The claimant argued that it had acted for twenty years as the defendant timber products manufacturer’s commercial agent.

There had been a series of agreements between the parties. The most recent agreement expressly appointed the claimant as the defendant’s agent. In addition it provided for the claimant to be remunerated by a mark-up between the prices charged by the defendant to the claimant and those negotiated by the claimant with end buyers. In addition the agreements provided for the claimant to be responsible out of its own funds for paying the defendant for products supplied.

The defendant argued that although the agreements between the parties used the language of agency, the substance of the relationship was consistent only with the purchase and resale of products by the claimant as part of a chain. In particular the defendant pointed out that the claimant entered into contracts with end buyers that were in different terms to those between the claimant and the defendant.

These issues did not find favour with the Court of Appeal. Instead it pointed out that the contractual documentation purported to describe the relationship between the parties as that of agency. It was impossible to ignore its effect. This was so whatever view might be taken of the factors that the defendant contended where inconsistent with an agency relationship. In particular, the fact that the claimant was remunerated by a mark-up could not displace the clear terms of the documentation.

This briefing note is for general information. For advice in applying this general information to your specific circumstances, please contact Stephen Sidkin or any members of the Fox Williams’ agentlaw team. (www.agentlaw.co.uk).

Written by Steve Sidkin

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