Module two of this Dealing with Agents & Distributors course Covers regulations 17-20 of the Commercial Agents Regulations 1993 particularly as they apply to Agency Law.
In accordance with Regulation 18 of the Regulations, there are some grounds for excluding payment under the compensation or indemnity mechanism. This will arise where the relationship has been terminated due to the default of the agent.
The following graphic provides a number of grounds for excluding payment and a few exceptions
Regulation 18 provides that the agent is not entitled to a payment where he terminates the relationship, except where the reason for that termination is for reasons including:
Agent has assigned contract
Furthermore, in the event that the agent has assigned the agency contract without the consent of the principal and bring the claim in the name of the assignee, there shall be no such right to do so. This took place in the case of Barnett Fashion Agency v Nigel Hall Menswear following an incorporation of the agent.
Barnett Fashion Agency ltd v Nigel Hall Menswear Ltd:
In this case, Mr Barnett incorporated the company Barnett Fashion Agency Limited and purported to transfer all of his agency contracts, including the Nigel Hall Menswear contract to this new company.
He did not however, discuss or agree this transfer with any of his principals and the only change was that invoices were headed "David Barnett Associates trading as Barnett Fashion Agency Limited" and payment of commission was made to the new company. After the termination of the agency contract, Mr Barnett pursued compensation but did so in the wrong name. It was because of this that the time limit expired, as briefly mentioned earlier.
Understandably, principals want to impose restrictions onto agents given the time, money and confidential information which is invested into them. However, bearing in mind the rights and remedies available to agents as set out above it will not come as a surprise that there are certain safeguards dealing with how such restrictions may be imposed on the agents under Regulation 20.
This provides that in order to be valid a restraint of trade clause must:
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