FAQs

A written agreement helps clearly define:

• Roles and responsibilities
• Payment or commission structures
• Territory and exclusivity rights
• Termination rights

In practice:
Without a written agreement, you may face disputes over commission payments or whether a party has exclusive rights to sell in a certain region.

Yes. Commercial agents are often protected by the Commercial Agents (Council Directive) Regulations 1993, which can give agents rights such as:

• Minimum notice periods for termination
• Compensation or indemnity on termination (in certain circumstances)

In practice:
If you terminate an agent relationship, you may still have to pay compensation—even if the contract is silent—so it is important to understand these obligations in advance.

You should carefully consider:

• Territory and exclusivity
• Commission or pricing structure
• Performance obligations or targets
• Duration and termination rights
• Post-termination restrictions

In practice:
Granting “exclusive rights” to a distributor without performance targets could prevent you from appointing others—even if sales are poor.

The contract should set out what happens on termination, including:

• Final payments or commissions
• Return of stock or materials
• Ongoing restrictions (e.g. non-compete clauses)

For agents, statutory compensation rights may apply.

In practice:
A distributor may be required to stop using your branding immediately, while an agent may be entitled to a termination payment reflecting lost future business.