Commercial agency and distribution agreements

If you are a business with a product or service to sell and you want to use the services of another business to help you achieve those sales, it is possible that a distribution or agency agreement might be appropriate, particularly if you want to control the sales process and ensure your interests are protected.

There are several reasons why you might want to use another business to help you with your sales. You might want to sell your goods or services in a foreign country and you may need a representative based in that country who understands the local market. You might be looking to keep your business within the UK but need a representative with a presence in certain geographic areas that you are unable to service yourself.

Under an agency agreement, the agent merely acts as your representative, carrying out your instructions to secure sales, but leaving you as the one who must deliver on the contract. An agency agreement may be appropriate if what you are selling is high-value, bespoke, particularly complex or, in the case of a service, will be delivered by you personally.

Under a distribution agreement, the distributor effectively becomes your client, agreeing to buy your products for onwards sale to their own customers and with the expectation that you will play no part in the resultant contract. A distribution agreement may be appropriate if what you are selling is low-value, standardised, relatively straightforward and with no personal service element.

There are advantages and disadvantages to both types of agreement and it will be necessary for you to weigh these up to decide which one would work best for you. Myers & Co can help you decide which agreement works best for you, including advice on:

• agency agreements;
• distribution agreements;
• appointing a commercial agent;
• terminating a distribution agreement; and
• terminating an agency agreement.

Click here to take a look at our commercial agents factsheet.

The commercial law team at Myers & Co Solicitors in Stoke-on-Trent, Staffordshire, has a well-earned reputation for providing a first-class service to businesses and in dealing with complex commercial arrangements in a practical, effective and efficient manner.  For further advice, contact us on 01782 577000.