Termination of commercial agency
Termination of commercial agency

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

  • Termination of commercial agency
  • Commercial agencies for fixed and indefinite periods
  • The right to immediate termination
  • Method of termination
  • Entitlement to payment on termination or expiry
  • Indemnity
  • Compensation
  • Notification of claim
  • Indemnity v compensation
  • Insolvency
  • more

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 covers how the Commercial Agents (Council Directive) Regulations 1993 (the Commercial Agents Regulations), SI 1993/3053 govern the termination of a commercial agency arrangement. It covers a commercial agent’s rights to notice of termination and to payment of compensation or an indemnity in the event of such termination. It discusses the way that compensation and indemnity are calculated on termination of a commercial agency arrangement under the Commercial Agents Regulations and their relative merits for principals or commercial agents.

Commercial agencies for fixed and indefinite periods

A commercial agency for a fixed period, which both parties continue to perform after the expiry of that period, will be deemed converted into a contract for an indefinite period.

The Commercial Agents Regulations apply to a contract that has expired by effluxion of time.

Commercial agency contracts of an indefinite period may be terminated by either party on notice. The minimum period of notice is:

  1. one month for