Agency Agreements
The agent is an independent entrepreneur who charges a commission for finding new contracts. He is only entitled to commission for successfully concluded contracts. The conduct of agents is regulated to an extent by a series of EU directives; this means that the legal position of agents is similar in most European countries.
The most important terms that need to be laid down within the agreement are:
- The agent's scope of duties
- The agent's area of speciality
- Sole or exclusive agency
- Agent’s responsibility for customers' non-payment of goods
- Duration of the contract
- Non-competition clause
One of the terms that do not need to be agreed upon is the indemnity payment on termination of the contract, which by European law is automatically implied into an agency agreement and therefore cannot be restricted or excluded by the contracting parties.
Most problems arise from the prohibition of competition. That is why the agreement should clarify if the agent is allowed to work for other firms. It also is important to stipulate whether the agent is entitled to other payments apart from his commission, e.g. reimbursement of expenses.
Some aspects still leave room for negotiation and these should be carefully considered.
Fees
Agency agreements can be drafted relatively quickly, if necessary within two or three days. To keep the costs low it is recommended that you first discuss the main conditions of the collaboration with the agent. Experience shows that the time needed by the lawyer to draft the agreement is about 10 to 15 hours. If the same agreement is to be concluded with several agents then one or two hours for each additional contract need to be added to account for the individual needs of each agent.