Unlike the law in the United Kingdom, in Australia there is no distinct concept, either statutory or at common law, of a ‘commercial agent’. Australia has a federal legal system. Accordingly, both Commonwealth (federal) and State or Territory legislation will apply to commercial arrangements.
The common law applied in Australian jurisdictions contains the broader concept of an 'agent', being a person with an authority or capacity to create or affect legal relations between a principal and third parties. The common law governs the formation, operation and termination of the agency relationship, as well as the rights and duties of the agent, the principal and the third party. Australian common law is based on the law of the UK.
In particular circumstances an agent's activities are, under the law applicable in Australian States and Territories, regulated by statute. Some examples of such agents and the corresponding statutes are:
• auctioneers: Auction Sales Act 1958 (Victoria);
• estate agents: Estate Agents Act 1980 (Victoria);
• finance brokers: Consumer Credit (Victoria) Act 1995 (Victoria);
• travel agents: Travel Agents Act 1986 (Victoria);
• mercantile agents: Goods Act 1958 (Victoria); and
• insurance agents: Instruments Act 1958 (Victoria), Credit Act 1984 (Victoria),
Note that the above legislation is Victorian legislation. There may be considerable differences in other States and Territories. As a general rule, these statutes focus on the licensing and business activities of the agent, rather than the relationship between the agent and the principal.
Under Australian law there is no definition of 'commercial agent' which corresponds with the UK/EU concept of a commercial agent.
The term 'commercial agent' is used in legislation in Australia in relation to activities such as security and investigative activities (serving a writ or summons, repossessing or locating goods, or collecting or requesting payment of debts). Some examples of these are set out below.
• Under the Commercial Agents and Private Inquiry Agents Act 2004 (New South Wales) 'commercial agent’ means “the holder of a master licence or operator licence with respect to one or more commercial agent activities.” 'Commercial agent activity' means debt collection, process serving or repossession of goods.
The broader common law concept of an ‘agent’ would encompass the sale and purchase of both goods and services.
Under Australian law, a ‘principal’ is defined at common law as a person who confers upon an agent the authority to act on the person's behalf for the purpose of creating or affecting legal rights and duties between the person and third parties.
Under Australian law, there is no statutory requirement in terms of notice period to be given or the form the notice of termination should take. Termination of an agency arrangement will usually be determined according to the terms of the relevant agency contract. Any rights to damages or unpaid commission following termination of the agency contract would be determined under common law principles.
On termination of the agency contract, an agent will not have any other non-contractual entitlements specifically relating to the agency relationship. However, there may be other rights generally available in the circumstances of contractual termination.
The ability of an agent to assign his rights and duties to another person as well as the remedies for breach of contract is governed by Australian common law.
Choice of Law and Jurisdiction
Generally speaking, express choice of law and choice of forum provisions in contracts are effective under the law applicable in Australian States and Territories. Parties have a wide discretion to choose the proper law and forum of the contract. Accordingly, provisions in an agency agreement stipulating that English law is to govern the contract (and that English courts are to have jurisdiction) are likely to be given effect. Where an agency contract has a jurisdiction clause, but is silent with respect to choice of law, there is a strong presumption under Australian law that the parties have chosen the law of the jurisdiction as the proper law of the contract.
However, in certain circumstances the law applicable in Australian States and Territories will be applied regardless of the existence of a choice of law/forum provision in an agency contract, including where:
• there is an initial question as to whether a valid contract has come into existence;
• it would be unconscionable to enforce the choice of law provision; or
• the choice of law provision was designed to evade the application of a mandatory Australian law (eg. an obligation imposed by statute).
Fox Williams would like to thank Emma Brady at Minter Ellison, Melbourne for her contribution to this page.