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Principal’s breach

As an agent, there may be certain scenarios where your principal is in breach of its basic obligations towards you, such as failing to pay commission at all, or on time, or otherwise seeking to impose changes to important terms of the agency, without your prior agreement. Subject to what is set out in the next paragraph, such breaches may potentially entitle you to consequently treat the agency as effectively terminated by the principal’s relevant actions, and to then pursue (as appropriate:-) a claim for compensation or an indemnity pursuant to Regulation 18(b)(i) of the Commercial Agents Regulations (which sub Regulation entitles an agent to bring such a claim under Regulation 17 (for compensation/an indemnity) where that is ‘justified by circumstances attributable to the principal’).

However, any above type of situation will always depend on its particular facts, and it is essential therefore that expert legal advice is very promptly sought before any steps are taken, as any potential right to treat the agency as terminated will also require the agent (1) to have taken whatever may be the legally appropriate course of action, and (2) to have taken such action without delay.

Although (and as I say) everything depends on the relevant facts, it would generally normally be best practice (as part of the agent’s very prompt response) to set out the principal’s breaches in writing, and to set a short (but realistic) timescale for those breaches to be remedied. Also, any notice of termination (if matters progress to that stage) should clearly detail the principal’s breach(es) and reference those as the reason for the ending of the relationship.

© David Bentley, Bentley Agency Law Limited, Bentley & Co Solicitors 7 Littlemoor Road, Pudsey, Leeds, LS28 8AF
T: – 0113 236 0550 e-mail:- [email protected].

The ONLY law which we practice is the law as it relates to commercial agents.

Please note that, as far as we can, we take cases on on a “success related fee”.

Please ensure that you obtain legal advice before acting in reliance upon anything in this article, particularly since each individual’s circumstances may necessitate a unique approach, and also on account of the fact that the law may of course at any time change. Furthermore, please be very clear that the answers given in this column may not cover or otherwise refer to all possible angles, aspects, relevant information and/or points of law and so that all or any information which is given above needs in every instance to be referred for legal advice for clarification and amplification, before being relied upon.

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