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WWW.MACROBERTS.COM
MacR
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Euan Duncan STLA Event 3 June 2014
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What is a Contract?
• when are you bound
• how can you be bound
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• managing the process
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Agency v DistributorshipM
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Agency v Distributor
• Both agent and distributor are intermediaries in the supply chain between the principal/supplier & the end customer.
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• The distinguishing factor is the position or status of the intermediary in relation to the principal/supplier & the end customer.
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What is a Commercial Agent?
“ a self-employed intermediary who has continuing
authority to negotiate the sale and purchase of
goods on behalf of another person (“the principal”)
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om goods on behalf of another person (“the principal”)
or to negotiate and conclude the sale of purchase
of goods on behalf of and in the name of that
principal…..”
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Law
• Common law◘ Fiduciary relationship◘ Obey lawful instructions◘ Act within limits of authority◘ Not to make secret profits
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om ◘ Not to make secret profits
• Statutory◘ Commercial Agents Directive (86/653/EEC) –
under evaluation◘ Commercial Agent’s Regulations 1993
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Agency Agreement
• Why appoint an agent and terms to
consider?
◘ Supplier can retain control of the terms of
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◘ Supplier can retain control of the terms of sale of the product e.g. the price
◘ Restrict the customers the agent deals with
◘ Control over marketing methods
◘ Regulate samples
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Termination of Agency Agreement
• Indefinite term or fixed term
• Benchmarking
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• Benchmarking
• Minimum notice periods◘ One month for the first year◘ Two months for second year◘ Three months for third year and
subsequent years
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Distribution Agreements
• Principal/supplier can pass a large degree of risk onto the distributor
• Distributor more motivated to sell due to risk
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risk
• The principal/supplier only has to monitor one account with the distributor
• No compensation or indemnity is payable to the distributor on termination in the UK
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Managing your distributor
• Written distribution agreement
• Reference underperformance to a
quantitative or qualitative criterion
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• Sales criteria – how the product is
sold and who the product is sold to
• Samples
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Distributor appointed in foreign country
• Points to consider -
◘ Is the agreement subject to the laws of the foreign
country where the distributor is based?
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◘ Is there legislation in that country that specially
related to distribution agreements?
◘ Will the supplier have to comply with any formalities
when appointing the disributor?
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Case
• Raoul Sagal (Trading as Bunz UK) v Atelier
Bunz GMBH
• Raoul Sagal claimed he was commercial
agent for Atelier Bunz GMBH.
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om agent for Atelier Bunz GMBH.
• Sold jewellery designed by Bunz in the UK
under an oral contract.
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Case
• Claramode Limited v Zoomphase Limited (t/a Jenny Packham) 2009 EWHC 2857 (Comm)
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• High Court considered the position of when the agent’s authority ended
in the absence of a clear termination date
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Questions?M
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© MacRoberts LLP 2014
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WWW.MACROBERTS.COM
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