Q&As

Can a non-solicitation of customers clause be inserted into a non-exclusive agency agreement, or are there any rules in place restricting/preventing this?

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Produced in partnership with Lynne Counsell of 9 Stone Buildings
Published on LexisPSL on 31/07/2018

The following Commercial Q&A Produced in partnership with Lynne Counsell of 9 Stone Buildings provides comprehensive and up to date legal information covering:

  • Can a non-solicitation of customers clause be inserted into a non-exclusive agency agreement, or are there any rules in place restricting/preventing this?
  • Agency agreements
  • Non-solicitation clauses
  • Summary—enforceability of the clause in an agency agreement

Agency agreements

The Q&A relates to a non-exclusive agency agreement whereby the principal may wish to appoint other agents. It has been assumed that this is an agency agreement that is subject to the provisions of the Commercial Agents (Council Directive) Regulations 1993, SI 1993/3053, which confer certain protection on the agent. The substantive terms in such an agreement would be:

  1. terms of the agency (defining the product/services to be provided and the territorial scope of the agency)

  2. duties and responsibilities of the agent

  3. duties and responsibilities of the principal

  4. commission/fees due to the agent and expenses

  5. intellectual property/Proprietary rights/Confidential information. This would be to the effect that such rights and property (including the list of the principal’s contacts and buyers and the names and addresses of all the principal’s employees remain the property of the principal and all data must be returned to the principal at the termination of the agreement)

  6. termination

The duties of the agent could include a duty to promote the interests of the principal and avoid conflicts of interest between their own interests and that of the principal. However, this is not equivalent to an express non-solicitation clause as envisaged by the question and might only be construed as applying during the continuance of the agreement, not after its termination.

Non-solicitation

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