Agency Law
AGENCY LAW, AGENCY AGREEMENTS IN BRISTOL
Modern business thrives on a flexible workforce and it has become increasingly common for businesses of all kinds to use agents, freelancers and consultants as a way of bringing in outside resource and expertise but with the flexibility to keep overheads down. However, as with all things legal, there are potential complications, both in terms of agency law and employment law.
PROBLEMS WITH COMMERCIAL & BUSINESS AGENTS
Commercial agency is a complex area since there are numerous different types of contractual situations which can potentially end up being subject to statutory regulation.
In employment law terms, classification of a legal arrangement as employee, agent or conusltant is not always straightforward under English law, and cases tend to be considered on their own merits by the courts in the event of dispute. A relationship which may have started with the intention of being agency can change over time, and be interpreted as having become an employment relationship. This can result in:
- The agent/consultant gaining significant employment law rights
- Tax consequences
AGENCY LAW IS A REGULATED AREA
Agency law is highly regulated, particularly by EU law. The Commercial Agency (Council Directive) Regulations 1993 gives sales agents rights including minimum notice periods and potentially significant entitlement to compensation on termination. It is strongly recommended to have a professionally drafted agency agreement which clearly deals with issues including :-
- An agent’s authority to bind the principal
- Entitlement to commission
- Exclusivity
- Working practices
- Termination of agreement
- Matters which would constitute breach of the agreement
- The position on expenses incurred
If you are a business considering taking on a consultant, freelancer, contractor or agent, it is important to take legal advice.