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Commercial agency – know your rights and protect your position

We find ourselves faced with a number of new and unexpected challenges as a result of Covid-19. However, it is important to remember that established legal principles still remain in play and that contractual disputes and issues have not simply disappeared.

In response to comments made from some of our clients, this article is one in a series of articles to highlight specific areas of law and their application to ongoing contracts and business relationships.

The terms of the Commercial Agents (Council Directive) Regulations 1993 (SI 1993/3053) (as amended) (‘the Regulations’) implement Council Directive 86/653 [1986] OJ L382/17 (‘the Directive’). The Regulations came into force on 1 January 1994 and contain important provisions affecting the relations between commercial agents and their principals.

At Gregg Latchams we have specialist expertise in the law relating to commercial agents and extensive experience of handling claims under the Regulations both on behalf of commercial agents and their principals.

In broad terms, a ‘commercial agent’ comprises a self-employed intermediary who negotiates or concludes sales or purchases of “goods” on behalf of his principal.

The Regulations provide an entitlement to an ‘indemnity’ or ‘compensation’ on termination effected by the principal and set out certain duties owed between commercial agents and their principals. They also contain provisions relating to the basis of remuneration of commercial agents, the termination of commercial agencies and the validity of restraint of trade clauses.

In other respects, relations between commercial agents and their principals are governed by the common law, equity and, to a more limited extent, other legislation applicable to agents and their principals.

It is worth checking as to whether the agreement you are operating under is a commercial agency as there are rights that protect your position and, if the agreement has been terminated, give rise to financial entitlements.

Expert legal advice

When advising in this area we often work with specialist barristers such as Andrew Marsden of Commercial Chambers, Bristol. Andrew has published a useful guide to the law and practice in this area and you can access or download a copy here.

Issues you might currently face are unlikely to go away and time is of the essence.  An early discussion with legal advisers may provide you with assurances or help in identifying a solution. We are always happy to discuss your situation and concerns you might have. To speak to a specialist solicitor please call Richard Gore on 0117 924 9624 at any time.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.

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