Nature and types of agency
Nature and types of agency

The following Commercial practice note provides comprehensive and up to date legal information covering:

  • Nature and types of agency
  • Brexit
  • Nature of agency
  • Types of agency
  • Capacity
  • Creation of agency
  • Requirement of deed
  • Duties and effect of agency
  • Commercial agency
  • Competition law and tax


As of exit day (11 pm on 31 January 2020) the UK is no longer an EU Member State. However, in accordance with the Withdrawal Agreement, the UK has entered an implementation period, during which it continues to be subject to EU law. This has an impact on this Practice Note. For further guidance, see: Brexit Bulletin—key updates, research tips and resources and Brexit toolkit.

Nature of agency

Agency is a relationship under which a principal appoints an agent to act under their direction and on their behalf for specified purposes. In business, such purposes are commonly the introduction or conclusion of contracts between the principal and customers or other third parties. The term ‘agent’ is sometimes used loosely in business and may refer to those, eg distributors, whose activities are similar to those of agents but who are not agents in law.

In commercial matters, the parties will normally have a written agreement that sets out:

  1. the scope of the agent's authority

  2. the parties' rights and duties

  3. under what circumstances and with what consequences the agency can be terminated

  4. general commercial provisions, and

  5. where relevant, provisions required by or relevant to the Commercial Agents (Council Directive) Regulations 1993, SI 1993/3053 (the Commercial Agents Regulations); see Practice Note: Commercial agency

For a Precedent that can be adapted as necessary, see Precedent: Sales and marketing agency agreement for goods—non-exclusive—pro-principal

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