Agency: Cross-border overview, Practical Law UK Practice Note Overview… [626130]

Agency: Cross-border overview, Practical Law UK Practice Note Overview…
© 2019 Thomson Reuters. All rights reserved. 1Agency: Cross-border overview
by Practical Law Global
Practice note: overview | Maintained | Australia, Canada, China, France, Germany, India, Indonesia, International,
Italy, New Zealand, Singapore, South Africa, Turkey, United Arab Emirates, United Kingdom
Scope of this note
Definition and authority
Appointing an agent
Regulation and formalities
EU regulation
Brexit and commercial agency agreements
US regulation
Competition law
EU competition law
US anti-trust law
Non-compete clauses
Employment issues
Tax
Duties of the agent
Duties of principal
Remuneration
Commission on orders during the agency agreement
Commission after termination of the agency agreement
Forfeiture of the right to commission
Secret commissions
Duration
Rights of ownership
Termination
"Indemnity" under the Directive
Compensation under the Directive
Time bar
The agency agreement

Agency: Cross-border overview, Practical Law UK Practice Note Overview…
© 2019 Thomson Reuters. All rights reserved. 2Del credere guarantees
Product Liability
Anti-bribery and corruption
Anti-slavery and human trafficking
Data protection
Glossary terms
Block exemption
European Economic Area
An overview of the key issues to consider when entering into an agency arrangement and drafting and negotiating an agency
agreement.
Jurisdiction-specific information for Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, New Zealand,
Russian Federation, Singapore, South Africa, Turkey, United Arab Emirates and the United Kingdom (updated periodically)
can be included by using the drop down menu or accessed via the related content links.
Scope of this note
This note considers the law relating to commercial agents in an international context, in particular, the regulations
and formalities applicable to agency agreements, in various jurisdictions, and an overview of competition law,
employment law, product liability and tax issues.
The term agent is often used indiscriminately to refer to anyone acting under the instructions of another. This note,
however, focuses on the common terms and termination provisions in what are often referred to as "commercial"
agency agreements, that is, where an agent acts as an intermediary in the making of a contract between the principal
and the principal's customer, with authority to either conclude the contract between the principal and the principal's
customer, or just to introduce the customer to the principal.
The aim of this note is not to provide a definitive statement of the law in any particular jurisdiction, but rather to
give an idea of the issues which are encountered in cross-border agency appointments, so as to assist in identifying
the issues on which advice from local counsel should be obtained.
Definition and authority
The essence of the type of commercial agency agreement discussed in this note is that:
• An agent is appointed, almost always on a commission basis, to sell or promote the sale of goods on behalf of
a manufacturer or supplier (the principal).

Agency: Cross-border overview, Practical Law UK Practice Note Overview…
© 2019 Thomson Reuters. All rights reserved. 3• The agent contracts on behalf of its principal and, where the agent has necessary authority, a direct
contract is created between the principal and the customer (but not between the agent and the customer).
Alternatively, the agent may have authority only to introduce a customer to the principal, in return for which,
it receives a commission.
• The agent does not buy goods for trading on its own account, in other words, it is not a reseller, and as such
can be distinguished from the most common type of reseller, the distributor.
Agency can clearly be distinguished from, and may be preferable to, a distributor arrangement in a number of
situations, although agency does have certain drawbacks (see box: Appointing an agent ).
In the EEA, the Commercial Agents Directive 86/653/EEC (the Directive) defines a commercial agent as a self-
employed intermediary who has continuing authority to negotiate the sale or the purchase of goods on behalf of
another person (the principal), or to negotiate and conclude such transactions on behalf of and in the name of that
principal. There is no definition of "negotiate" in the Directive, but it would be safer to assume that courts would
construe its meaning widely. There is also no definition of "goods" in the Directive (for more on the interpretation
of the definition of "goods" under the Commercial Agents (Council Directive) Regulations 1993 (SI 1993/3053),
which implement the Directive in the UK, see Practice note: overview, Commercial agents: "Goods" ).
In the US, the definition of agency for most purposes is established by common law at state level, and reflects a
similar position, that is, of one person acting as representative of another.
There are, however, differences between US and European laws:
• US state legislation covers only agencies for the sale of products to wholesale customers, that is, not to end
users.
• While sales promotion agencies are very common in Europe, US commercial agents are given less
comprehensive authority than other agents in Europe, usually being authorised only to solicit orders from
prospective customers. Such orders will be subject to acceptance or rejection by the supplier, and, generally,
the agent will be prohibited from entering into any contractual commitment on behalf of its principal.
• US law does not recognize the concept of a del credere agency; an agent that assumes financial responsibility
for the orders it solicits will probably be treated as a distributor under US law.
The question of authority is essential in the appointment of an agent. An agent's power to affect the legal position
of its principal rests on its authority, which can be actual or apparent.
• Actual authority, that is, a legal relationship between the principal and agent created by a consensual
agreement to which they alone are parties.
• Apparent (or ostensible) authority that is, the authority of an agent as it appears to others.
Generally, the principal is bound by (and entitled to the benefit of) the contract made by its agent on its behalf and
within the scope of the agent's actual authority. Any action arising out of the agent's express authority to act on
behalf of the principal is construed as an action by the principal itself. Further, where the principal, by words or
conduct, represents to a third party that another has authority to act on its behalf, that principal may be bound by
the acts of that other person as if it has in fact authorised them.
Where the agent acts outside the scope of its authority, the principal will not be bound by those acts unless it later
ratifies them.

Agency: Cross-border overview, Practical Law UK Practice Note Overview…
© 2019 Thomson Reuters. All rights reserved. 4The agent will have no liabilities under the contract between its principal and the customer when the agent discloses
the fact that it is acting on behalf of a principal and acts within the scope of its authority.
As an exception to this, it is worth noting the existence of del credere agents. A del credere agent undertakes
to indemnify its principal if the customers it finds fails to pay the principal under the contracts which the agent
concludes on behalf of the principal. Del credere agencies are less common these days, probably because there are
simpler ways of obtaining credit protection.
In the UK, where an agent fails to disclose the fact that it is acting as agent for a principal, it will be liable to the
customer, who (if it has a legal claim) can choose to sue either the agent or the principal if it becomes aware of the
existence of the agency.
France, Italy and Germany have developed the concept of the commissionaire. The relationship between a
commissionaire and the principal is similar to that between an agent and an undisclosed principal. A commissionaire
acts in its own name for the account of the principal. The principal is contractually bound to the commissionaire
to deliver (through the commissionaire) the products sold to the customer and the commissionaire is bound to the
principal to remit the price received from the customer. No relationship is created between the principal and the
customer, so the customer does not have any claim against the principal, nor can the principal sue the customer
for the price.
Where the sale of goods and services are concerned, there are two types of agent. Note that the Directive only applies
where goods are concerned:
• A sales agent, who will be authorised in the agreement to promote, market, negotiate and enter into
contracts on the principal's behalf, usually on such terms and conditions as the principal stipulates. The
principal should retain the right to decide whether or not to do business with a particular customer,
reserving the right to decline any order, for any reason.
• A marketing agent, who is authorised to promote and market the principal's products and solicit orders for
the principal, and has authority only to transmit any requests for quotations or orders to the principal. The
agent does not have the authority to enter into a contract of sale on behalf of the principal.
Appointing an agent
Advantages:
Disadvantages:

• The principal under an agency agreement
can retain control over the agent's marketing
operations and its resale pricing policy.
• The principal can restrict the agent's freedom to
choose the customers that the agent will deal
with.
• Agency agreements are treated more leniently
than distribution agreements under EU
competition law.• The legal, financial and commercial risks of
operating in the market remain with the principal.
• A commercial agent to whom the Directive
applies has a right to compensation or indemnity
upon termination of the agreement.
• Sometimes a principal can be regarded as
trading in a territory if it has an agent there,
creating exposure to potential tax liabilities,

Agency: Cross-border overview, Practical Law UK Practice Note Overview…
© 2019 Thomson Reuters. All rights reserved. 5• At the end of the agency arrangement, the
principal will be able to take advantage of the
customer contacts developed by the agent.
• Agency is ideal for the situation where direct
contact between manufacturer and customer is
important (for example, because of a specialised
after-sales service which can only be provided
effectively by the manufacturer or principal of
the product, or where the contract is so big that
the customer requires the re-assurance of direct
contractual relations with the manufacturer).
• Typically the commission paid to an agent is
lower than the margin which a distributor will earn
(but see Termination below ).whereas the appointment of a distributor should
not give rise to this problem.
Regulation and formalities
In contrast with distributorships, agency arrangements are the subject of special regulation and formalities exist
for registration in most countries. But in a number of jurisdictions, for example, in the countries of the Gulf Co-
operation Council, the protection offered to local distributors is the same as that offered to agents.
In the UK, France, Italy and Germany, such regulation originates from the Directive.
EU regulation
When considering the appointment of an agent whose activities are to be carried out anywhere in the European
Economic Area (EEA) ( see Glossary terms ) it is first necessary to determine whether the agency agreement will
be covered by the Commercial Agents Directive 86/653/EEC .
The Directive deals with:
• Mandatory rights and obligations of principals and agents.
• Remuneration of the agent.
• Termination of the agency agreement.
• Payment of compensation to the agent.
• Post-termination non-competition clauses.
The Directive is modelled upon French and German legislation, which has traditionally granted greater levels of
protection to agents than previously in the UK. Its application may affect the decision whether or not to use an agent,
and indeed whether to use a self-employed as opposed to an employed sales force.
The Directive applies to commercial agents whenever such an agent performs any part of its duties anywhere in
the EU. By virtue of the EEA Agreement of 1 June 1994 the Directive has also been extended to apply to Norway,
Iceland and Liechtenstein.

Agency: Cross-border overview, Practical Law UK Practice Note Overview…
© 2019 Thomson Reuters. All rights reserved. 6The Directive does not apply to agency agreements:
• For the supply of services. Nevertheless, the scope of the French implementing legislation was extended to
include services.
• With undisclosed principals. In such cases the agent is clearly not negotiating and concluding transactions in
the name of the principal.
In addition, the Directive specifically does not apply to ( Article 2(1) ):
• A commercial agent who is unpaid.
• Commercial agents operating on commodity exchanges or in commodity markets, as to which, see Legal
update: High Court considers exemption from the Commercial Agency Regulations , discussing W Nagel
(A Firm) v Pluczenik Diamond Co NV [2017] EWHC 1750 (Comm), 13 July 2017 , other aspects of which are
reported at W Nagel (A Firm) v Pluczenik Diamond Co NV [2017] EWHC 2104 (Comm), 11 August 2017 .
• Intermediaries whose commercial agency activities can be considered as secondary (see below).
• In the UK, the Crown Agents for Overseas Governments and Administrations, and its subsidiaries.
Certain classes of people are excluded from the definition of commercial agent ( Article 1(3) ):
• Officers of companies or associations.
• Partners.
• A receiver, a receiver and manager, a liquidator or a trustee in bankruptcy.
The Directive allows EU member states to provide that their implementing legislation does not apply to agents whose
activities, under national law, are secondary ( Article 2(2) ). While neither the UK nor Italy recognised the concept
of a secondary agent, they chose to deal with it in different ways. Italian law does not exclude secondary agents
and it is now accepted as a concept in case law and by legal commentators. In the UK, commercial agents whose
agency activities are secondary have been excluded, but the definition of what constitutes a secondary agent has
been criticised as being unnecessarily complicated.
In Germany, the law excludes part-time agents, but does not define them; whether an agent is part-time being a
question of fact to be decided in each case. In France, the term secondary agent is not used, but where parties enter
into an agreement where the main purpose is something other than agency and provide for an agency relationship
as a subsidiary activity, the parties may exclude the operation of the Directive to this subsidiary activity.
The Directive will apply in addition to national laws containing any special collective bargaining agreements to
agency (for example, in Italy) or common law obligations (for example, in the UK).
Brexit and commercial agency agreements
On 23 June 2016, the UK voted to leave the EU, and on 29 March 2017, the UK government gave formal notice of
the UK's intention to leave the EU under Article 50(2) of the Treaty on the European Union.

Agency: Cross-border overview, Practical Law UK Practice Note Overview…
© 2019 Thomson Reuters. All rights reserved. 7The UK will leave the EU, and will no longer be an EU member state, on exit day unless one of the following events
occurs before then:
• The European Council, in agreement with the UK, unanimously decides to extend the two-year Article 50
period.
• A withdrawal agreement is concluded with a different commencement date.
• The UK revokes the Article 50 notice.
For more information, see Practice note, Brexit: Article 50 and the withdrawal process: Article 50 timeframe for
negotiations and exit.
For an overview of the consequences of the UK and the EU concluding a withdrawal agreement by exit day , see
Article, Brexit essentials: Q&As on agreements, timeframes and no deal: What happens if there is a deal? In relation
to a potential transition period, see also Practice note, Brexit: transitional arrangements .
For an overview of the consequences of UK and the EU failing to conclude a withdrawal agreement, see Article,
Brexit essentials: Q&As on agreements, timeframes and no deal: What happens if there is no deal?
For more information on Brexit in the context of commercial agency agreements within the EU and governed by UK
laws, see Practice note, Brexit: implications for commercial law , in particular the section on Agency , and Article,
Brexit and commercial contracts: assessing the impact . For a discussion of the key issues to consider when drafting
contracts which may be affected by Brexit, and examples of long and short form Brexit clauses, see Practice note,
Drafting for Brexit: Brexit clauses .
We are monitoring the progress of Brexit and will update our materials to reflect new developments as and when
appropriate. All Brexit materials can be found on the Brexit page .
US regulation
US regulation of agency relationships is almost exclusively at state level, and does not generally impose registration
requirements. Instead, state legislation on commissioned agency is primarily designed to ensure that principals pay
agents the commissions owed in a timely manner. Failure to do so generally exposes the principal to liability for a
multiple (two-to-four times) of the unpaid commissions and for reimbursement of the attorneys' fees incurred by
the agent in collecting the commissions.
The laws in some states do impose a requirement that agency agreements be put in writing, that those agreements
contain certain information (essentially, whatever is needed to calculate commissions earned), and that certain
other formalities be observed. A very few impose substantive requirements, such as a minimum notice period for
termination and payment of commissions on certain post-term shipments.
Competition law
An agent will typically accept restrictions on the customers that it may sell to, the territory in which it may sell, the
prices and terms under which it may sell and its ability to deal in competing products.

Agency: Cross-border overview, Practical Law UK Practice Note Overview…
© 2019 Thomson Reuters. All rights reserved. 8These restrictions give rise to competition law issues when found in a distribution agreement. However, a true agency
agreement should not generally give rise to competition law concerns.
EU competition law
It is worth noting that an agency agreement may be caught by relevant national competition rules, whether as an
alternative or in addition to EU competition rules.
Article 101
Article 101(1) of the Treaty on the Functioning of the European Union (TFEU) prohibits arrangements which may:
• Affect trade between EU member states; and
• Which have as their object or effect the prevention, restriction or distortion of competition within the EU.
Article 101 only applies to an agreement between two or more independent undertakings. It will therefore not apply
to an agency agreement if the principal and agent are so closely integrated that they are to be regarded as part of
the same economic unit.
A genuine agency agreement, falling outside Article 101(1), exists if the agent bears no, or only insignificant, financial
or commercial risks in relation to the contracts concluded and/or negotiated on behalf of the principal.
Three types of financial or commercial risks are relevant:
• Those which are directly related to the contracts negotiated or concluded by the agent on behalf of the
principal, for example, financing of stocks.
• Those which relate to investments specifically required for the type of activity for which the agent has been
appointed by the principal.
• Those which relate to other activities undertaken in the same product market, to the extent that the principal
requires the agent to undertake such activities, but not as an agent on behalf of the principal but for its own
risk.
Where an agent bears such financial or commercial risks that it is to be regarded as an independent dealer, Article
101(1) will apply. This is so in the case of a commissionaire appointed under French, German and Italian laws.
The question of risk is assessed on a case-by-case basis. Article 101(1) will generally not apply to sales or purchases
made on behalf of a principal, if property in the goods sold or bought does not vest in the agent or the agent does
not act on its own account, and the agent does not undertake any of the following activities:
• Contribution to the costs relating to the agency or purchase of the contract goods or services, including
transport costs.
• Investment in any sales promotions.
• Maintenance or risk of stocks of the contract goods, at the agent's own cost.

Agency: Cross-border overview, Practical Law UK Practice Note Overview…
© 2019 Thomson Reuters. All rights reserved. 9• Investment in equipment, premises or training of personnel.
• Acceptance of liability to third parties for harm caused by the products sold.
• Acceptance of liability for the customers' non-performance of the contract (except for the loss of the agent's
commission), unless the agent is liable.
(Vertical restraints guidelines (OJ 2010 C130/1) paragraphs 16 & 17. )
As stated, if an agency agreement is considered genuine, all obligations imposed on the agent in relation to the
contracts concluded and/or negotiated on behalf of the principal fall outside Article 101(1).
Limitations or restrictions in a genuine agency agreement will then be permitted on:
• The territory in which the agent may sell those goods or services.
• The customers that the agent may sell to.
• The price and conditions at which the agent must sell or purchase goods or services on behalf of the
principal.
Similarly, provisions that grant the agent an exclusive territory or impose minimum sales targets are not considered
anti-competitive.
It should be noted, however, that even in a genuine agency relationship non-compete provisions, including post-
term non-competes, may infringe Article 101(1) (see Non-compete clauses , below ).
An agreement that is caught by Article 101(1) may nonetheless be exempted if, broadly, the benefits to which it gives
rise outweigh its anti-competitive effects.
An agency agreement is a typical example of a vertical agreement, that is, an agreement between undertakings that
operate at different levels of the supply chain. Agency agreements may be covered by the vertical agreements block
exemption ( Regulation 330/2010 ) which provides for automatic exemption from Article 101(1) unless:
• The market share of either party is above 30%; or
• The agreement contains one of the limited number of "hardcore" restrictions.
For further information on the vertical agreements block exemption see Practice Note, EU Vertical agreements
and for further information on the "hardcore" restrictions see Practice Note, EU Vertical agreements: Hardcore
restrictions .
Restrictions which are unlikely to be exempted include:
• A restriction on the agent's ability to respond to unsolicited orders from customers outside the exclusive
territory.
• A prohibition on the agent splitting its commission with customers.
• An over-lengthy restrictive covenant (see Non-compete clauses ).

Agency: Cross-border overview, Practical Law UK Practice Note Overview…
© 2019 Thomson Reuters. All rights reserved. 10Furthermore, an agency agreement may fall foul of Article 101 if it facilitates collusion, for example, where a number
of principals use the same agents while excluding others from using them, or when they use the agents to collaborate
on marketing strategies or as a means of exchanging confidential market information between principals.
Where the vertical agreements block exemption does not apply to the agreement, it may still qualify for automatic
exemption under Article 101(3) of the TFEU if the following criteria are satisfied:
• The agreement must bring efficiency benefits by improving the production or distribution of goods, or
promoting technical or economic progress.
• The agreement must allow consumers a fair share of the resulting benefits.
• The agreement only imposes restrictions which are indispensable to the achievement of those objectives (this
condition plays a role in ensuring that the least anti-competitive restraint is chosen to obtain the benefits).
• The agreement must not allow the parties the possibility of eliminating competition in respect of a
substantial part of the products in question.
Article 102
Even where the agent and the principal are so closely integrated as to be treated as falling outside the scope of
Article 101(1), the operation of an agency agreement may still raise competition issues. The possible application of
Article 102 of the TFEU (under which no exemptions are available) should be considered if a supplier or agent has
a dominant position in the relevant market.
Article 102 prohibits the abuse of a dominant position within the common market, or a substantial part of it, if the
abuse affects trade between EU member states.
Thus, a principal that is in a dominant position may be treated as responsible for any behaviour by its agents which
amounts to abusive behaviour within the meaning of Article 102. Further, where a principal enjoys a dominant
position in a relevant market it needs to ensure that it does not operate agreements with its agents which amount
to an abuse of that position.
For more information on the application of EU competition rules to agency agreements see Flowchart guides:
Specific observations on agency agreements .
US anti-trust law
US anti-trust law similarly has little bearing on true agency relationships. When a US agent assumes financial
responsibility for the payment for the supplier's goods, the relationship will not be considered a true agency.
In such situations, the agreement will be subject to the antitrust principles that apply to distributorships (see Practice
note, Distributorships: Competition law ). However, it is important to note that if agents are used (or so conduct
themselves) as conduits between competing suppliers, parallel activities of the suppliers may be considered illegal
collusion.

Agency: Cross-border overview, Practical Law UK Practice Note Overview…
© 2019 Thomson Reuters. All rights reserved. 11Non-compete clauses
Under EU competition law, in order to fall within the scope of the vertical agreements block exemption, a non-
compete obligation during the life of the agency agreement, must be limited to five years' duration.
A post-termination restriction in the EU will take an agreement outside the scope of the block exemption, unless
such restriction:
• Relates to goods or services which compete with the contract goods or services.
• Is limited to the premises and land from which the agent has operated during the contract period.
• Is indispensable to protect know-how transferred by the supplier to the agent.
• Is limited to one year following termination.
The maximum period allowed for a post-termination restriction of the business activities of a commercial agent
under the Directive ( Article 20 ) is two years in any event, and national law restraint of trade principles will be
applicable to the extent that they are stricter.
In certain jurisdictions, such as Germany, an agent that accepts post-termination non-compete restrictions is
entitled to reasonable compensation.
Further, under the terms of the Directive, a restraint of trade clause must, in order to be valid, be concluded in
writing, and relate to the geographical area, the group of customers and the goods entrusted to the commercial agent.
In the US, restrictions during the term of the relationship are commonly found, and are considered to be enforceable,
regardless of their length.
Post termination restrictions in the US are more likely to be subject to challenge. One state, California, will not
enforce any such restriction. In other states, they must be reasonable in geographic and temporal scope to be
enforceable. If they are not, some states will enforce them to the extent that doing so would fall within the bounds
of geographic and temporal reasonableness, but other states will declare void any over-broad non-competition
agreement.
Employment issues
Depending on the nature of the relationship between the principal and agent, there is a risk that the agent may be
treated as an employee of the principal, with all the employer obligations and employee rights that this will bring.
For example, in Italy, if an agent is paid a standard salary, works for a fixed number of hours at the principal's
premises and/or has all its expenses reimbursed, it may be considered an employee and so have the right to claim
the minimum salary and social security contributions granted to employees by Italian laws and regulations.
In Germany, the risk that a natural person may be regarded as a "pretended" independent trader must be carefully
considered.

Agency: Cross-border overview, Practical Law UK Practice Note Overview…
© 2019 Thomson Reuters. All rights reserved. 12In the US, the tests for determining whether a relationship which appears to be characterised as being one between
independent contractors should actually be viewed as one between employer and employee varies somewhat by the
jurisdiction involved (federal or one of the states) and the purpose for which the determination is to be made (for
example, responsibility for tax withholding or payment of employment taxes). It is generally considered, however,
that if a commissioned agent is an individual and handles only one principal's products, that agent will be treated
as the principal's employee for most purposes.
Tax
Under the internal taxation rules of most countries, a foreign company with a local permanent establishment is
subject to local taxation on the profit that it derives from that permanent establishment.
An agent that does not act independently and that habitually exercises authority to enter into binding contracts in
the name of a principal is at risk of being considered a permanent establishment of that principal. The nature of
most agency agreements is exactly that, meaning that the principal will be regarded as carrying on trade or business
in the territory of the agent, thereby incurring liability for local taxation.
In contrast, where a commissionaire is appointed under French, German or Italian law there is a low permanent
establishment risk. As stated above, a commissionaire is an independent agent that acts in its own name for the
account of its principal. Such an arrangement may enable the principal to export products to a high tax country,
while maintaining the majority of its liability to tax within a country with a tax-friendly regime.
In 2013 the Organisation for Economic Co-operation and Development (OECD) commenced work on its Base
Erosion and Profit Shifting (BEPS) project. As part of this, the OECD reviewed the artificial avoidance of permanent
establishment status, including through the use of commissionaire arrangements and other similar strategies. In
October 2015, the OECD published a final set of recommendations, including amending Article 5 of the OECD's
Model double tax treaty so that a permanent establishment will exist for these purposes if a person “habitually
concludes contracts, or plays the principal role leading to the conclusion of contracts that are routinely concluded
without material modification by the enterprise”. To track progress of BEPS, see BEPS tracker .
If the agent does constitute a permanent establishment of the principal in the country in which the agent is carrying
out its duties, double tax treaties, where they exist, may protect the foreign principal from double taxation. Where the
principal is established in a country with a good treaty network, it will be in a better position to take advantage of this.
Whether remittances, made by an agent that is not considered to have created a permanent establishment on behalf
of its foreign principal, are subject to withholding tax or any other tax differs from jurisdiction to jurisdiction.
In both Europe and the US, generally there are no foreign exchange restrictions, but there are reporting obligations
in Germany.

Agency: Cross-border overview, Practical Law UK Practice Note Overview…
© 2019 Thomson Reuters. All rights reserved. 13Duties of the agent
Where an agent operates in the EU/EEA and the Directive applies, the agent is under an obligation to look after its
principal's interests and act dutifully and in good faith. In particular, the agent must:
• Make proper efforts to negotiate and, where appropriate, conclude the transactions, as instructed.
• Communicate to the principal all the necessary information available to the agent.
• Comply with reasonable instructions given by the principal.
(Article 3. )
These duties are mandatory and may not be contracted out ( Article 5 ). It is of course always possible in a contract with
an agent to include obligations which go further than a general duty of good faith. A well-drafted agency agreement
will specify in detail the obligations of the agent.
Where the Directive does not apply, national laws will in any case impose similar obligations.
The duties of US commercial agents are primarily the subject of state common law and are subject to variation by
agreement of the parties. The agent should:
• Provide the principal with information relevant to the marketing of the principal's products.
• Account for and remit collections for the principal's account.
• Avoid conduct which will bring disrepute to the principal or its products.
• Not act outside of its express and implied authority.
• Obey lawful instructions.
• Not act for an adverse party to a transaction with the principal, without the principal's knowledge.
• Not compete with the principal with respect to the business in which the agent acts as such.
• Not act as an agent for competitors of the principal, without the principal's consent.
• Maintain the confidentiality of, and not to misuse, the principal's confidential information.
In the performance of its responsibilities, the agent is subject to a general duty of good faith; but that duty generally
will not override the specific terms of an agreement between the parties.
The obligations to act in good faith and to follow all reasonable lawful instructions of the principal, as implied under
national laws, will usually be set out expressly in the agency contract.
Other specific duties commonly imposed upon an agent in an agency agreement for the sale of products include
obligations to:
• Promote and sell the products.
• Maintain a dedicated sales team.
• Maintain appropriate, secure storage for the products, where the products pass through the hands of the
agent.

Agency: Cross-border overview, Practical Law UK Practice Note Overview…
© 2019 Thomson Reuters. All rights reserved. 14• Obtain all necessary consents and licences for the products in the territory.
• Comply with, and notify the principal of all applicable local laws and changes to them, and grant an
indemnity in favour of the principal in respect of the consequences of the agent's breach.
• Not sell competing goods (see Competition law ).
• Maintain an up-to-date customer list.
• Not incur any liability for or make representations or give any warranty on behalf of the principal, except as
authorised.
• Make clear to persons that it deals with and in advertising material that it is acting as agent for the principal.
• Sell only at the price notified by the principal and on the principal's standard terms and conditions, unless it
obtains the principal's specific approval to do otherwise.
• Obtain the principal's approval of promotional activities and advertising.
• Not make secret profits.
• Keep the principal informed of possible intellectual property infringements.
• Advise the principal promptly of any enquiries and orders for the products, complaints or after-sales
enquiries.
• Allow the principal to inspect the agent's books.
• Not assign or sub contract the agency.
• Agree that goodwill in trade marks resulting from use by the agent is for the benefit of the principal.
Duties of principal
Where an agent's activities fall within the scope of the Directive, a principal must act dutifully and in good faith in
relations with its agent.
The principal must, in particular:
• Provide its commercial agent with the necessary documentation relating to the goods concerned.
• Obtain the information necessary, for its commercial agent, for the performance of the agency contract, and,
in particular, notify the commercial agent within a reasonable period once it anticipates that the volume of
commercial transactions will be significantly lower than that which the commercial agent could normally
have expected.
• Inform the commercial agent within a reasonable period of its acceptance, refusal, and/or of any non-
execution of a commercial transaction which the commercial agent has procured for the principal.
(Article 4. )
These duties cannot be contracted out ( Article 5 ).
Where the Directive does not apply, national laws will in many cases impose similar obligations, although UK law
does not generally impose wide-ranging duties on principals.

Agency: Cross-border overview, Practical Law UK Practice Note Overview…
© 2019 Thomson Reuters. All rights reserved. 15In most US states, common law is supplemented by statutory requirements imposed on principals. Those
requirements vary between states and it is unlikely that they may be varied materially by contract. The following
points are noted:
• In most states, principals must promptly pay the terminated agents the commissions that are owed to the
agents, at the risk of suffering severe (multiple-damage) penalties.
• Failure to pay commissions in a timely manner during the term of the relationship incurs a penalty in some
states.
• A few states may require that commissions be paid on transactions in the pipeline at the time the
relationship ends.
• Several states require that the principal makes the arrangement with its agent in writing and that the
agreement includes certain information (principally, the basis of commission calculation).
• Several states require that agents be provided with, and in some cases sign, receipts for copies of their agency
agreements.
US common law requires that the principal indemnify the agent against liabilities to third parties arising out of the
performance of the agent's responsibilities (presumably including products liability claims). In the absence of an
applicable state statute, the only other significant obligation of the principal is to perform its express contractual
commitments.
In addition to obligations imposed on principals by national law of all jurisdictions, specific duties commonly agreed
in an agency contract include obligations to:
• Pay commission.
• Supply the agent with promotional literature, samples, price lists and other necessary information.
• Provide training and after-sales services for users, if appropriate.
• Reimburse expenses incurred by the agent, if this has been agreed.
• Make appropriate checks on the products and maintain appropriate product liability insurance.
• Perform the contracts with third parties.
• Indemnify the agent against claims brought in relation to breaches by the principal or intellectual property
claims relating to the agent's use of the principal's intellectual property.
Remuneration
The level of remuneration, or commission, to be paid to an agent is a subject for negotiation between the parties.
Where the Directive applies, in the absence of any agreement or any compulsory provisions of national law, an agent
is entitled to remuneration in accordance with customary practice or, where there is no customary level, that which
is reasonable taking into account all the aspects of the transaction ( Article 6 ).

Agency: Cross-border overview, Practical Law UK Practice Note Overview…
© 2019 Thomson Reuters. All rights reserved. 16Commission on orders during the agency agreement
Under Article 7(1) of the Directive, a commercial agent is entitled to commission on transactions concluded during
the period covered by the agency contract where the transaction has been concluded:
• As a result of its action; or
• With customers that it has previously acquired for transactions of the same kind.
This applies regardless of whether the agent's appointment is on an exclusive or non-exclusive basis.
As a consequence of the Directive, where a principal appoints an agent on a non-exclusive basis, it may be liable to
pay commission twice on the same transaction; once to the agent that first acquired the customer for the principal,
and again to the agent (if different) that actually concludes the transaction with the customer. There is no provision
in the Directive for set-off in this situation.
Additionally, under Article 7(2) of the Directive, member states had the choice of specifying a right to commission
on either transactions with customers belonging to a specific area or group with which:
• The agent has been entrusted; or
• The agent has exclusivity.
France and Germany opted for the first of the two alternatives. The UK opted for the latter alternative.
Italy implemented neither alternative, simply stating that, unless the parties expressly agree otherwise, the agent
is entitled to commission on transactions directly entered into by the principal in the area entrusted to the agent
(whether on an exclusive or non-exclusive basis). Additionally, under general Italian law, if a grant is made on
an exclusive basis, the agent is entitled to commission on business transacted by the principal either directly or
indirectly through third parties, unless the parties expressly provide otherwise.
Where Article 7 applies, an agent may therefore have a right to commission even if it has never heard of a particular
customer, provided the customer belongs to a territory or group of customers to which the agent has a right under
the agency agreement.
Most principals would probably not grant an agent such extensive rights to commission as are included in the
Directive and so may wish to exclude its operation. However, it is not clear whether the application of Article 7(2)
is mandatory. Unlike other articles, there is no specific statement that it cannot be contracted out, and so the
effectiveness of excluding its operation is uncertain.
Even if Article 7 was ultimately held to be mandatory, the agent's right to commission may be overcome or reduced
by:
• A term denying the agent an exclusive right to any specific area or group of customers in the first place
(though the possible double commission problem could still arise).
• A term excluding those customers of the principal that the principal wishes to deal with directly from the
agent's group of exclusive customers in an area. Such customers are often referred to as "house accounts".
• A term providing for commission at a lower rate than the commission on contracts set up by the agent.
However, an attempt by the principal to vary the agency agreement mid-term to this effect will be risky.

Agency: Cross-border overview, Practical Law UK Practice Note Overview…
© 2019 Thomson Reuters. All rights reserved. 17Where the Directive does not apply, the parties are free to negotiate appropriate rights to commission, subject to
any relevant provisions of national law.
Commission after termination of the agency agreement
Where the Directive applies, Article 8 provides that a commercial agent is also entitled to commission on transactions
concluded after the agency contract has terminated if:
• The transaction is mainly attributable to the commercial agent's efforts during the period covered by the
agency contract and if the transaction was entered into within a reasonable period after that contract
terminated; or
• The order of the customer reached the principal or the commercial agent before the agency contract
terminated.
A term that provides for the agent to only receive commission in relation to agreements concluded on or before
termination or the exact period following termination, if applicable, should be expressly stated in the contract to
address the potential exposure for the principal arising from the application of Article 8.
Where the Directive does not apply, the parties can freely negotiate any rights to commission, subject to any relevant
provisions of national law. There is no reason in principle why an agent should be entitled to commission on an
order received after termination of the agreement.
In the US, some state laws specifically mandate that commissioned agents be paid commissions on orders placed
before termination of the agency relationship and shipped thereafter. If no such laws apply, the extent to which
an agent is entitled to commissions after termination is, in the first instance, a matter of contract. However, in the
absence of clear contractual guidance to the contrary, common law generally entitles the agent to commissions on
orders placed before termination, regardless of when shipped, as well as all orders for which it was the soliciting
cause, which is a somewhat fluid criterion.
Forfeiture of the right to commission
Where the Directive applies, the right to commission can be extinguished only if and to the extent that the contract
between the customer and the principal will not be executed and that fact is due to a reason for which the principal
is "not to blame" ( Article 11(1) ). It is not possible to derogate from this provision to the detriment of the agent. The
concept of "not to blame" is one that is not known in many jurisdictions. Clearly a breach of contract by the customer
or insolvency of the customer are not events for which the principal is to blame. Breaches of contract by the principal
may or may not be events for which the principal is to blame, depending on the circumstances.
The ECJ provided some guidance on the concept of "blame" in ERGO Poist'ovňa a.s.v Alžbeta Barlíková (Case C
48/16), 17 May 2017 . Confirming the opinion of the Attorney-General and ruling on various issues relating to the
Directive, the ECJ held in relation to Article 11(1) that the concept of "a reason for which the principal is to blame"
does not relate only to the legal reasons which led directly to the termination of the contract, but covers all the legal
and factual circumstances for which the principal is to blame, which are the cause of non-execution of that contract.

Agency: Cross-border overview, Practical Law UK Practice Note Overview…
© 2019 Thomson Reuters. All rights reserved. 18In circumstances of forfeiture, any commission already paid to the agent on the contract is to be refunded to the
principal ( Article 11(2) ). The Directive is silent as to whether any repayments made can be set off against future
commissions. On general principles, set-off should be available, whether or not there is an express set-off clause in
the agency agreement. Otherwise, recovery of overpaid commission will depend on the circumstances and could be
difficult or impossible to enforce in practice.
Secret commissions
The subject of secret commissions and corrupt gifts is not specifically regulated in the context of agency in France
or Italy, but there are strict rules against the receipt of such payments by an agent in the UK, Germany and the US
(see Anti-bribery and corruption ).
Duration
The duration of the appointment is likely to be one of:
• A fixed term with provision for termination on notice thereafter.
• An indefinite term terminable on notice from the start.
• A fixed term requiring positive extension.
An agency agreement will generally set out the term of the agreement and notice periods.
Where the Directive applies, a fixed-term agreement which continues to be performed by both parties after its expiry,
will be deemed to be converted into an agreement for an indefinite period ( Article 14 ).
Where the Directive applies and an agency agreement is entered into for an indefinite period, either party may
terminate it on notice ( Article 15(1) ).
Minimum notice periods are implied under the Directive ( Article 15(2) ):
• One month for the first year.
• Two months for the second year.
• Three months for the third and subsequent years.
Unless otherwise agreed, the notice must expire at the end of a calendar month ( Article 15(5) ).
Member states are allowed to fix the period of notice at four months for the fourth year of the contract, five months
for the fifth year, six months for the sixth and subsequent years of the contract, and can decide that the parties may
not agree to shorter periods ( Article 15(3) ). This was adopted in Germany and Italy, but not in France or the UK.
Usual US practice is to provide that a commercial agency agreement remains in effect indefinitely (often after an
initial period, sufficient to enable the agent to recover its investment in the agency), until terminated by either
party, at its discretion, on relatively little advance notice (30 days is quite common). Such provisions are generally

Agency: Cross-border overview, Practical Law UK Practice Note Overview…
© 2019 Thomson Reuters. All rights reserved. 19enforceable, except to the extent that the agent has made capital investments in order to perform the contract, at
the insistence or at least with the knowledge of the principal, and has not been given a reasonable opportunity to
recoup those investments.
Rights of ownership
The agreement should state what rights of ownership the principal has over stock or money or other property held
by the agent (if indeed the agent holds any such property), and to what extent it can assert its rights of ownership
against third parties, for example, in the event of insolvency of the agent or if the agent dishonestly disposes of the
principal's goods to third parties.
Termination
An agency agreement will generally set out the term of the agreement, notice periods, events justifying termination
and the consequences of termination.
US law generally leaves the subject of termination and its consequences to the contract between the parties, though
in most states an agent must be given an opportunity to recoup any initial investment in handling the principal's
products, before the agency relationship may be terminated by the principal without default. In the absence of
express agreement, reasonable advance notice of termination is required, 30 days is thought to be adequate.
In Europe, the Directive is stated not to affect any law of a member state which provides for immediate termination
because of failure of one of the parties to the contract to carry out all, or part of its obligations, or where exceptional
circumstances arise ( Article 16 ). Such exceptional circumstances would, for example, include gross negligence
(Germany). It is worth noting that in France, unlike other jurisdictions, insolvency is not a valid reason for automatic
termination of an agreement.
Commercial agents to whom the Directive applies are entitled to either an "indemnity" or compensation upon
termination of the agency agreement. There is no minimum period specified in the Directive that must have elapsed
under the agency agreement before the agent's rights to compensation or indemnity arise, and there is no express
exclusion for a trial or probationary period, as confirmed by the ECJ (see Legal update: case report, ECJ confirms
commercial agents entitled to indemnity or compensation even where termination occurs during a contractual
trial period ).
The idea underlying both indemnity and compensation is that the agent has contributed to developing the goodwill
of the principal's business, such that in broad terms the goodwill is jointly owned by the principal and agent. So, in
effect, when the agency relationship is terminated, the principal should buy out the agent's interest in that goodwill.
The remedies of indemnity and compensation were based on German and French law respectively. In all EU
countries, other than the UK, the Directive was taken as meaning that the member state was to make a choice in
its implementing legislation between indemnity or compensation. The indemnity model operates in Germany and
Italy. France retained its compensation system.

Agency: Cross-border overview, Practical Law UK Practice Note Overview…
© 2019 Thomson Reuters. All rights reserved. 20In the UK, both alternatives were implemented, allowing for the parties to decide, but on the basis that, in the absence
of agreement on the point, the agent would be entitled to compensation rather than indemnity. In countries where
both alternatives could apply, the agency agreement should specify which one.
Where the Directive applies, an agent's right to compensation or indemnity may also arise:
• On expiry of a fixed term and the agency agreement is not renewed. Even if the principal offers a new
contract, regardless of the terms offered, the agent will still be entitled to compensation or indemnity.
• Where the agent retires at an age where it cannot reasonably be required to continue the activities.
• Where the principal terminates because of the agent's illness and it cannot be expected to continue the
activities.
• Where the agent dies, its estate will have the right to compensation or indemnity.
• On termination by the principal on notice.
• On termination by the agent because of a breach of contract by the principal.
• On termination by the principal where the agent is insolvent.
• On termination on the sale of the principal's business, whether or not the agency agreement is novated,
however, compensation or indemnity is less likely where the contract is novated.
• On partial termination or reduction in the subject matter of the agency agreement.
However, an agent's right to compensation or indemnity will not arise under the Directive where:
• The principal formally terminates because of default attributable to the agent or exceptional circumstances
which in each case would justify immediate termination of the agency contract under national law.
• The agent terminates either:
• for a reason not associated with the principal; or
• in circumstances where the agent is not elderly or incapable through illness of continuing.
• The agent assigns the agency agreement to another agent and the principal consents.
In contrast, under US law, a commissioned agent has no right to any indemnity or other compensation upon lawful
termination of its relationship with a principal/supplier, although, laws in most states impose varying penalties on
principals that fail to pay commissions to which agents are entitled after termination. The penalty will usually be
between two-to-four times the unpaid commissions, plus reimbursement of attorneys' fees incurred in collection
by the agent.
In any jurisdiction, and also whether or not the Directive applies, an agent may always make a claim for
compensation for wrongful termination.
"Indemnity" under the Directive

Agency: Cross-border overview, Practical Law UK Practice Note Overview…
© 2019 Thomson Reuters. All rights reserved. 21The right to an indemnity under the Directive arises if and to the extent that ( Article 17(2)(a) ):
• The agent has brought the principal new customers or has significantly increased the volume of business
with existing customers and the principal continues to derive substantial benefits from the business with
such customers; and
• Payment of the indemnity is equitable having regard to all the circumstances, in particular, the commission
lost by the commercial agent on the business transacted with such customers.
It would appear that no indemnity would therefore be payable in the following circumstances:
• If the agent has not made a significant increase in business (whether or not through lack of effort on its part).
• If the agent has increased business, but takes the customers with it when it leaves.
• Where the principal goes out of business so no benefit continues to be derived by the principal.
The amount of the indemnity must not exceed a figure equivalent to the agent's notional remuneration for one year,
calculated on the basis of the commercial agent's average annual remuneration over the preceding five years, or the
length of the contract if less ( Article 17(2)(b) ).
Where the national system permits a choice to be made between indemnity and compensation, this capped
indemnity is the preferred alternative for principals to include in the agency agreement, as opposed to compensation
where the majority of member states have no maximum cap on the amount the agent could recover.
As the remedy of indemnity is modelled on German law, the method of calculation used in Germany should provide
appropriate guidance (see Agency country questions: Germany and Practice Note, Agency:overview, Commission
report on indemnity . However, there are difficulties in the way which member states have implemented this
alternative. ( See Country Question 17. )
Compensation under the Directive
Under EU law, as an alternative to an indemnity, the agent is entitled to be compensated for the damage suffered as
a result of the termination of relations with the principal such as, the loss of the value of the agency. Damage which
will give rise to a right to compensation is deemed to occur particularly when the termination takes place as follows:
• In circumstances depriving the commercial agent of the commission which proper performance of the
agency contract would have generated, while providing the principal with substantial benefits linked to the
commercial agent's activities.
• In circumstances which have not enabled the commercial agent to amortise the costs and expenses that it
had incurred for the performance of the agency contract on the principal's advice ( Article 17(3) ).
• In contrast with the indemnity alternative, no maximum amount is specified for the compensation
alternative (although, in France, two years' commission is awarded based on market practice).
Time bar

Agency: Cross-border overview, Practical Law UK Practice Note Overview…
© 2019 Thomson Reuters. All rights reserved. 22The agent's claim for indemnity or compensation under the Directive becomes time-barred if it has not notified the
principal within a year of termination that it intends to pursue a claim ( Article 17(5) ). No formalities are prescribed
by the Directive for this notification. However, the UK regulations require that unless the agency agreement provides
otherwise, all notices should be served according to certain procedures and (by implication) must be in writing. (See
Country Question 17. )
The agency agreement
In many jurisdictions there are no special requirements that need to be fulfilled for an agency agreement to be
legally enforceable. Agency agreements are governed by the general principles of contract law. However, in some
jurisdictions an agency or distributor agreement that is not registered with local authority such as the ministry of
commerce will not be recognised by the court.
It is advisable for an agreement to be in writing and in some jurisdictions only short form agreements are acceptable.
Where the Directive applies, member states have the option to provide that an agency agreement shall not be
enforceable unless evidenced in writing ( Article 13(2) ). This has not been adopted in either France, Germany or the
UK. Nevertheless, a party to an agency agreement has the right to request a signed written document setting out the
terms of the agreement ( Article 13(1) ) and restraint of trade clauses must be put in writing ( Article 20 ).
In Italy, it is necessary for an agreement to be in writing for it to be executed, written form being necessary to prove
the existence of the contract. Several US states also impose similar requirements.
In addition, some US states severely penalise late payment of commissions to terminated commissioned agents,
making it advisable, and in some cases mandatory, that all provisions affecting the calculation and payment of
commissions be precise and detailed.
Depending on the territory of the agency agreement, it may need to be translated into the language of the territory
in order to be enforceable. In that case, it is usually advisable to have the translation reverse translated back into
the original language, in order to make sure that there are no mistake in the original translation. Also, particularly
in the Middle East, agency agreements may need to be signed before a notary, legalised by the foreign office of the
country of the principal, and/or legalised by the embassy of the territory in the country of the principal, and then
registered with the ministry of commerce in the territory.
Del credere guarantees
Where an agent is required to enter into a guarantee with the principal for the debts of customers that it finds for
the principal or that it concludes contracts with on behalf of the principal ( del credere agent), the guarantee must be
in writing for it to be valid in Germany. No such formalities are required in the UK, France or Italy, but, it is clearly
advisable to define the scope of such guarantee.
The scope of a del credere agent in Italy is severely limited, the agent being prohibited from entering into general
guarantees, with the principal, for the debts of all the customers that the agent finds for the principal or that the agent

Agency: Cross-border overview, Practical Law UK Practice Note Overview…
© 2019 Thomson Reuters. All rights reserved. 23concludes contracts with on behalf of the principal. Exceptionally, the agent may enter into del credere guarantees
in favour of the principal, on the condition that:
• The guarantee refers to single agreements, of particular type and value, individually defined.
• The amount of such guarantee cannot exceed the amount of the commission on which the agent would have
the right for that agreement.
• The agent is paid a specific consideration for the del credere guarantee.
The concept of a del credere guarantee is not recognised in the US.
Product Liability
A principal will generally provide its agent with an indemnity to cover the eventuality of a customer bringing a
product liability claim against the agent (except to the extent that the claim has been brought about by the agent's
own acts or omissions). The principal will, however, require that the agent assist in the implementation of a product
recall campaign and in defending product liability claims (whether the agent is sued or not), where necessary.
Product safety and liability issues are considered in Practice note, Product regulation, safety and recall: Cross-
border overview and Practice note, Product liability: Cross-border overview .
Anti-bribery and corruption
Under various international laws, a principal may need to evidence that procedures were put in place to prevent
any bribery or corruption, regardless of what capacity a party performs services. An anti-bribery clause should be
included in the agency agreement to ensure that the parties comply with any such applicable laws. Such a clause
should be included where either party is located in a jurisdiction or sector where the risk of bribery and corruption
issues are moderate and especially if the transaction concerns high risk jurisdictions or is of a high value or profit.
The UK Bribery Act 2010 applies where either party has a close connection to the UK (see Practice Note, Bribery
Act 2010: application to commercial agreements: Agency ). The US Foreign Corrupt Practices Act applies where a
party has formal ties with the US, so has greater extra-territorial effect. Many other countries have their own anti-
corruption legislation which should be referred to, where relevant to the transaction, for example, the Prevention
of Corruption Act (PCA) in Singapore.
Anti-bribery measures are particularly important with regard to agency appointments, because it is only too easy
for a corrupt agent to share some of its commission with an officer or official employed by the customer.
Anti-slavery and human trafficking
The US and UK have also recently introduced legislation to combat slavery and human trafficking. It is recognised
that businesses have a role to play in tackling these crimes and can take steps to ensure that there is no slavery or

Agency: Cross-border overview, Practical Law UK Practice Note Overview…
© 2019 Thomson Reuters. All rights reserved. 24human trafficking in its business or in its supply chains. Therefore, one such step includes inserting a clause in the
agency agreement that the parties will comply with any applicable laws and any policy that either party may have
in place on this issue. The parties will be subject to the anti-slavery laws of the territory anyway, but including an
appropriate clause is desirable to make it clear that the principal has a right of termination in the event of breach
of an anti-slavery obligation, and also to show that the principal has taken reasonable efforts to reduce the risk of
modern slavery in its supply chain.
Data protection
Both commercial agents and their principals are likely to process personal data, in particular the personal data of
customers and prospective customers, in which case they will have direct obligations under any data protection
legislation of the applicable law. They may also transfer personal data to one another, which is likely to give rise to
additional obligations, depending upon the jurisdiction.
For information on data protection in the UK and other EU member states, and for links to optional data protection
clauses, see Practice note: overview, Commercial agents: Data protection, the GDPR and the Data Protection Bill
2018-2019 . For agency agreements entered into outside of the UK and the EU, and otherwise falling outside of the
scope of the General Data Protection Regulation ((EU) 2016/679) , local data protection advice should be sought
to ensure compliance with any applicable laws.
Glossary terms
Block exemption
Block exemptions are contained in regulations issued by the European Commission, or in certain cases the Council of
Ministers. If an agreement meets the conditions set out in a so-called block exemption regulation, it is automatically
exempt from Article 101(1) of the Treaty on the Functioning of the European Union. Block exemptions have been
introduced for certain types of agreement (for example, vertical agreements, technology transfer agreements and
research and development agreements).
European Economic Area
The trading area established by the European Economic Area Agreement of 1 January 1994, currently comprising
the 28 EU member states and, in addition, Norway, Iceland and Liechtenstein.
This practice note was written by Practical Law Global based on original material provided by MacFarlanes.
END OF DOCUMENT

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