Relationship of principal and agent
Relationship of principal and agent

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

  • Relationship of principal and agent
  • Brexit
  • General
  • Status of appointment
  • Duties of agent to principal
  • Duties under contract
  • Fiduciary duties
  • Duties of principal to agent
  • Remedies for default
  • Agency contract

Brexit

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.

General

In business matters, the rights and duties of principal and agent are normally set out in a written agency agreement. Additional rights and duties may be implied by law if not contained within the agency agreement. In particular, the Commercial Agents (Council Directive) Regulations 1993, SI 1993/3053 impose specific provisions in respect of commercial agents, which in most cases cannot be excluded by contract. Where commercial agents are concerned see also: Commercial agency and Termination of commercial agency arrangements.

An agency relationship is one of trust. The agent thus owes the principal fiduciary as well as contractual duties (established in Parker v McKenna[1874-80] All ER Rep 443).

Status of appointment

An agent's appointment may be:

  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; exclusive agents will normally wish to ensure that