency and competing interests or there may be expensive consequences. The recent Scottish Court of Session decision in Samsung Semiconductor […]

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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 […]

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Q & A’s on Agency Law

by David Bentley of Bentley and Co. Solicitors Q. My main principal currently owes me approaching £4,000 in terms of unpaid commissions, which amount it is disputing paying to me owing to the potential for a part refund from the customer […]

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Q & A’s on Agency Law

by David Bentley of Bentley and Co. Solicitors Q. I have recently been offered an agency by a competitor to one of my main principals, and would like to know as to whether, if I resigned my agency with the current […]

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Q & A’s on Agency Law

by David Bentley of Bentley and Co. Solicitors Q. As a self-employed sales agent, is there any restriction on the number of agencies which I can hold, at any one time? A. Subject to anything which you might otherwise have agreed with […]

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Is it a good idea for an agent to have a written agreement?

by David Bentley of Bentley and Co. Solicitors As it is difficult to envisage any s i t u a t i o n w h e r e a g e n u i n e agreement reached between […]

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Q’s and A’s on agency law

by David Bentley of Bentley and Co. Solicitors Q. I am informed by my principal that it is experiencing cash flow difficulties, and that that is the reason why I have not been paid my outstanding commission entitlement (which is already […]

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European Court of Justice Rules on Denial of Indemnity to a Commercial Agent

by Alain Cohen Director, Ashby Cohen Solicitors, London The European Court of Justice (ECJ) has made a ruling which clarifies the circumstances surrounding when a principal can deny an agent indemnity or compensation on the termination of an agency agreement. […]

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Commercial Agency Compensation & Termination Risk

by Thom Vaughan of E.A.D. Solicitors L.L.P. and Adrian Pym of RSM Tenon Last year the case of McQuillan –v- McCormick was the talk of the town in agency circles. This was, of course, the case of the agents who […]

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LEGAL UPDATE: CASE REPORT

Volvo Car Germany GmbH v Autohof Weidensdorf GmbH Case C-203/09. by Thom Vaughan of E.A.D. Solicitors L.L.P. The European Court of Justice has found that Agents are entitled to compensation or an indemnity even if they commit a serious contractual […]

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Breach of Contract in Commercial Agency Law

Contract disputes are an unfortunate fact of life in many areas of business, and commercial agency law is no exception. While negotiation can help to resolve most disputes and disagreements, when a breach of contract is sufficiently serious, the innocent […]

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Commercial Agency Law: Gledhill v Bentley Designs

The recent case of Gledhill v Bentley Designs has highlighted an important issue in commercial agency law. Mr Gledhill had been a commercial agent for Bentley Designs for 17 years, during which time he was their best agent, earning on […]

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Commercial Agents Regulations Cannot Be Avoided By Choosing Non-EU Law and Arbitration

The case of Accentuate v Asigra has demonstrated an important point concerning the Commercial Agents (Council Directive) Regulations 1993. In the case, the High Court determined that it had authority to hear a claim for compensation under the regulations even […]

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Commercial Agency Valuation – don’t ignore the positive factors

by Thom Vaughan of E.A.D. Solicitors L.L.P. and Adrian Pym of RSM Tenon The valuation of an agency relies on more than the commission figures or the accounts of the agent. In our previous article we discussed the costs of […]

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Retirement and the Commercial Agents Regulations

by Alain Cohen Director, Ashby Cohen Solicitors, London Under the Commercial Agents Regulations, an agent is entitled to a termination payment when their agency is terminated by the principal. In most cases, if the agent terminates the agreement himself, they […]

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Agency compensation: do £20k agencies have any value?

by Thom Vaughan of E.A.D. Solicitors L.L.P. and Adrian Pym of RSM Tenon In the 2007 case of Lonsdale the House of Lords confirmed that in calculating the compensation payable to a commercial agent on termination or expiry of its […]

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Why agents should think twice before telling their principal exactly what they think of him!

by Thom Vaughan E.A.D. Solicitors L.L.P. In the recent High Court case of Stephen Gledhill –v- Bentley Designs (UK) Ltd (2 June 2010) the Court was asked to decide whether an apology proffered by the agent (Mr Gledhill) to the […]

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Commercial Agents Update 2010 (Part 3)

by Christopher Tayton Clarkslegal LLP What happens if your agency agreement is subject to the law of a country outside the EU? Often you will see Agency Agreements providing that the law of a country outside the EU, such as […]

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Commercial Agents Update 2010 (Part 2)

by Christopher Tayton Clarkslegal LLP When can a Principal avoid paying compensation following termination of a commercial agency agreement? Regulation 18(a) states that a Principal is not required to pay compensation where he has terminated the agency agreement “because of […]

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Commercial Agents Update 2010 (Part 1)

by Christopher Tayton Clarkslegal LLP T h e C o m m e r c i a l A g e n t s Regulations have been in force for over 15 years yet the Courts are still being asked […]

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Date of Termination of a Commercial Agency Agreement

by Alain Cohen Director, Ashby Cohen Solicitors, London The recent case of Claramoda v Zoomphase has highlighted the importance of having a clear contract when entering into a commercial agency agreement. Zoomphase – a clothing supplier – for conducting sales […]

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Commercial Agency Agreements and Restrictive Covenants…

by Alain Cohen Director, Ashby Cohen Solicitors, London The case of BCM Group PLC v Visualmark Ltd & Anor highlighted some important points regarding commercial agents and restrictive covenants. In the case, the agent, a seller of office equipment, disputed […]

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Agents Trading under Their Own Name Not Subject to Regulations…

by Alain Cohen Director, Ashby Cohen Solicitors, London A recent decision in the Court of Appeal emphasised that to come within the definition of a “commercial agent” within the Commercial Agents (Council Directive) Regulations the agent has to act on […]

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What are my Duties as an Agent?

by Thom Vaughan E.A.D. Solicitors L.L.P. C o m m e r c i a l a g e n t s , q u i t e understandably, often tend to focus on the question, “what’s in it for […]

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Agent Q & A’s

with Christopher Tayton Clarkslegal LLP Q. I am an Agent and am worried that I am not receiving the correct level of c o m m i s s i o n f r o m m y Principal. How can […]

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Termination: When will I be entitled to Compensation or an Indemnity?

by Christopher Tayton Clarkslegal LLP Commercial agents and their principals will be familiar with the general rule under the Commercial Agents Regulations 1993 that a commercial agent is entitled to receive compensation or, if provided for in their agency agreement, […]

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Regulation 17 Compensation – a Practical Overview and How You Can Negotiate the Correct Amount

by Thom Vaughan E.A.D. Solicitors L.L.P. When Mr Graham Lonsdale took exception to the Oxford County Court’s decision to award him a mere £5,000 for the loss of his agency business his further legal action triggered a radical overhaul of […]

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Potential Impact of Brand Names on Indemnity Payments to Commercial Agents

by Alain Cohen Director, Ashby Cohen Solicitors, London On the termination of a commercial agency agreement, one of the principal entitlements of the agent is indemnity. The value of this indemnity should be commensurate with the value of the agreement […]

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Repeated Minor Breaches of Contract can Constitute Repudiatory Breach

by Alain Cohen, Partner, Ashby Cohen Solicitors, London Since the Commercial Agents Regulations were instituted in 1994, the courts have shown a marked tendency to favour the agent in any dispute, as agents are generally seen as the more vulnerable […]

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SHOULD AGENTS HAVE WRITTEN CONTRACTS?

by Larry Coltman, Partner, Hill Hofstetter LLP, Birmingham This is a question which is often asked by Principals and Agents. Some countries insist on written contracts whereas others, like the UK, do not require Agents to have written contracts to […]

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A Change in the law regarding compensation

If there is a compensation clause Following the case of Lonsdale vs Howard & Hallam in the House of Lords it was established that the amount of compensation will be equal to that which he would have received if he was selling […]

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