AGENCY CHECKLIST INTRODUCTION Agency agreements regulate the relationship between a Principal and its Agent. An Agent is someone who has the power to act on behalf of its Principal for the purpose of concluding a contract between a third party and the Principal. This includes the sale of goods and services. Ultimately the Agent will not be a direct party to the contract between the Principal and the third party and has no liability under it (except in special cases). If the Agent exceeds his authority he may still bind his Principal, but in that event will usually be liable both to its Principal and the third party for doing so. An Agent can be appointed on an “exclusive or a “non-exclusive” basis. If the Agent is appointed on an exclusive basis, the Principal cannot appoint another Agent in the specified territory and cannot make direct sales into the territory without using the Agent or paying the Agent commission on such sales. If the Agent is appointed on a non-exclusive basis, the Principal can appoint other agents in the Agent’s territory or sell directly in the territory. Whether the Agent is exclusive or non-exclusive, minimum sales targets are often included in the agency agreement. AGENCY AGREEMENT 1. 1.1. PARTIES Please provide the names and addresses of the parties (registered office address if one of the parties is a company) stating which of the parties is the Principal and which of the parties is the Agent. 1.2 Please state (if known) whether each of the parties is a limited company, partnership, unincorporated association, an individual or otherwise. 1.3 If one or both of the parties is a company, please provide company numbers (if available). If either of the parties are US companies, please also provide details of the State under which the companies are incorporated. 1.4 In what country/countries will the Agent operate? 2. 2.1 PRODUCT Please give details of the products that are to be offered for sale by the Principal. 2.2 Will the products be published in a catalogue, or can they be listed in the agreement? If they are to be provided in a catalogue, please provide a copy. 2.3 Is it anticipated that the products could change or be subject to any variations or modifications? If so, please provide details if possible. 3. 3.1 APPOINTMENTS AND EXCLUSIVITY What is the Agent’s territory? 3.2 Is the Agent exclusive or non-exclusive? 3.3 If the Agent is exclusive the Principal cannot make direct sales into the territory unless the Agent is paid its usual commission on those sales. However, the Principal can nominate customers to whom it can supply in the territory without paying commission to the Agent. If you wish to do this please provide details of the nominated customers and whether the Agent can approach these customers. 3.4 Will there be a prohibition on the Agent manufacturing, distributing or representing goods for sale, which compete with the products in the territory? 4. 4.1 AUTHORITY Will the authority of the Agent be limited to soliciting orders? Or will the Agent have authority to do any or all of the following? If so, please provide details. negotiate terms: sign contracts: commit the Principal to other contractual obligations: receive monies payable by the Principal, and if so what will the Agent be obliged to do with such monies? any others? 5. 5.1 ASSIGNMENT Is it intended that the Principal can assign its rights and obligations under the contract? If so, is this only to be with the prior written consent of the Agent? 5.2 Is it intended that the Agent can assign its rights and obligations under the contract? If so, is this only to be with the prior written consent of the Principal? 6. 6.1 DURATION When is the agreement intended to commence (date of agreement)? 6.2 Is the agreement to be for a fixed term to be for an initial fixed term and thereafter to run on until it is terminated by notice from either party or to be run indefinitely from commencement until either party terminates on notice? 6.3 If the agreement is to be for a fixed term, or an initial fixed term, please state the length of the term, or alternatively, the event upon which the fixed term will expire. 7. 7.1 TERMINATION Will either of the parties be able to terminate the agreement at their sole discretion? If so, is this at any point during the term, or only after a specific amount of time?
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