The key to having a successful relationship with a commercial agent who is acting on behalf of your company in the UK, is planning ahead.

We see it all too often; Company/Commercial agent partnerships operate with unwritten agreement as the business is small and in a start-up phase. 

However, once the business starts to grow and increase its revenue the principal may want to reduce costs by lowering the amount of commission they are paying to the commercial agent. 

This is when difficulty can start. 

My advice for solicitors when arranging a commercial agent agreement:

–       Prepare a formal written contract.

–       Have the contract worded so that the compensation provisions do not apply.

–       Understand how the agent operates and their cost and revenue base.

It’s essential to know how the agent operates when it comes to quantifying the compensation due on termination, so you need to accumulate as much information as possible well before there is any thought of terminating the contract. 

In most cases a commercial agent has few overheads, so the potential for a large claim is considerable.

Quite often a lot of accounting analysis and negotiations are needed to settle a commercial agent dispute so it is always best to talk to Vero first, to determine the expected costs before terminating an agent and the options.

To find out more about commercial agent compensation, please click here and I’d be happy to have a ‘commitment free’ discussion about your issue. 

 

Regards, 

Charles Lazarevic