Agent Law Newsletter July 2010

Introduction

"You are a despicable, horrible little excuse for a human being" was part of the statement made by Mr Gledhill to the managing director of his principal, Bentley Designs.
 
Leaving aside the issue of whether such a statement can be rectified by the agent then giving an unreserved apology, the case serves as a reconfirmation that agents must move with the times. They are business people who must adapt to changing circumstances.
 
In Gledhill, the agent refused to use email and Word. Other agents will regard this as surprising in an age of Blackberrys and iPhones. But given today's economy and the need to deliver, it can be expected that the pace of change will be relentless. It therefore becomes agents to change, not only to avoid the consequences of the decision in the recently decided Gledhill v Bentley Designs, but also to improve the performance of their businesses generally. 
 
In this edition...

The Bribery Act 2010:
New laws on Bribery are coming into force which have far-reaching implications for most businesses, including agents and principals. Businesses that fail to act on the new legislation could face very serious consequences.
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Governing law and jurisdiction: Getting it right is crucial:
When negotiating agency agreements, it is all too easy to ignore or place little importance on the governing law and jurisdiction clauses.  However, these become very important if a dispute arises, as they determine in which country any court proceedings will be heard, and what law will be applied to determine the rights and wrongs of the dispute.  This article explores the consequences (for parties based in the EU) of not agreeing on governing law and jurisdiction.
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Gledhill v Bentley Designs:
Non-compliance with a principal’s reasonable instructions can put an agent in all sorts of difficulties. This is especially so where an agent is unwilling to change working practices. This is the result of the recent case of Gledhill v Bentley Designs, although for the wrong reason!
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Q&A Session

QUESTION: I am an agent thinking of appointing one or more sub-agents.

I am aware of your advice that agents need to take care when engaging sub-agents because there could be a case for sub-agents being covered by the Commercial Agents Regulations.

In other EU countries, such as Italy, I understand that other forms of contract exist to avoid the risks of sub-agency.  For example, I understand that it is possible for an agent to appoint a helper or a lead generator.  The helper or lead generator would have no obligations of or similar to an agent.

Please could you let me know whether these forms of contract are used in the UK?

ANSWER:
As a matter of English law, the issue is usually the substance of the agreement as opposed to its title or form.  As such, if a "helper" or lead generator is in substance a sub-agent, then there will be a need to take care.  However, it is also possible that the "helper" or lead generator may be:

  • an agent other than a commercial agent coming within the terms of the Commercial Agents Regulations (and the EU Self-Employed Agents Directive); or
  • a self-employed person, for example a consultant; or
  • an employee.

In any event, we recommend that you put in place a sub-agency agreement which reduces your exposure to your prospective sub-agents.

Meet the team

Jane Elliot graduated from the University of Birmingham in 1997 with an honours degree in Law with French. She spent a year in France and gained a Diplôme d’Études Juridiques Françaises from the University of Limoges. She completed the Legal Practice Course at BPP Law School in London.

Jane trained at Fox Williams LLP and remained with the firm following her qualification as a solicitor in 2000. Since joining Fox Williams LLP, she has specialised in reviewing and drafting agency and distributorship agreements and advising clients on the Commercial Agents Regulations. She acts for both principals and agents based in the UK and abroad and operating in a variety of industries. She is also a member of the Fox Williams fashion law group.

Jane Elliot
Senior Associate
jlelliot@foxwilliams.com
Tel: 020-7614 2623
Fax: 020-7614 1423