Agency Agreement (UK)
This Agency Agreement (the "Agreement") is entered into on [Effective Date] (the "Effective Date") by and between:
[Principal Name], [Principal Type], with its registered or principal address at [Principal Address], [Principal City], [Principal County], [Principal Postcode], England (hereinafter referred to as the "Principal"); and
[Agent Name], [Agent Type], with its registered or principal address at [Agent Address], [Agent City], [Agent County], [Agent Postcode], England (hereinafter referred to as the "Agent").
The Principal and the Agent are referred to collectively in this Agreement as the "Parties" and individually as a "Party".
BACKGROUND
WHEREAS, the Principal carries on the business of supplying [Products/Services] (the "Products/Services");
WHEREAS, the Principal wishes to appoint the Agent to promote, negotiate, and where authorised, conclude sales of the Products/Services within the Territory (as defined below) on behalf of the Principal;
WHEREAS, the Agent wishes to accept such appointment on the terms and conditions set out in this Agreement;
NOW, THEREFORE, in consideration of the mutual promises and undertakings set out herein, and for other good and valuable consideration, the receipt and adequacy of which the Parties hereby acknowledge, the Parties agree as follows:
1. APPOINTMENT
1.1 The Principal hereby appoints the Agent as [Exclusive Territory] commercial agent to promote, negotiate, and where authorised by the Principal, conclude sales of the Products/Services within [Territory] (the "Territory") on the terms and conditions of this Agreement.
1.2 The Agent accepts the appointment and agrees to act as the Principal's commercial agent in accordance with the terms of this Agreement and the duties imposed by the Commercial Agents (Council Directive) Regulations 1993 (the "Regulations").
2. AGENT'S DUTIES
2.1 In accordance with regulation 3 of the Regulations, the Agent shall:
- look after the interests of the Principal and act dutifully and in good faith;
- make proper efforts to negotiate and, where appropriate, conclude the sale of the Products/Services within the Territory;
- communicate to the Principal all necessary information available to the Agent;
- comply with all reasonable instructions given by the Principal; and
- not make any representations, warranties, or commitments on behalf of the Principal without the Principal's prior written authorisation.
2.2 The Agent shall also perform the following additional duties: [Additional Duties].
3. PRINCIPAL'S OBLIGATIONS
3.1 In accordance with regulation 4 of the Regulations, the Principal shall:
- act dutifully and in good faith towards the Agent;
- provide the Agent with the necessary documentation, samples, and information relating to the Products/Services;
- obtain for the Agent the information necessary for the performance of the agency contract, and in particular notify the Agent within a reasonable period once the Principal anticipates that the volume of commercial transactions will be significantly lower than that which the Agent could normally have expected;
- inform the Agent within a reasonable period of the Principal's acceptance, refusal, or non-execution of a commercial transaction which the Agent has procured.
4. COMMISSION
4.1 The Principal shall pay the Agent a commission of [Commission Rate]% of [Commission Basis] for each transaction concluded as a result of the Agent's actions within the Territory.
4.2 In accordance with regulation 7 of the Regulations, the Agent shall also be entitled to commission on transactions concluded during the period covered by this Agreement where the transaction has been concluded as a result of the Agent's action, or with a third party whom the Agent has previously acquired as a customer for transactions of the same kind.
4.3 Commission shall become due in accordance with regulation 10 of the Regulations, that is: (a) when the Principal has executed the transaction; or (b) when the Principal should, according to the agreement with the third party, have executed the transaction; or (c) when the third party has executed the transaction.
5. PAYMENT
5.1 Commission payments shall be made [Payment Frequency] by [Payment Method] to the Agent's nominated bank account.
5.2 In accordance with regulation 12 of the Regulations, the Principal shall supply the Agent with a statement of commission due not later than the last day of the month following the quarter in which the commission has become due, setting out the main components used in calculating the amount of the commission.
5.3 The Agent shall be entitled to demand that the Principal provide all information (and in particular an extract from the Principal's books) which is available to the Principal and which the Agent needs in order to check the amount of commission due.
6. TERM AND TERMINATION
6.1 This Agreement is for [Term Type] of [Fixed Term Duration] commencing on the Effective Date.
6.2 Either Party may terminate this Agreement by giving not less than [Notice Period] written notice to the other Party. The notice period shall not be less than the minimum periods prescribed by regulation 15 of the Regulations: one month for the first year of the agreement, two months for the second year, and three months for the third and subsequent years.
6.3 The Principal may terminate this Agreement immediately by written notice if the Agent commits a material breach of any term of this Agreement and (if such breach is capable of remedy) fails to remedy that breach within 30 days of receiving written notice requiring it to do so.
6.4 The Agent may terminate this Agreement immediately by written notice if the Principal fails to pay commission when due and (if such failure is capable of remedy) fails to remedy the default within 30 days of receiving written notice from the Agent.
7. COMPENSATION OR INDEMNITY ON TERMINATION
7.1 Upon termination of this Agreement, the Agent shall be entitled to [Termination Basis] in accordance with regulation 17 of the Regulations.
7.2 Where the compensation basis applies, the Agent shall be entitled to compensation for damage suffered as a result of the termination of the agency relationship, particularly where the termination takes place in circumstances which deprive the Agent of the commission which proper performance of the agency contract would have procured, while providing the Principal with substantial benefits linked to the activities of the Agent.
7.3 Where the indemnity basis applies, the Agent shall be entitled to an indemnity if and to the extent that the Agent has brought the Principal new customers or has significantly increased the volume of business with existing customers and the Principal continues to derive substantial benefits from the business with such customers, provided that the payment of the indemnity is equitable having regard to all the circumstances. The indemnity shall not exceed a figure equivalent to an indemnity for one year calculated from the Agent's average annual remuneration over the preceding five years or the period of the agency contract if less than five years.
7.4 The Agent must notify the Principal of its entitlement to compensation or indemnity within one year of the termination of this Agreement, in accordance with regulation 17(9) of the Regulations. Failure to do so will result in the loss of the Agent's entitlement.
8. CONFIDENTIALITY
8.1 The Agent shall keep confidential and shall not disclose to any third party (except to its employees and professional advisers on a need-to-know basis) any trade secrets, customer lists, pricing information, or other confidential information belonging to the Principal that comes to the Agent's knowledge in the course of performing this Agreement.
8.2 This obligation of confidentiality shall survive the termination or expiry of this Agreement for a period of three (3) years.
9. STATUS
9.1 The Agent is an independent contractor and nothing in this Agreement shall be construed as creating an employment relationship, partnership, or joint venture between the Parties. The Agent is not an employee of the Principal and shall not be entitled to any employment benefits.
9.2 The Agent shall be responsible for its own tax affairs, including income tax, National Insurance contributions, and VAT (if applicable), and shall indemnify the Principal against any liability arising from a determination that the Agent is an employee of the Principal.
10. GOVERNING LAW AND JURISDICTION
10.1 This Agreement and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it or its subject matter or formation shall be governed by and construed in accordance with the laws of England and Wales.
10.2 Each Party irrevocably agrees that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with this Agreement or its subject matter or formation.
10.3 This Agreement is subject to the mandatory provisions of the Commercial Agents (Council Directive) Regulations 1993, which cannot be contracted out of to the detriment of the Agent.
11. THIRD PARTY RIGHTS
11.1 A person who is not a party to this Agreement shall have no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any of its terms.
12. ENTIRE AGREEMENT
12.1 This Agreement constitutes the entire agreement between the Parties relating to the subject matter hereof and supersedes all prior agreements, representations, and understandings between the Parties relating to the same subject matter.
IN WITNESS WHEREOF, the Parties have executed this Agency Agreement as of the Effective Date first written above.
THE PRINCIPAL
Full name: [Principal Name]
Address: [Principal Address], [Principal City], [Principal County], [Principal Postcode], England
THE AGENT
Full name: [Agent Name]
Address: [Agent Address], [Agent City], [Agent County], [Agent Postcode], England
Principal
________________
Signature
Date: ________________
Agent
________________
Signature
Date: ________________
What Is a Agency Agreement (UK)?
An Agency Agreement in the United Kingdom sets the services to be provided, the fees, the timetable, and each side's responsibilities for the engagement, and is governed by the Companies Act 2006.
Commercial agency relationships in the United Kingdom are governed by the Commercial Agents (Council Directive) Regulations 1993 (SI 1993/3053), which implemented the European Council Directive 86/653/EEC into domestic law. Despite the UK's departure from the European Union on 31 January 2020, the Regulations remain in force as retained EU law under the European Union (Withdrawal) Act 2018 and continue to provide mandatory protections for commercial agents operating in England, Wales, Scotland, and Northern Ireland.
The Regulations impose a framework of rights and obligations that the parties cannot derogate from to the detriment of the agent. Key mandatory protections include: the duty of good faith owed by both the principal and the agent (regulations 3 and 4); the agent's entitlement to commission on transactions concluded during the term of the agency and, in certain cases, after termination (regulations 7 to 12); minimum notice periods for termination (regulation 15); and the agent's right to compensation or an indemnity upon termination (regulations 17 and 18). Any contractual provision that purports to exclude or restrict these mandatory rights is void under regulation 19.
Our UK Agency Agreement template is drafted for use by principals and agents operating under the laws of England and Wales. It provides a thorough framework covering appointment, territory, commission, payment terms, duties of both parties, term and termination, compensation on termination, non-compete restrictions, confidentiality, and data protection.
The legal framework governing the Agency Agreement (UK) in United Kingdom draws on several key statutes and regulatory bodies. Under the Companies Act 2006, Companies House maintains the register of UK companies. Section 386 of the Companies Act 2006 sets accounting record obligations. The Competition and Markets Authority (CMA) enforces the Consumer Rights Act 2015. The Financial Conduct Authority (FCA) regulates financial services under the Financial Services and Markets Act 2000. The High Court of Justice has jurisdiction under the Senior Courts Act 1981. Parties executing a Agency Agreement (UK) in United Kingdom should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Companies Act 2006 sets the foundational requirements.
When Do You Need a Agency Agreement (UK)?
An Agency Agreement is appropriate whenever a business (the principal) wishes to appoint an intermediary (the agent) to promote, negotiate, or conclude sales of its goods within a defined geographical territory in England, Wales, or internationally. The agreement formalises the agency relationship and confirms that both parties understand their rights and obligations, particularly in light of the mandatory protections provided by the Commercial Agents (Council Directive) Regulations 1993.
Common situations in which a UK Agency Agreement is required include: a manufacturer appointing a sales agent to market its products in a specific region of the United Kingdom or overseas; an importer appointing a local agent to develop sales relationships with retailers or distributors; a technology company appointing an agent to sell software licences or hardware products within a territory; and a wholesaler appointing an agent to secure orders from commercial buyers.
The United Kingdom Agency Agreement (UK) particularly important to use a formal Agency Agreement when the agent will have continuing authority to negotiate sales on behalf of the principal, as this triggers the application of the Commercial Agents Regulations 1993 and their mandatory protections. Without a written agreement, the parties may face uncertainty about commission entitlements, notice periods, and the agent's right to compensation on termination — all of which are regulated by the Regulations and cannot be excluded to the agent's detriment.
An Agency Agreement should also be used when the principal wishes to appoint the agent on an exclusive basis within a territory, as the exclusivity of the appointment affects the agent's commission entitlements under regulation 7 of the Regulations. An exclusive agent is entitled to commission on all transactions concluded with customers within the territory during the period of the agency, regardless of whether the agent was directly involved in procuring the sale.
The United Kingdom Agency Agreement (UK) important to distinguish a commercial agency agreement from a distribution agreement. An agent negotiates or concludes sales on behalf of the principal and does not purchase the goods for resale. A distributor purchases goods from the supplier and resells them in its own name and on its own account. The Regulations apply only to commercial agents, not to distributors.
What to Include in Your Agency Agreement (UK)
A well-drafted Agency Agreement for use in England and Wales should contain several essential provisions, many of which are mandatory under the Commercial Agents (Council Directive) Regulations 1993.
The appointment clause establishes the agency relationship and specifies whether the appointment is exclusive (sole agent in the territory) or non-exclusive. The distinction is important because, under regulation 7 of the Regulations, an exclusive agent is entitled to commission on all transactions within the territory during the agency period, even if the agent was not directly involved in securing the sale.
The territory clause defines the geographical area within which the agent has authority to act. A clearly defined territory reduces the risk of disputes about commission entitlements, particularly where the principal has multiple agents operating in different regions.
The products or services clause describes the goods or services that the agent is authorised to promote and sell. The Regulations apply only to agents who deal in goods (not services), so it is important to identify the subject matter clearly.
The commission clause is critical and must comply with the mandatory provisions of the Regulations. Under regulations 7 to 12, the agent is entitled to commission on: transactions concluded as a result of the agent's actions; transactions concluded with customers the agent has previously acquired for the same type of transaction; and (for exclusive agents) all transactions within the territory. The agreement should specify the commission rate, the calculation basis (net invoice value, gross value, or profit margin), and the circumstances in which commission becomes due.
The payment terms clause specifies when and how commission is paid. Regulation 12 requires the principal to provide the agent with a quarterly statement of commission due, and the agent has the right to inspect the principal's books to verify the calculation.
The term and termination clause must comply with the minimum notice periods prescribed by regulation 15: one month in the first year, two months in the second year, and three months in the third and subsequent years. These minimum periods cannot be reduced by agreement.
The compensation or indemnity on termination clause is one of the most significant provisions. Under regulation 17, the agent is entitled to either compensation or an indemnity when the agency is terminated. If the agreement is silent, compensation applies by default. The right to compensation or indemnity cannot be excluded by the parties (regulation 19), and the agent must claim within one year of termination (regulation 17(9)).
The non-compete clause, if included, must comply with regulation 20: it must be in writing, must relate to the territory and type of goods covered by the agency, and must not exceed two years. The governing law and jurisdiction clause should specify England and Wales. The forms-legal.com Agency Agreement (UK) template covers the mandatory elements under Companies Act 2006.
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Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Agency Agreement (UK) (United Kingdom) [Legal document template]. Forms Legal. https://forms-legal.com/uk/business/contracts/agency-agreement-uk
"Agency Agreement (UK) (United Kingdom)." Forms Legal, 2026, https://forms-legal.com/uk/business/contracts/agency-agreement-uk.
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title = {Agency Agreement (UK) (United Kingdom)},
year = {2026},
howpublished = {\url{https://forms-legal.com/uk/business/contracts/agency-agreement-uk}},
note = {Free legal document template. Based on Companies Act 2006}
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Frequently Asked Questions
The Commercial Agents (Council Directive) Regulations 1993 (SI 1993/3053), as amended, implement the European Council Directive 86/653/EEC into the law of England and Wales (and Scotland and Northern Ireland). Despite the UK's departure from the European Union, the Regulations remain in force as retained EU law under the European Union (Withdrawal) Act 2018. The Regulations apply to 'commercial agents' — defined as self-employed intermediaries who have continuing authority to negotiate the sale or purchase of goods on behalf of a principal. The Regulations provide mandatory protections that cannot be contracted out of to the detriment of the agent, including: the right to commission on transactions concluded as a result of the agent's actions (regulations 7–12); minimum notice periods for termination (regulation 15); and the right to compensation or an indemnity upon termination (regulations 17–18). The Regulations do not apply to agents who deal in services (as opposed to goods), unpaid agents, officers of companies, partners, insolvency practitioners, or commodity dealers acting on commodity exchanges.
Regulation 17 of the Commercial Agents Regulations 1993 provides that upon termination, the agent is entitled to either compensation or an indemnity. If the agency agreement does not specify which basis applies, compensation is the default under English law. The compensation basis entitles the agent to compensation for damage suffered as a result of the termination, particularly where termination deprives the agent of commission which proper performance would have generated while providing the principal with substantial benefits. English courts have assessed compensation by reference to the market value of the agency — typically calculated as a multiple of the agent's average annual commission, commonly two years' gross commission, as confirmed in Lonsdale v Howard & Hallam Ltd [2007] UKHL 32. The indemnity basis entitles the agent to a payment reflecting the new business the agent has brought to the principal and the ongoing benefit the principal derives from it. The indemnity is capped at one year's average annual remuneration over the preceding five years. The agent must claim compensation or indemnity within one year of termination (regulation 17(9)), or the entitlement is lost.
Under regulation 18 of the Commercial Agents Regulations 1993, compensation or indemnity is not payable in three specific circumstances: (a) where the principal has terminated the agency contract because of default attributable to the agent which would justify immediate termination under regulation 16; (b) where the agent has terminated the agency contract, unless the termination is justified by circumstances attributable to the principal or by the agent's age, infirmity, or illness making continued activity unreasonable; or (c) where the agent, with the principal's agreement, assigns its rights and duties under the agency contract to another person. Outside these three exceptions, the principal cannot exclude or restrict the agent's right to compensation or indemnity — any contractual provision purporting to do so is void under regulation 19. This is one of the most significant mandatory protections in the Regulations and means that even a well-drafted termination clause cannot avoid the obligation to compensate the agent if none of the three exceptions applies.
Yes, but only if they comply with the strict requirements of regulation 20 of the Commercial Agents Regulations 1993. A restraint of trade clause in a commercial agency agreement is valid only if it: (a) is concluded in writing; (b) relates to the geographical area or the group of customers and the geographical area entrusted to the commercial agent, and to the kind of goods covered by the agency contract; and (c) does not exceed a period of two years after termination of the agency contract. If the clause fails to satisfy any of these requirements, it is void and unenforceable. In addition, the general common law doctrine of restraint of trade applies: the restriction must be reasonable in the interests of the parties and not contrary to the public interest. English courts will not uphold a non-compete clause that goes beyond what is reasonably necessary to protect the principal's legitimate business interests.
Regulation 15 of the Commercial Agents Regulations 1993 prescribes minimum notice periods for terminating an agency contract of indefinite duration. The minimum periods are: one month during the first year of the contract; two months during the second year; and three months during the third and subsequent years. The parties may agree to longer notice periods, but the notice period for the principal must not be shorter than the notice period for the agent. These are mandatory minimum periods and cannot be reduced by agreement. For a fixed-term agency contract that continues to be performed after the expiry of the fixed term, it is treated as an agency contract for an indefinite period, and the notice periods above apply with the fixed-term period counting towards the calculation. The notice must be in writing and must be clear and unambiguous.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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