Supply chain · 5 June 2018

Commercial Agents Regulations: What happens when an agent terminates the agreement?

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Following his recent article drawing the distinction between agents and distributors, David Walker, founder of Grid Law, responds to a reader’s question regarding the termination of agreement by an agent.

Question

I’m writing in response to your article on appointing agents and distributors.

Are we right in understanding that the Commercial Agents Regulations mean that if an agreement is terminated by the agent themselves, then they are not entitled to anything?

What is the arrangement when the contract just comes to an end both parties agree that the contract will not be rolling, and will have an expiration date?

This is at an apt time we are in the midst of finalising an agency agreement with someone who is reluctant to get their own advice.

Answer

Thanks for your question.

First, we need to establish that the Commercial Agents Regulations apply to this agency agreement.

The agent will be a commercial agent if they are:

  • a “self-employed intermediary” who has
  • “continuing authority”
  • to “negotiate”
  • the sale or 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 key points from this is that they must be selling products on your behalf, not services. They must also have continuing authority which means that this must not be a one-off arrangement.


 
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ABOUT THE EXPERT

David Walker is the founder of Grid Law, a firm which first targeted the motorsport industry, advising on sponsorship deals, new contracts and building of personal brands. He has now expanded his remit to include entrepreneurs, aiding with contract law, dispute resolution and protecting and defending intellectual property rights.

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