Many businesses that manufacture and sell goods to the marketplace use sales agents as a means of reaching the market. This is an alternative to using employees or distributors. Sometimes businesses may feel that an agent may be more appropriate or flexible for bringing their products to the marketplace.

However, businesses should be aware of the Commercial Agents Regulations (1994), which provides protection for the agent at a number of levels. Most importantly, should the agency terminate, then the agent is entitled to claim compensation for termination, which could be higher than any redundancy claim that an employee may bring. Also, agents are entitled to a period of notice should the principal decide to terminate. In addition, agents are entitled to commission payments not only during the life of the agency contract but also for a period thereafter if they are able to show that their efforts brought about a sale post termination.

Businesses of all types should make sure that they have the correct written agreements in place, which govern the relationship between the agent and principal. Further, they should make sure that the issue of termination is properly addressed and that proper wording is used in order to give the principal adequate protection. Performance targets should also be used in order to make sure that the agent is performing adequately.

We are able to provide expert advice on all types of commercial agency situations and have experience of not only drafting the contracts governing the relationship but also we are able to provide advice to both principals and agents with regards to issues of termination.