Reviewing an agency agreement before you sign

An agency agreement appoints the agent to find customers and negotiate sales for a principal in return for commission, and where the agent is self-employed and the principal sells goods, the Commercial Agents (Council Directive) Regulations 1993 give the agent rights that the agreement cannot remove. The agreement has to be read against those rights. I review the agreement from the agent's side and return it marked up with a written explanation of the changes and the statutory rights the agreement must respect, for a fixed fee of £495 in three working days.

Who this is for

Self-employed sales agents, agency businesses and consultants in England and Wales who have been sent an agency or sales representative agreement by a manufacturer, importer or brand, and want to know how it treats their commission, their territory and their position when it ends. The principal and the agent are businesses, so the relationship is business-to-business; the Regulations apply where the agent negotiates the sale or purchase of goods on the principal's behalf.

What to look for in an agency agreement

Whether the Regulations apply, and what cannot be excluded

The Commercial Agents (Council Directive) Regulations 1993 apply to a self-employed intermediary with continuing authority to negotiate the sale or purchase of goods for a principal; they do not apply to services, to a distributor buying and reselling, or to an agent whose activities are secondary. The review confirms which side of that line the agreement falls and, where the Regulations apply, checks that the agreement does not purport to remove the rights they give: the principal cannot contract out of the minimum notice in regulation 15 or the compensation or indemnity in regulation 17 to the agent's detriment, and a clause that tries to is unenforceable.

Commission: when it is earned, when it is due, and after termination

The agreement should define the commission rate, the transactions it attaches to, and the territory or customer group. Under regulation 8 the agent is entitled to commission on transactions concluded after the agency ends where the order was mainly attributable to the agent's efforts during the agency and was placed within a reasonable period, and under regulation 10 commission falls due when the principal has executed the transaction or should have, and must be paid at the latest by the end of the following quarter. Regulation 12 entitles the agent to a statement of commission due and to the information needed to check it. The review marks up any clause that defers commission until the customer pays, or that cuts off post-termination commission entirely.

Territory, exclusivity and the principal's own sales

The agreement should say whether the agent has exclusive rights in a territory or to a customer group, and whether commission is payable on sales the principal makes in that territory without the agent's involvement, which the Regulations provide for where the agent has an exclusive right. The review checks the principal's freedom to appoint other agents, to sell direct, and to change the territory or the products on notice, and asks for commission on house accounts and direct sales in an exclusive territory to be dealt with expressly.

Restraint of trade and duties during the agency

A post-termination restraint of trade clause is valid under regulation 20 only if it is in writing, relates to the territory or customer group and the goods covered by the agency, and lasts no more than two years. The review checks any non-compete against that rule and asks for it to be limited to competing goods in the agent's own territory. During the agency the agent owes the duties in regulation 3, to act dutifully and in good faith and to comply with reasonable instructions, and the review checks that the principal's reciprocal duties, including supplying documentation and telling the agent when it expects sales to fall, are stated rather than omitted.

Notice, compensation and the choice between indemnity and compensation

Regulation 15 sets minimum notice of one month in the first year, two in the second and three thereafter, and the agreement cannot shorten it. On termination the agent is entitled under regulation 17 to compensation for the damage suffered by the ending of the agency or, if the agreement says so, to an indemnity of up to one year's average remuneration. The review checks which the agreement chooses, since silence means compensation, that the agent's right to claim survives termination, and that the agreement records that the agent must give notice of the claim within one year of termination or lose it. Where the agent handles customer payments, the review checks the position under the Payment Services Regulations 2017, which exclude a commercial agent acting for one party from the regulated activities.

What it costs

Standard review, £495. Marked-up document and a written explanation of the changes. Three working days.

Complex review, £895. Heavily negotiated or unusually complex documents. Five working days.

Buying online forms the engagement on payment. The scope is what the contract review page describes, you accept the Terms of Service at checkout, and I email you within four working hours to get started. If you would rather ask something first, email me.

What you get

• Your own contract returned with my amendments as tracked changes, plus a clean version with every change accepted, ready to send to the other side
• Comments in the document where a point needs explaining
• A written explanation of what I have changed and why, by email or as an attachment if it is lengthy, marking the points I would hold firm on and the ones that are negotiable
• A view on what is normal market practice and what is the other side pushing their luck
• One round of follow-up questions by email, included

What is not included

• Negotiating directly with the other side, which I quote separately once I know who is on the other side. Where the other side is willing to share a live document, I can work in that document directly
• Drafting a replacement contract from scratch
• Advice on the law of any jurisdiction other than England and Wales
• Tax, accounting or regulatory advice
• Disputes about a contract that is already signed

Questions I am often asked

The agreement says no compensation is payable when it ends. Can they do that?

Not where the Regulations apply to you. The right to compensation or an indemnity on termination cannot be excluded to your detriment, so the clause is unenforceable, but the review marks it up so that the agreement records the right rather than leaving you to prove the point later.

We sell services, not goods. Do the Regulations protect us?

The Regulations apply only where the agent negotiates the sale or purchase of goods. For services the protection comes entirely from the agreement, so the review concentrates on notice, post-termination commission and restraint of trade clauses, which then have to be negotiated rather than implied.

Can the principal stop us working for anyone else?

During the agency it can restrict you from competing products. After termination a restraint is enforceable only if it is in writing, covers your territory or customer group and the goods of the agency, and lasts no longer than two years. The review marks up anything wider.

Related guidance and services

• Contract review, £495, the service this page describes
• Consultancy and contractor agreements, £595
• Reviewing a distribution agreement from a manufacturer

This page is general guidance for businesses in England and Wales, not advice on your own circumstances. Last reviewed: September 2026. Email geoffrey@caesar.co.uk.