BE AWARE OF THE COMMERCIAL AGENCY REGULATIONS

A Hand Morgan & Owen Factsheet

Whether you are a principal or agent in the commercial field you need to be aware of the Commercial Agency Regulations.

These were brought in to enact European legislation aimed at regulating relations between those acting as agents on commission for selling of goods on behalf of suppliers and manufacturers. 

Not all commercial agency agreements fall within the legislation – but exceptions are limited and the regulations have been interpreted so as to provide protection for agents. 

So be aware that:

• It is not necessary for there to be a formal written agreement for the Commercial Agency Regulations to apply.
• The regulations set out minimum periods of notice for the termination of the agreement.
• Unless otherwise agreed, notice has to expire at the end of a calendar month.
• Upon termination by a principal, an agent has the right to claim compensation to the extent that it has nurtured and increased the good will of the principal by maintaining and increasing the principal’s customer base.

Pure distribution and marketing agreements do not fall within the regulations, but careful drafting can be required if the parties to an agreement do not wish the regulations to bite. 

For further information contact Nigel Pepper or Patrick Farrington, on 01785 211 411.

10 October 2008

The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published.

Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances