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Agency & Distribution Agreements

Our Commercial team has a wide range of experience in advising on supply chain agreements including agency and distribution agreements.

While sharing similarities, agency agreements and distribution agreements are different, and the type of agreement you need will depend on your business’s individual circumstances.

Our commercial contracts solicitors can talk you through the options in detail, ensuring our advice is straightforward and commercially-focused, so you can make an informed decision about how to move forwards.

We draft bespoke agency & distribution agreements on behalf of businesses across Chichester, Fareham, Havant and the wider Hampshire and West Sussex areas.

Get in touch with us for agency & distribution agreement legal advice

Give us a call at your local branch in Chichester, Fareham or Havant or fill in our simple online enquiry form for a quick response.

Why choose our agency agreement & distribution agreement solicitors?

Our Commercial team has a strong reputation for supporting local, national and international businesses across a wide range of sectors. We combine technical legal expertise with the commercial know-how needed to help your business succeed.

We carefully tailor our advice to suit the everyday needs of your business, negotiating terms to ensure your agency or distribution agreement protects your interests and helping you nurture lucrative, long-term relationships.

We will ensure that any key issues and potential future problems are identified and accounted for. Our highly experienced Dispute Resolution team can also step in to assist should any disagreements arise.

The Glanvilles’ client service promise

Your experience with us is extremely important. You will have your own personal lawyer who will take responsibility for progressing your matter and making sure things move forwards as cost-effectively as possible.

When you use our commercial law service, we promise:

  • Our staff will be friendly, respectful and attentive.
  • Your concerns will be listened to, your questions answered, and your options explained in plain English.
  • The cost of dealing with your requirements will be made clear to you from the outset.
  • We will answer your phone calls and emails promptly.
  • We will keep you regularly updated at all times.

What is an agent?

An agent is an intermediary who is retained to act on behalf of a principal and to contract for and on behalf of that principal.

Agents will usually be specialists in a particular niche, such as a specific industry or geographical area, that the principal may not have a lot of knowledge about.

The agent’s role is usually to sell or promote the principal’s products or services and may be paid a commission in return. However, the agent does not have a contractual relationship with the principal’s customers or clients, only with the principal.

What is a distributor?

In contrast to an agent, a distributor contracts for the distributor's own account. This means they resell goods or services produced by the principal business. The distributor contracts directly with the clients or customers with no involvement from the principal.

What is the difference between an agency agreement and a distribution agreement?

In both cases, a business may appoint an agent or distributor to take advantage of their expertise within particular niches or markets. The main difference is that an agent acts as an intermediatory and has ‘agency’ to sell the principal business’s products and services, but does not have a contractual relationship with the end customer or client. A distributor also sells the principal business’s products and services and does have a contractual relationship with the end customer or client.

In either instance, a number of considerations must be taken into account to ensure the agreement protects the interests of all parties. In addition, there are a wide range of laws applying to both agency and distribution arrangements.

Which option is right for you?

It all depends on what your business wants to achieve. Our commercial contracts lawyers can provide bespoke advice about the options, bearing in mind your commercial goals and market factors.

The advantages of entering into an agency agreement include:

  • The supplier retains a great deal of control over the product or services, in particular price and marketing methods.
  • The supplier and end customer retain direct contact for future sales.
  • Typically, fewer competition laws apply.

However, the Commercial Agents Regulations are likely to apply to this type of agreement, imparting certain legal responsibilities on the parties. For example, under the Regulations, the supplier retains all the financial risk of the product or service not selling and will typically be liable for the actions of their agent.

The advantages of entering into a distribution agreement include:

  • Much of the financial risk can be passed on to the distributor.
  • The supplier will not usually be liable for the distributor’s activities.
  • The distributor will save the supplier from having to incur the administrative costs of expanding their business into the markets and territories in which the distributor already operates.
  • The supplier is not responsible for relationships with the end customers, only with the distributor.

However, the supplier will also have less control over the activities of the distributor and there are aspects of competition law that the parties must account for.

What is the law on agency agreements?

In the UK, agency agreements are mostly governed by the Commercial Agents Regulations 1993. Although these Regulations implement an EU Directive, they still apply post-Brexit until Parliament decide whether to change the law.

The Regulations will apply to an agency agreement if the commercial agent:

  • Is self-employed.
  • Operates in England, Wales or Scotland.
  • Has a ‘continuing authority’ from the principal.
  • Has authority to negotiate the sale or purchase of goods for the principal.
  • Markets the principal’s goods as a fulltime business activity.

The Regulations apply a strict set of rules to agency agreements regarding matter such as:

  • Commission.
  • Termination.
  • Compensation.
  • Restrictive covenants and ‘restraint of trade’ clauses.

We can provide specialist advice to agents and suppliers about the Commercial Agents Regulations.

What is the law on distribution agreements?

Distribution agreements in the UK are often affected by competition law under the Competition Act 1998 and the Enterprise Act 2002. There are also elements of EU competition law which affected distribution agreements, so if you had a distribution agreement in place prior to 31 December 2020, it is important to seek legal advice, particularly in relation to cross-border transactions.

Competition law addresses issues such as:

  • Anti-competitive agreements that:
    • Price fix.
    • Limit production.
    • Discriminate between customers.
    • Grant exclusive territories.
  • Abuse of dominant market position:
    • Charge prices much higher than the competition.
    • Limit production.
    • Charge different prices for different customers.
    • Fail to supply to long-standing customers without providing a good reason.

We can provide specialist competition law advice to distributors and suppliers.

Get in touch with us for agency & distribution agreement legal advice

Give us a call at your local branch in Chichester, Fareham or Havant or fill in our simple online enquiry form for a quick response.