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Agency Agreement

Agency Agreement

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An Agency Agreement, also referred to as a sales agent agreement or commission agreement, is a vital document that outlines the relationship between an agent and a principal in selling the principal's products, goods, or services in exchange for commission payments. This agreement establishes the terms and conditions governing the agent's role and responsibilities, ensuring clarity and a mutually beneficial partnership.

One key aspect of the agency agreement is the defined territory granted to the agent for the duration of the contract. The territory can range from a city, county, country or even encompass the entire globe. It is at the principal's discretion to determine the territory granted, with the possibility of expanding it based on the agent's proven ability to promote and sell the products or services effectively.

Another consideration in the agency contract is whether it should be exclusive (sole agent) or non-exclusive for the specified territory. This decision is driven by commercial factors and depends on the principal's product or service. While having multiple agents can be advantageous for low-margin products requiring high sales volumes, an exclusive agreement can incentivize the agent to promote and sell the products more effectively.

Our sales agency template offers flexibility in commission structure, catering to the principal's preferences. Furthermore, it provides a clear and detailed breakdown of the responsibilities and obligations of both the agent and the principal, ensuring transparency and accountability throughout the partnership.

This agreement incorporates the Commercial Agents (Council Directive) Regulations 1993. These regulations still apply to the UK as they were incorporated into UK law before the UK left the EU. This means this agreement can be used in the UK, the EU and worldwide. These regulations are designed to protect the agent's interests but also to provide legal certainty and reduce the risk of legal disputes.

Key protections offered by the regulations include:

1. The agent has the right to request a written agency agreement from the principal. (This is a good reason to buy this agreement.)

2. The agent is entitled to a reasonable commission rate, where none is expressly stated. Our agency agreement includes detailed references to commission rates, and the principal should clearly state commission rate(s) in the contract. Both parties need to have certainty in this area.

3. The agent is entitled to an indemnity if the principal ends the agreement but continues to benefit. The indemnity is usually capped at one year's commission received by the agent, averaged over the previous five years or less of the agreement.

4. However, the indemnity does not prevent the agent from seeking further damages for costs incurred in carrying out their duties under the agreement.

5. Compensation can be claimed if the principal terminates the agreement on the agent's death.

6. Finally, the agent needs to inform the principal they are seeking damages or an indemnity within 12 months of the termination of the agreement.

Additionally, our agency agreement includes provisions for compliance with the Bribery Act 2010, ensuring ethical business practices throughout the partnership.

Key clauses covered in this agency agreement include:

  • Interpretation
  • Terms of Agency
  • Commission
  • Duties and Responsibilities of the Agent
  • Duties and Responsibilities of the Principal
  • Anti-Bribery Compliance
  • Intellectual Property
  • Data Protection
  • Termination
  • Compensation & Indemnity
  • Force Majeure
  • Notices
  • General
  • Jurisdiction
  • Schedule (Products, Territory, Commission, Targets and Intellectual Property)

Customer Comments
"Appreciate being able to download and keep using document, much better value than a monthly subscription." - P Evans

"Had to get an agency agreement because the overseas company I was dealing with did not have any terms to give me. These did the trick. Great to be able to download it immediately." - SG Thompson

"Thank you, used agreement for all my agents saved a lot of time and money and now all on the same terms" - J Walters

Business Legal Documents CompactLaw Business Pack contains this agency agreement and other related business documents.

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