Understanding Commercial Agency Law in Cross-Border Principal and Agent Relationships

Understanding the difference between jurisdiction and choice of law is essential in cross-border agency contracts. 

What is Jurisdiction? 

Jurisdiction refers to which country’s courts will hear any disputes under the agreement. 

If both parties are based in Great Britain, the English courts will usually have jurisdiction. 

If one party is based overseas, the position is more complex. 

Written agency agreements often include a jurisdiction clause specifying where disputes must be litigated. 

If there is no clear jurisdiction clause, or the parties are based in different countries, determining which court has jurisdiction can be highly complicated. 

What is a choice of law clause? 

If you have a written agency agreement, you may have a choice of law clause which specifies which country’s law should apply to any claim or dispute arising out of the agreement.  For example, your written agency agreement may specify that English law should apply to any dispute. 

Therefore, if a written agency agreement has a French jurisdiction clause and an English choice of law clause, any claim must be brought in the French Courts, but the French Courts would have to apply English law. 

Do I have to sue my Principal in a foreign country? 

It is possible that you may have to sue your principal in a country other than that in which you reside. If you have a written agency agreement, it is possible that this agreement may specify in which country any claim must be brought; however, other laws may apply which determine which country should decide the dispute and which country’s law should apply. This is a very complex area, and if this applies to your circumstances, we would strongly recommend that you get in touch with us so that we may advise. 

What if my principal is based abroad – where do I bring a claim? 

If your principal is based abroad, you may be required to sue your principal in a country other than that in which you are based. The position in relation to jurisdiction and choice of law can be complicated, and we recommend that you take advice from us on this point, if applicable. 

What is the difference between jurisdiction and choice of law? 

Jurisdiction relates to which country’s courts should hear the dispute, and choice of law relates to which country’s law should apply. It is possible that one country may have to apply the law of another country if the jurisdiction and choice of law clauses conflict. 

How do I sue my principal in another country? 

In the first instance, we recommend that you get in touch with us so we may advise you. We are a member of the MSI Global Alliance and have partner lawyers all over the world.  We also have a network of specialist agency lawyers across Europe who we can put you in touch with.  

If you require legal advice from a lawyer in another country, we will likely be able to put you in touch with an agency specialist in that country who will be able to assist you. 

What if it is not clear which country’s law applies to my dispute? 

Where there is no written agency agreement or where the agreement is silent on jurisdiction and governing law, determining which country’s law applies can be difficult. In these cases, factors such as where the work was carried out, where payments were made, and where the parties are based will influence the outcome. 

If this applies to your agency arrangement, please get in touch. We can assess your situation and work with our international network to provide tailored advice.