An agent acts on behalf of their client (or principal) to either market the principal’s goods or services (a marketing agent) or to arrange for the sale of the principal’s goods or services (a sales agent). Whether you are the agent or principal you should consider ensuring that what you have agreed is set out in writing.
Any agency agreement should establish:
- the precise scope of the agent's authority. Is the agent to be a sales agent or a marketing agent? Is it permitted only to negotiate prospective transactions or can it actually conclude the contract of sale on behalf of the principal? Does the agent have the authority to bind the principal? Can it agree discounts or special deals with the customer?
- the extent of the agent's territory or customer group - this should be defined precisely. If the arrangement is international in scope, state expressly whether territory includes jurisdictions whose constitutional status might otherwise have to be checked, for example, does the United Kingdom include the Channel Islands or the Isle of Man, and does France include the French overseas territories? This could also be important for delivery obligations in the supply terms.
- whether the agent has exclusive, non-exclusive or sole rights in the defined territory? The meaning of whatever term is used needs spelling out expressly in the agreement. Does the principal wish to reserve certain rights to itself, such as the right to supply certain customers in that territory?
- the term or duration of the appointment (including notice periods and any provision for renewal).
- the products or product range that are to be covered by the agreement. What about future products, for example, developments of the existing products using the same technology, or different products which perform the same function as existing products but using different technology, or completely different products but marketed under the same brand name?
When drafting an agency agreement we shall advise you on any exposure to your business and shall ensure that those risks are limited. We can assist you by drafting contracts in plain English which protect you and your business and ensure that the terms which you have agreed with the other party are clearly and correctly set out.
To discuss how we can assist your business with your commercial transactions do give us a call on 020 7611 4848 or email us at firstname.lastname@example.org.