The Commercial Agents Regulations ("The Regulations") Flashcards
What are the “Commercial Agents Regulations”?
It is a European Directive which aims to harmonise the law relating to agency in the EU.
The Commercial Agents Regulations came into force on 1st January 1994 and apply to all agency agreements in existence on that date. They apply where the activities of the agent have taken place in Great Britain, regardless of the nationality of the agent or of the principal (reg 1(2)). They seek to harmonise conditions for commercial agents acting throughout the European Union, and they provide commercial agents with significant protections.
Who do the Commerical Agents Regulations apply to?
¥ THESE REGULATIONS APPLY TO COMMERCIAL AGENTS ONLY - NOT TO EVERY AGENT. DO NOT APPLY THESE REGULATIONS IN SITUATIONS WHERE THERE IS NOT A COMMERCIAL AGENT. ALSO THESE REGULATIONS ONLY AFFECT THE PRINCIPAL/AGENT RELATIONSHIP - IT DOES NOT CONCERN FORMING CONTRACTS WITH THE OUTSIDE WORLD
¥ * IT IS ALSO IMPORTANT TO REMEMBER THAT THESE REGULATIONS ONLY REALLY APPLY WHERE THE AGENTS CONTRACT IS TERMINATED*
¥ FINALLY, THESE REGULATIONS ALSO APPLY TO AGENCY CONTRACTS WHICH WERE FORMED PRIOR TO THE INTRODUCTION OF THE REGULATIONS
What sort of agents do the Regulations apply to?
A commercial agent is: “A self-employed intermediary who has continuing authority to negotiate the sale or purchase of goods on behalf of another person (the principal) or to negotiate and conclude the sale or purchase of goods on behalf of and in the name of the principal.” Sagal t/a Bunz UK v Atelier Bunz GmbH [2009] EWCA Civ 700; [2009] 4 All ER 1253; [2010] 1 All ER (Comm) 104; [2009] 2 Lloyd’s Rep 303
What are the key requirements of a commercial agent?
So the key requirements:
⁃ 1) self employed
⁃ 2) continuing authority
⁃ 3) to negotiate the sale or purchase of goods / to negotiate and conclude the sale or purchase of goods
⁃ 4) on behalf of and in the name of the principal[ So an undisclosed principal relationship will not fall into these regulations.]
Have the courts found it easy to apply the regulations?
The courts have found it difficult to apply this piece of legislation (primarily because continental countries have tended to have a much more protective attitude towards agents than us, but this legislation seeks to harmonise our rules):
Parks v Esso [1999]
The word “negotiate” has been subject to some litigation: Meaning of Negotiate:
⁃ In order to interpret the legislation, the English court used the Oxford English dictionary rather than considering the interpretation of the term by other European courts. The essential question was whether someone who is running an Esso petrol station who is supplying petrol to the customers (but has very limited if any discretion) is able to ‘negotiate’ so as to be considered to be an agent in this context. The court held that they were not to be considered to be an agent.
P J Pipe and Valve v Audco [2005]
In this case there was less strict interpretation of the word ‘negotiate’.
What happens if the actions of the commercial agent are secondary?
The Regulations do not apply where the activities of the commercial agent are ‘secondary’. The provisions are notoriously complex and it will not be possible in the lecture to provide a full picture of the difficulties [and we will not be asked to apply these particular provisions in the exam].
reg 2 and Schedule, para 2
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Gailey v Environmental Waste Controls and ors, [2004] Eu LR 42
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McAdam v Boxpak Ltd 2005 SLT (Sh Ct) 47; 2006 SLT 217 (IH), [2006] Eu LR 901
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Marjandi Ltd v Bon Accord Glass Limited, per Sheriff Tierney, Aberdeen Sheriff Court, 15 October 2007 (unreported).
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Consider the situation where an agent delegates (legitimately) to a subagent. Does this subagent at the bottom of the chain have a right to be protected by the principal at the top of the chain?
NO
It is a requirement that the commercial agent have a direct contractual relationship with the principal for the regulations to apply:
Light & ors v Ty Europe Ltd, [2003]
This question was answered in the positive by the English Court of Appeal in this case.
Thus, there must be a direct contractual link between the principal and agent in question before these regulations apply. [LM: not entirely convinced that this is correct. It is English Court of Appeal level so would be highly persuasive in the Scottish courts].
Barnett Fashion Agency Ltd v Nigel Hall Menswear Ltd [2011] EWHC 978 (QB); [2013] EWHC 91
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