Relationship of commercial agent and principal
Relationship of commercial agent and principal

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

  • Relationship of commercial agent and principal
  • Duties
  • Duties of commercial agent to principal
  • Duties of principal to commercial agent
  • Remuneration of agents
  • Termination of Commercial Agency

Brexit: As of exit day (11pm 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.

This Practice Note explains the relationship between a commercial agent and a principal as provided by the Commercial Agents (Council Directive) Regulations 1993, SI 1993/3053 (the Commercial Agents Regulations). For guidance on the application of the Commercial Agents Regulations, see Practice Note: Commercial agency.

Duties

The Commercial Agents Regulations set out the obligations between a principal and its commercial agent. Contrary to the position under UK agency law, many of the obligations contained in the Commercial Agents Regulations are mandatory and the parties are not free to contract out of them.

The common law on agency continues to apply where not inconsistent with the Commercial Agents Regulations. See: Agency—overview.

Duties of commercial agent to principal

Under the Commercial Agents Regulations, reg 3, a commercial agent must look after the principal's interests and act in good faith. In particular, the agent must:

  1. make proper efforts to negotiate and, where appropriate, conclude transactions under the agency agreement