Whether you are a commercial agent or a principal, understanding your rights and responsibilities under the Commercial Agents (Council Directive) Regulations 1993 (the Regulations) is essential.
These rules not only govern day-to-day conduct within the agency relationship but also have significant implications if that relationship ends, including potential compensation claims and contractual liabilities.
Our Dispute Resolution Solicitors break down the key roles and obligations of both agents and principals.
How Do the Commercial Agents Regulations Affect You?
The Regulations are important to both principals and agents in confirming their respective rights and obligations and in providing what should happen if the commercial agency relationship is terminated or otherwise ends.
If you are an agent, you may have the right to bring a claim for compensation under the Regulations should the principal terminate your commercial agency.
If you are a principal, you may be able to rely on certain provisions of the Regulations to defend or reduce claims brought by an outgoing commercial agent.
What are the obligations of a Commercial Agent?
An agent is subject to the obligations set out in the Regulations. If there is a written agency agreement in place, the agent may also be subject to other contractual obligations set out in the agency agreement.
Under the Regulations, a commercial agent must look after the interests of his or her principal and act both dutifully and in good faith.
Specifically, the commercial agent must make proper efforts to negotiate and conclude transactions, must communicate all necessary information they have to their principal, and must comply with any reasonable instruction given by their principal.
An agent must comply with the terms of any written agency agreement or any terms which have been agreed orally.
What are the obligations of a Principal?
A principal is subject to the obligations set out in the Regulations.
If there is a written agency agreement in place, the principal may also be subject to other contractual obligations set out in the agreement.
Under the Regulations, a principal must act both dutifully and in good faith.
This includes providing the commercial agent with the necessary documentation concerning any goods, obtaining whatever information is necessary for the agent to perform the agency, informing the agent if a significantly lower than usual volume of transactions is expected, and informing the agent of the principal’s acceptance or rejection of any transaction procured by the agent.
A principal must provide the agent with a statement of commission due to the agent and must pay the agent “reasonable remuneration” in the absence of any agreement in relation to a specific level of remuneration.
In addition, the agent must comply with the terms of the agency agreement in place with the principal, whether those terms are recorded in a written agreement or agreed verbally.
Can You Contract Out of the Regulations?
It's not possible to entirely contract out or exclude the Commercial Agents Regulations.
However, you can limit specific regulations through your agency agreement. Any limitations should be handled carefully and with expert legal advice to ensure compliance and avoid potential disputes.
Contact Our Dispute Resolution Solicitors
For expert guidance or to discuss any commercial agency concerns, contact Myerson Solicitors' specialist Dispute Resolution Team today.
0161 941 4000
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Robert Brothers
Senior Associate
Rob has 7 years of experience acting as a Dispute Resolution solicitor. Rob has specialist expertise in professional negligence disputes, shareholder and partnership disputes, complex contractual disputes, intellectual property, reputation management and commercial agency claims.
About Robert Brothers