I am a commercial agent and my principal has written to me saying that our agency contract is being terminated. Can my principal do this?

It depends. Your agency contract may for a fixed term (ie, ending on a definite date), in which case the contract can normally be expected to run for that entire period. The parties may, of course, agree to vary the term of the contract if the correct legal procedures are followed. A premature termination by one party of the contract is likely to have serious consequences and will, in most cases, allow the other party to sue for breach of contract, claiming damages for any losses suffered.

If the agency contract is for an indefinite period (or is a fixed-term agreement which has been converted to an ongoing contract), then either party may terminate it by notice in accordance with Regulation 15 of the Commercial Agents (Council Directive) Regulations 1993 (as amended). The minimum periods of notice are 1 month each year (or part year) of the contract up to a maximum of 3 months’ notice. Unless otherwise agreed, the contract must terminate at the end of a calendar month. The parties can agree that longer periods of notice will apply, but the period to be given by the principal must not be shorter than the notice to be given by the agent.

If the principal does not give the correct amount of notice under Regulation 15, then it will be liable to the agent for the commissions which would have been earned during that period, and must make a payment to the agent in lieu of giving notice.