Agency Agreement

Updated for 2014

An agency agreement legally authorises a sales agent to act on a principal’s behalf within a set of defined parameters for the purpose of taking product orders and procuring delivery on behalf of the principal in the same way that an internal sales person might do so.

This agency agreement sets out the full rights and obligations of each party in connection with the principal/agent arrangement between them.

Further details are set out below.

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The agency agreement sets out the terms upon which the principal appoints the agent as its agent to sell its products in the specified sales territory. That appointment will usually be on an exclusive or non-exclusive basis. Where the appointment is exclusive, the agent will be the sole agent appointed by the principal to sell the specified products in the specified territory. If the appointment is non-exclusive, the principal will be entitled to appoint other agents to sell its products in the territory.

In many cases, the principal will reserve the right to either sell products to customers generally in the territory or to specific customers only. Notwithstanding the foregoing, if the agent fails to meet the required sales targets, the principal can sell to all customers and potential customers in the territory.

The obligations of an agent include matters such as acting in the best interests of the principal, complying with instructions received from the principal, promoting the sale of the products, dealing with customers and complaints, employing appropriate staff, keeping the principal informed of marketing and sales related matters as well as in relation to stock levels and anticipated sales levels, keeping appropriate records in relation to customers and sales, providing access for the principal to customer and sales, information, keeping products and stock secured and insured, issuing appropriate invoices, collecting payments, recovering debts, etc.

The agent will be obliged to sell the products subject to the principal’s standard terms and conditions and at the prices set by the principal from time to time.

The agency agreement also sets out the obligations of the principal which include obligations to act in good faith, to indemnify the agent in respect of any liability that it occurs from the proper performance of its obligations under the agreement, to cover the reasonable costs of the agent from time to time, to supply the agent with appropriate sales materials and documentation for the purpose of promoting the sale of the products and performing its duties under the agency agreement, to provide stocks of the products to the agent, to perform contracts made by the agent with customers on behalf of the principal, to deal with after sales matters, etc.

The agency agreement also sets out the manner in which the commission payable to the agent will be calculated and paid.

The agent will have specific obligations under the agency agreement in relation to the advertising and promotion of the principal’s products in the sales territory. All literature and promotional material must be pre-approved by the principal and the agent must comply with the instructions received from the principal from time to time.

The principal is required to supply products to the agent that comply with local laws in the sales territory. In turn, the agent agrees to obtain and maintain any licences, consents, etc. necessary to sell the products in the territory and to comply with all applicable rules and laws in relation to the sale of the products.

In relation to intellectual property rights, the agent will be allowed to use these rights during the term of the agreement, save that the rights will cease immediately upon termination of the agreement.

Detailed instructions on each of the clauses in this agency agreement and on completing the agency agreement are contained in the notes that accompany the agreement.



Clauses Included in this Agency Agreement:

- Definitions and Interpretation Clause

- Appointment Clause

- Agent’s Obligations Clause

- Sale of Products Clause

- Principal’s Undertaking Clause

- Commission and Payments Clause

- Advertising and Promotions Clause

- Compliance with Laws and Regulations Clause

- Intellectual Property Clause

- Product Liability and Insurance Clause

- Duration and Termination Clause

- Effect of Termination Clause

- Notices Clause

- Confidentiality Clause

- Costs Clause

- Non-Compete Restrictions Clause

- Assignment Clause

- Amendments Clause

- Waiver Clause

- Severability Clause

- Force Majeure Clause

- Counterparts Clause

- Entire Agreement Clause

- Governing Law and Jurisdiction Clause

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