If you are a sales agent or if you are a company which is considering using a sales agent to sell company products then we can provide legal advice to protect you through each stage of the commercial relationship and avoid any dispute.
This area of law is governed by the Commercial Agents (Council Directive) Regulations 1993.
The Regulations will add terms to your agency agreement which you may not be aware of. One such term is that when the commercial relationship ends the agent is entitled to a payment to compensate it for the loss of future commission it would have earned. These payments can be substantial and can run into six figure sums. We can advise on certain exceptions to this entitlement.
Companies and agents alike should take advice to ensure that their contract best protects their interests against the Regulations. We ensure our clients start with the right contract which will get you the best result when the relationship ends.
At the beginning of the agent / company relationship, we can:
- Advise on which sales structure is best for your business, whether it is using a sales agent, distributor or hiring sales employees;
- Draft the contract to ensure that you get terms which are most favorable for your business;
- Advise on which country’s law will apply to your contract – the effect of the Regulations mean that this may not be the UK
If you have already entered into a sales agency contract, we advise on common issues including:
- Whether the Regulations apply to your contract and what this means for you;
- What each party’s responsibilities are under the contract and what your options are if one party is not performing their side of the contract;
- Whether you can end the contract and our analysis of the risks of doing so;
- The notice period required when ending the contract – the effect of the Regulations is that this may be different to what the contract states;
- Whether the company must make a compensation payment to the agent when the commercial relationship ends and guidance on the likely amount of the payment;
- What the position is where one party is based outside of the UK;
- What happens if the agent dies (i.e. is commission still payable to its estate?)
We are here to advise you on how to avoid disputes but if the worst happens our lawyers are experts in resolving disputes. We regularly negotiate settlements cost-effectively though mediation. If required, we can also pursue or defend a formal dispute through the courts.
Please contact Nicola McQuillan if you want to discuss any commercial agency issue.