DATED
200
[PRINCIPAL]
and
[AGENT]
AGENCY AGREEMENT
Notes: 1. 2. 3.
110897/SJM
Prepared for Principal. Complies with the Commercial Agents (Council Directive) Regulations 1993. Not for use outside England, Scotland and Wales.
AGENCY AGREEMENT
PARTIES
(1)
“Principal”
(1)
* incorporated in * of *
(2)
“Agent”
(2)
* incorporated in * of *
1.
DEFINITIONS
The following words shall mean:-
(3)
(4)
“Net Sales Value”
*
“Products”
*
“ Territory”
*
2.
APPOINTMENT
2.1
The Principal appoints the Agent as the Principal’s [exclusive* or non-exclusive] Agent for the sale of the Products in the Territory.
2.2
The Principal will not appoint any other person, firm or company as Agent for the sale of the Products in the Territory.
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2.3
The Agent will not manufacture, distribute or represent goods which compete with the Products in the Territory and will refer all enquiries from outside the Territory to the Principal.
2.4
The authority of the Agent is limited to soliciting orders for the Products in the Territory at prices and on delivery and other terms specified from time to time by the Principal and the Agent shall have no authority to sign contracts for or on behalf of the Principal nor to commit the Principal to any contractual obligation.
2.5
The Agent has no authority to receive any monies payable to the Principal unless expressly authorised by the Principal to do so. If, notwithstanding this provision the Agent does receive any such monies, the Agent shall not pay such monies into any bank account and shall immediately ask the Principal for instructions.
(5)
2.6
[house accounts: ]
(6)
2.7
[sales targets: ]
2.8
The Agent may not assign or otherwise transfer the benefit of this Agreement and this will include a change of ownership of the Agent or a material change in its management.
2.9
This Agreement is the entire agreement between the parties in respect of this agency and supersedes and cancels all previous arrangements and understandings.
(7)
3.
DURATION
3.1
This Agreement begins on the date of signing and subject to clause 8, expires on * without need of notice by either party. OR
3.1
This Agreement begins on the date of signing of both parties and continues, subject to clause 8, unless and until terminated by written notice given by either party to the other. The notice period shall be:-
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(I)
one month during the first year of this Agreement.
(ii)
two months during the second year of this Agreement. -2-
(iii)
three months during the third and any subsequent year of this Agreement.
Such notice may be given at any time and the expiry date need not be the end of a calendar month. OR
3.1
This Agreement begins on the date of signing by both parties and continues subject to clause 8, for an initial fixed term of * years and thereafter unless and until terminated by written notice given by either party. The notice period shall be:(I)
one month during the first year of this Agreement.
(ii)
two months during the second year of this Agreement.
(iii)
three months during the third and any subsequent year of this Agreement.
Such notice may be given to expire on or at any time after the initial fixed term and the expiry date need not be the end of a calendar month.
(8)
4.
COMMISSION
4.1
The Principal will pay the Agent commission at the rate of *& of the Net Sales Value of the Products delivered by the Principal in the Territory pursuant to a contract secured by the direct efforts of the Agent:-
(9)
(I)
during the period of this Agreement; and
(ii)
after the termination of this Agreement, but where the order from the customer reached the Principal or the Agent before such termination; and
(iii)
after the termination of this Agreement where the transaction (giving rise to commission) was mainly attributable to the Agent’s efforts before such termination and was entered into by the Principal within a reasonable time after such termination.
4.2
Commission will become due on the date of payment in full by the customer.
4.3
The Principal will pay commission not later than the last day of the month next
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following the end of the quarter when such commission is due to the Agent.
4.4
The Agent shall not be entitled to commission under clause 4.1 where the Principal has an obligation to pay commission to a former agent in respect of the same transaction, unless it is equitable because of the circumstances for the commission to be shared between such former agent and the Agent. Commission already paid to the Agent shall be refunded to the Principal if and to the extent that such commission is payable to the former agent.
4.5
The Principal will supply the Agent a statement of the commission payable to the Agent not later than the relevant payment date setting out the main components used in calculating the amount of the commission.
4.6
The Principal will supply to the Agent all the information, and in particular and extract from the Principal’s books, which is available to the Principal and which the Agent needs to check the amount of the commission due to him.
4.7
Any entitlement to commission shall be extinguished and any commission paid to the Agent shall be refunded if and to the extent that it is established that the relevant transaction will not be executed and that fact is due to a reason for which the Principal is not to blame.
4.8
The Principal is entitles to set-off against any monies payable to the Agent all lawful claims and monies due to the Principle from the Agent.
5.
MUTUAL OBLIGATIONS
5.1
The parties will act in good faith and will co-operate to maximise the sales of the Products in the Territory.
5.2
In performing this Agreement, the Agent will look after the interests of the Principal and act dutifully and in good faith, and in particular (but not by way of limitation) the Agent will:-
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(I)
make proper efforts to negotiate the transactions he is instructed to take care of;
(ii)
communicate to the Principal all the necessary information available to him;
(10)
(iii)
comply with reasonable instructions given by the Principal;
(iv)
[specific obligations]
•
content and frequency of activity reports
•
representation at trade fairs, exhibitions or sales outlets
•
credit checks on customers and potential customers
•
assist with collection of monies from customers
•
safeguarding and condition of samples
•
general SWOT market intelligence
•
enquiries from house or excluded accounts
•
maintain a list of customers and potential customers and make available to Principal
5.3
•
report on any complaints or after-sales queries
•
assist Principal with any legal action in the Territory
•
only use the Principal’s trade names, labels and packaging
•
introduce Principal to customers
The Agent warrants to the Principal that the Agent has the proper resources (including, but not limited to personnel and premises) to perform this Agreement.
5.4
In performing this Agreement, the Principal will act dutifully and in good faith, and in particular (but not by way of limitation) the Principal will:(I)
provide the Agent with the necessary documentation relating to the Products;
(ii)
obtain for the Agent the information necessary for the performance of his duties to the Principal; and
(iii)
notify the Agent within a reasonable period once the Principal anticipates the volume of commercial transactions will be significantly lower than that which the Agent could normally have expected.
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5.5
Without prejudice to clause 5.4, the Principal will inform the Agent within a reasonable period of his acceptance or refusal of any non-execution by the Principal of a commercial transaction which the Agent has procured for the Principal.
5.6
The Principal shall be entitled to modify or cease manufacture and supply of any Products after reasonable consultation with the Agent. Nothing in this Agreement shall restrict the Principal’s absolute right to refuse any order whether secured by the Agent or otherwise and the Principal shall owe the Agent no commission or other compensation as a result of any such refusal.
6.
CONFIDENTIALITY
6.1
The Agent will keep confidential information relating to the business and affairs of the Principal both during the period and after the termination of this Agreement. This obligation shall cease if and to the extent that any such information enters the public domain without breach on the part of the Agent.
6.2
The Agent agrees to return to the Principal any documents containing such confidential information on the termination of this Agreement.
7.
INDUSTRIAL PROPERTY
7.1
The Agent is authorised to use the Principal’s trade mark(s) and trade name in connection with the Products in the performance of his obligations under this Agreement. The Agent will not use the said trade mark(s) or trade name in any other way.
7.2
The Agent will use his best efforts to preserve such trade mark(s) and trade name and will promptly report any infringement to the Principal.
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7.3
The Agent agrees that he will not acquire any interest in such trade mark(s) or trade name nor the trade mark(s) or trade name of any customer by virtue of his use of them in the performance of this Agreement and will cease his use of such trade mark(s) and trade name(s) on the termination of this Agreement.
8.
TERMINATION
8.1
Either party shall have the right to terminate this Agreement immediately by written notice to the other if:(I)
the recipient is either in material breach, or (after warning)( persistent breach of this Agreement; or
(ii)
the recipient is unable to meet its financial obligations, is insolvent, in liquidation, or bankrupt, or enters into any arrangement with creditors.
8.2
The Principal shall have the right to terminate this Agreement by immediate written notice if the Agent fails to achieve the sales targets referred to in clause 2.7.
(11)
8.3
Termination shall be without prejudice to any antecedent breach or liability.
8.4
[samples]
8.5
The Principal shall be entitled to withhold any payments due to the Agent until the Agent has delivered to the Principal a complete and up-to-date list of all customers (actual and potential) visited or canvassed by the Agent.
(12)
8.6
For a period of [
] months from the date of termination of this Agreement for
whatever reason, the Agent will not, whether on his own account, or as an employee or in any representative or consultancy capacity, directly or indirectly engage or be concerned within the Territory in the promotion or sale of any goods competing with the Products to the Principal’s customers and those potential customers visited or canvassed by the Agent. 110897/SJM
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(13)
9.
COMPENSATION ON TERMINATION
9.1
The Agent shall be entitled to compensation on the termination of this Agreement subject to and in accordance with the Commercial Agents (Council Directive) Regulations 1993.
OR
9.
INDEMNITY ON TERMINATION
9.1
On termination the Agent shall have no claim against the Principal for compensation for loss of agency rights, goodwill or other such loss (save for the avoidance of doubt a claim for damages by reason of any antecedent breaches by the Principal of the terms of this Agreement) otherwise in accordance with the terms and conditions of this clause 9.
9.2
The Agent shall be entitled to an indemnity pursuant to the terms and conditions of this clause in the event of termination of the Agreement where:
9.2.1
the Principal is guilty of a breach pursuant to clauses 8:1;
9.2.2
the Principal gives notice to terminate pursuant to clause 3;
9.2.3
the Agent (being an individual) gives notice that he is unable to fulfill his obligations pursuant to the terms and conditions of this Agreements as a result of illness, infirmity, or age; or
9.2.4
9.3
the Agent (being an individual) has died.
Subject always to clause 9.6 the indemnity to the Agent shall be payable if an to the extent that:-
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9.3.1
the Agent has brought the Principal new customers in the Territory or has significantly increased the volume of business from customers and the Principal continues to derive substantial benefits from the business with those customers and
9.3.2
the payment of this indemnity is equitable having regard to all the circumstances and, in particular, the commission lost by the Agent on the business transacted with customers.
9.4
The amount of the indemnity shall not exceed a figure equivalent to the Agent’s average annual commission such average annual figure to be calculated by reference to the commission received by the Agent over the period of [his/its] appointment or five years (whichever is the lesser) and which shall take into account the matters set out in Regulation 17(3) and (4) of the Commercial Agents (Council Directive) Regulations 1993.
9.5
The indemnity shall be paid to the Agent within [3] months of agreements of the amount payable between the parties.
9.6
No indemnity shall be payable to the Agent pursuant to this clause 9 unless the Agent has given notice in writing to the Principal of [his/its] claim for the indemnity before the expiry of one year from the date of termination of this Agreement.
10.
NOTICES
10.1
Any notice, statement or other document to be given or supplied to a party, may be so give or supplied:(I)
by delivering it to the party concerned;
(ii)
by leaving it at his proper address addressed to the party concerned by name. For these purposes “proper address” means in the case of a company its registered office or other trading address
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and in the case of an individual or partnership his or their private or other trading address; or (iii)
by sending it by post to the party concerned at its, his or their proper address.
10.2
Such notice, statement or document shall be deemed given or supplied on the date of delivery or leaving or, if sent by post, on the first working day after posting.
11.
LAW
The validity, performance and construction of this Agreement shall be governed by English law. The English Courts shall have jurisdiction.
................................................................. For the Principal
................................................................. For the Agent
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GUIDANCE NOTES (1)
Insert full details of the Principal.
(2)
Insert full details of the Agent.
(3)
Insert appropriate definitions.
(4)
“exclusive” means that the Principal will not appoint another agent for the same Territory and goes with clause 2.2. “Non-exclusive” means that the Principal may appoint another agent for the same Territory and so delete clause 2.2.
(5)
You may wish to exclude specified house accounts.
(6)
You may wish to have annual or other sales targets. If you don’t, delete clause 8.2.
(7)
If you want a fixed term take legal advice because of the Regulations.
(8)
The commission rate is a commercial decision.
(9)
It appears that the parties can agree to delete paras (ii) and (iii) but if you do, replace with: “No commission shall be paid in respect of sales made by the Principal after the date of termination”
(10)
This list of obligations is not an exhaustive list and the decision what to include and how to better describe each obligation is a commercial decision.
(11)
You may wish to deal with the return of samples here.
(12)
Such a clause is permitted under the Regulations for a maximum period of 2 years but such a clause us difficult to enforce and legal advice should be taken as to the period and your specific circumstances.
(13)
A Principal cannot exclude an Agent’s claim for compensation and indemnity so clause 9 merely confirms the legal position. There are two options and you need to choose:either •
an indemnity
or
compensation for damage
•
Warning Every effort has been made to ensure that this Model Agreements complies with the Commercial Agents (Council Directive) Regulations 1993, but this is new legislation which has not yet been tested in the Courts and therefore no legal responsibility is accepted for any errors or omission. Users of the Model Agreement must take legal advice to fully understand and apply the agreements to their own circumstance and in particular with regard to termination payments.
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