Commercial Agency Disputes occur when an agent (a person/business providing a service)and the principal (the person/business employing the agency) have a disagreement.
Our team has extensive experience in advising both commercial agents and their principals in respect of their contractual rights and obligations under the Commercial Agents (Council Directive) Regulations 1993.
What are the Commercial Agents regulations 1993?
The Commercial Agents (Council Directive) Regulations 1993 came into force January 1st, 1994 and they cover the rights and obligations of both agents and principals. They govern the relationship between the two, and provide certain protections to commercial agents.
It is the UK’s implementation of a European Law directive, entitled Commercial Agents Directive (86/653/EEC), which affects all EU member states.
These regulations apply to all commercial agents in the UK, where English law applies.
The regulations were introduced to ensure commercial agents are protected and properly compensated for any work they do under their agreement with their principal.
Under the regulations, commercial agents are entitled to statutory compensation on termination of their agency agreement. They are also afforded certain contractual rights under their agreement.
There are many different types of agency and not every agent is a commercial agent as defined under these regulations. However, when an agent is a ‘commercial agent’ the 1993 Regulations provide a legislative framework which governs some of the core components of the agency relationship, including the respective duties of the parties, remuneration of the agent and notice periods for termination of the agency.
What are the obligations of a commercial agent?
A commercial agent must have the best interests of their principal in mind, and act both dutifully and in good faith. They must communicate all necessary info they have in regards to their principal’s business, and comply with any reasonable instruction given.
They must also comply with the initial terms of the agency given, whether it be through a written contract or a verbal contract.
What are the obligations of a principal?
Similar to a commercial agent, a principal must act both dutifully and in good faith in his relations with his commercial agent.
They must provide any relevant documentation concerning goods or services and obtain whatever information is necessary for the commercial agent to carry out their agreement.
The principal is also expected to pay a commercial agent a “reasonable renumeration”, where an agreement in relation to specific renumeration is not agreed.
They must also comply with the initial terms of the agency given, whether it be through a written contract or a verbal contract.
What sort of cases arise from a Commercial Agency Dispute?
A commercial agency dispute can happen in a number of ways. We often see issues relating to, but not limited to, the following areas:
- A breach of agreement
- Misrepresentation
- Misuse of intellectual property
- termination of an agreement
- Unpaid commission
- Non-disclosure of true sales figures
- Breaching an exclusivity clause
Our team will work closely with you and your business to determine whether your legal query falls under this bracket and, if so, whether you have a viable case against your commercial agent or principal.
How can Smooth Commercial Law help you?
We advise both principals and agents in respect of all aspects of the 1993 Regulations, both before and after termination of the agency relationship. We can provide strategic input to commercial clients who wish to terminate their relationships with agents. It is critical for principals who are planning to terminate to obtain early advice in order to understand and minimise their potential exposure.
Our team have extensive experience in:
- Determining both the agent’s and principal’s position in relation to the regulations
- Checking a principal’s liability to pay out compensation
- Drawing up notices to legally terminate an agency relationship
- Drafting thorough agency agreements at the start of the relationship
What our clients say
An absolutely fantastic service.
From the first contact right through to settlement and payment, everything was very clearly explained to me. I was regularly updated and any questions I had were answered quickly.
I received a 5 figure amount for very little effort as everything was done by these people.
Thanks in particular to Tom McVey and David Smith for their excellent service.
Get in touch
Matters relating to commercial agent disputes can be extensive and complex, and potentially very expensive for a company. However, if you seek legal advice before entering into a contract or agreement, you may be able to better prepare for the future.
Our Commercial Agency solicitors are more than happy to help you with your legal query, whatever it may be.
If you would like to speak to one of our expert team members about commercial agency dispute, you can do by calling the number at the top of this page, or by completing an enquiry form.