If you are planning to expand the sale of your products and services into new markets or geographic locations by using third party agents it is important to ensure each party is clear about its responsibilities and any operational boundaries. This is best achieved through the drafting of a meticulous agency agreement.

What is an agency agreement?

An agency agreement is a contractual arrangement involving:

  • The business owner (principal) offering products or services for sale
  • The agent tasked with selling these goods on behalf of the principal
  • This arrangement establishes a ‘fiduciary’ relationship wherein the agent, in a position of trust, is obligated to act as if they were the principal business owner when representing and selling the principal’s goods or services

The different types of agency agreements include:

  • Introduction Agency Agreements: The agent introduces customers to the business, earning a commission from the principal. Also known as referral, commission, or finder’s fee agreements.
  • Cross-border Sales Agency Agreements: Typically exclusive, these agreements authorise the agent to conduct business on the principal’s behalf in specified jurisdictions and territories.
  • Sales of Services: Encompassing scenarios where a sales agent sells the principal’s services or engages service providers on behalf of the business.
  • Sales of Goods: Involving negotiations for the sale of goods on behalf of the principal’s business.
  • Marketing Agency: Allowing the agent to advertise or market the principal’s products or services, with no authority to finalise the sale of goods or services.

When navigating challenging market conditions, strategic and targeted business expansion becomes the linchpin for success. Optimise your agency agreements with AG Corporate Law Limited. Expert legal guidance for solid partnerships. Reach out to our skilled commercial lawyers today for bespoke solutions and trusted advice.