The law on commercial agents
Understand how you must treat your commercial agent under the Commercial Agents Regulations 1993 including the legal protection they may be entitled to.
The main law regarding commercial agents is the .
A commercial agent is defined as a self-employed intermediary who has the authority to negotiate and conclude the selling or buying of goods on behalf of another person.
This definition covers incorporated and unincorporated bodies as well as individuals.
An individual cannot be a commercial agent if they are:
- an officer of a company or association and they have the power to enter into binding commitments on behalf of that company or association
- a partner who is lawfully authorised to enter into commitments binding on their partners
- an insolvency practitioner
The law on commercial agents also sets out the following:
- Agents are given substantial legal protection - similar to that given to employees.
- You must supply a commercial agent with all necessary documentation and information concerning the goods or services you wish the agent to sell.
- You have to inform the agent if sales volumes are likely to be lower than expected.
- The agent is also required to make proper efforts on behalf of your business and to communicate all necessary information to you.
- The agent is entitled to the same rates of pay as other agents in the same sector if no figures are mentioned in the contract.
- The law also sets out statutory notice periods of up to three months for agents. In many cases, the agent is also entitled to compensation when the agency's contract is terminated.
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