Q&As

A principal has contracts with a number of non-exclusive agents in a defined territory, and wishes to appoint an exclusive agent for the same territory. Does the proposed exclusive agency agreement put the principal in breach of its non-exclusive agency contracts?

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Published on LexisPSL on 10/08/2016

The following Commercial Q&A provides comprehensive and up to date legal information covering:

  • A principal has contracts with a number of non-exclusive agents in a defined territory, and wishes to appoint an exclusive agent for the same territory. Does the proposed exclusive agency agreement put the principal in breach of its non-exclusive agency contracts?
  • Exclusive and non-exclusive agency agreements
  • Good faith

Exclusive and non-exclusive agency agreements

The terms ‘exclusive’, ‘non-exclusive’ and ‘sole’ are used frequently to describe the rights granted under both agency and distribution agreements, but these terms have no set legal meaning and so it is important to define precisely what is meant by these terms within the agreements themselves.

The common meaning of these three forms of agency relationships are:

  1. exclusive—only the agent may sell or supply the designated products in the specified territory and the principal may not do so or appoint others to do so

  2. sole—the principal may sell or supply the products in the territory but may not appoint other agents to do so

  3. non-exclusive—the principal may sell or supply the contract goods in the territory and may appoint other agents to do so

For further general information on these forms of agency relationship, see Practice Note: Relationship of principal and agent.

In determining whether there has been a breach of

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