When do you enter into an agency agreement?
You conclude an agency agreement to enter new markets without expanding your workforce. Even if your own activities in a certain area or market are not profitable, it can also be interesting to appoint an agent. An agent with specific knowledge of the market or area represents you and looks for sales channels based on commission.
Why should you enter into an agency agreement?
In principle you are not obliged to conclude an agency agreement. You can also make verbal agreements, but verbal agreements about agency often lead to problems and discussion. Moreover, in many countries mandatory legislation applies to agency agreements.
In the agency agreement you lay down, among other things, in which situations commission is due, to what extent and under which conditions (e.g. achievement of targets). It also states whether a non-competition clause applies to the agent, how long the contract lasts and how it can be terminated. Furthermore, the agreement allows you to assign an exclusive customer base or territory to the agent.
In addition, an agent under Dutch law (also under many foreign legal systems) is entitled to a goodwill payment for the customers he has introduced during the agency agreement upon termination of the agreement. The agreements in this respect are also set out in the agency agreement.
Please note: an agency agreement is always exclusive, unless it is explicitly stated that this is not the case.
Need help with an agency agreement?
Would you like support in drawing up and negotiating a workable and legally clear agency agreement? Or are you dealing with a dispute about or termination of an agency agreement? Our lawyers will be happy to assist you. Feel free to contact us for more information.