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A self-employed intermediary who has continuing authority to negotiate the sale or purchase of goods on behalf of the principal or to negotiate and conclude the sale or purchase of goods on behalf of and in the name of that principal. [Commercial Agents (Council Directive) Regulations 1993, SI 1993/3053, reg 2(1)].
A person is deemed a commercial agent by comparing the facts to the regulatory definition, and specifically, if the sale or purchase of goods was negotiated by the intermediary in its own interest rather than on behalf of the principal, the intermediary was not a commercial agent. The paradigm example of an intermediary so negotiating is that of a distributor purchasing goods from the manufacturer but reselling the goods for a profit on the mark-up. The commercial agent is also entitled to indemnity or compensation on termination of the agency contract when the commercial agent is deprived of his commission despite providing his principal with substantial benefits or had not enabled the commercial agent to amortise his costs and expenses he had incurred in the performance
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Payment Services Directive 2 (PSD2) and Payment Services Regulations 2017 (PSRs 2017)—timeline The first Payment Services Directive (2007/64/EC) (PSD1) came into force on 25 December 2007 and was required to be implemented by Member States by 1 November 2009. PSD1 was implemented in the UK through the Payment Services Regulations 2009, SI 2009/209 (PSRs). PSD1 was intended to regulate payment service providers (PSPs) and harmonise the payments sector within the European Union (EU). However, advances in payment systems outstripped the regulatory capacity of PSD1 and, in July 2013, the European Commission (Commission) introduced a proposal for a second Payment Services Directive (PSD2). PSD2 (Directive 2015/2366) entered into force on 13 January 2016. Most of its provisions had to be implemented by Member States by 13 January 2018. PSD2 incorporated and repealed PSD1. PSD2 aimed to improve on PSD1 by, among other things: • increasing its scope so that it no longer includes only PSPs within the EU and the European Economic Area (EEA) • focusing on consumer protection...
Commercial agent status: checklist for employment lawyers Where an individual is being appointed to sell or purchase products, the employer may wish to consider the individual’s status: will they be an employee, agent, distributor or franchisee? (See Appointing a sales and marketing agent—checklist and Practice Note: Employee status.) Domestic laws that implement UK obligations under EU-derived laws are assimilated law. For further information, see Practice Note: Assimilated law. If the individual is not an employee, the 'employer' should consider whether they fall within the definition of 'commercial agent' for the purposes of the Commercial Agents Regulations 1993, which implement a Council Directive on the coordination of the laws of member states relating to self-employed commercial agents and so are assimilated law. These Regulations impose various terms on the relationship between a principal and a self-employed commercial agent, many of which the parties may not exclude by contract. In particular, they normally entitle the agent to a payment on termination of the agency arrangement. This checklist considers the factors to be...
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This Practice Note explains the relationship between a commercial agent and a principal as provided by the Commercial Agents (Council Directive) Regulations 1993, SI 1993/3053 (the Commercial Agents Regulations). For guidance on the application of the Commercial Agents Regulations, see Practice Note: Commercial agency.BackgroundThe Commercial Agents Regulations came into force on 1 January 1994 and implemented Council Directive 86/653/EEC (OJ L 382/17), the EU Commercial Agents Directive. While the Commercial Agents Regulations derive from EU law, they were retained under the European Union (Withdrawal) Act 2018 (as amended) from 11 pm on 31 December 2020 (IP completion day). They have not been repealed by the Retained EU Law (Revocation and Reform) Act 2023 (REUL(RR)A 2023) and from 1 January 2024 are considered assimilated law in the UK. For more information, see Practice Notes: Introduction to the Retained EU Law (Revocation and Reform) Act 2023 and Assimilated law. For more information on the EU Commercial Agents Directive, see Practice Note: The EU Commercial Agents Directive.This Practice Note includes references to EU...
This Practice Note covers how the Commercial Agents (Council Directive) Regulations 1993 (the Commercial Agents Regulations 1993), SI 1993/3053 govern the termination of a commercial agency arrangement. It covers a commercial agent’s right to payment of compensation or an indemnity in the event of such termination. It discusses the way that compensation and indemnity may be calculated on termination of a commercial agency arrangement under the Commercial Agents Regulations 1993 and the circumstances in which compensation or an indemnity are not payable.The Commercial Agents Regulations 1993 came into force on 1 January 1994 and implemented Council Directive 86/653/EEC (OJ L 382/17), the EU Commercial Agents Directive. While the Commercial Agents Regulations 1993 derive from EU law, they were retained under the European Union (Withdrawal) Act 2018 (as amended) from 11 pm on 31 December 2020 (IP completion day). They have not been repealed by the Retained EU Law (Revocation and Reform) Act 2023 (REUL(RR)A 2023) and from 1 January 2024 are considered assimilated law in the UK. For more information,...
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Sales and marketing agency agreement for goods—non-exclusive—pro-principal This Agreement is made on [date] Parties 1 [insert name of party] [of OR a company incorporated in [England and Wales] under number [insert registered number] whose registered office is at] [insert address] (Principal); and 2 [insert name of party] [of OR a company incorporated in [England and Wales] under number [insert registered number] whose registered office is at] [insert address] (Agent), (each of the Principal and the Agent being a party and together the Principal and the Agent are the parties). Background (A) The Principal [manufactures OR manufactures and sells] the Products (as defined below). (B) The Principal wishes to appoint the Agent as its non-exclusive agent in the Territory (as defined below) for the [marketing OR marketing and sale] of the Products on the terms of this Agreement. (C) The Agent has agreed to [market OR market and sell] the Products in the Territory on the Principal’s behalf on the...
Sales and marketing agency agreement for goods—exclusive—pro-agent This Agreement is made on [date] Parties 1 [insert name of party] [of OR a company incorporated in [England and Wales] under number [insert registered number] whose registered office is at] [insert address] (Principal); and 2 [insert name of party] [of OR a company incorporated in [England and Wales] under number [insert registered number] whose registered office is at] [insert address] (Agent), (each of the Principal and the Agent being a party and together the Principal and the Agent are the parties). Background (A) The Principal [manufactures OR manufactures and sells] the Products (as defined below). (B) The Principal wishes to appoint the Agent as its exclusive agent in the Territory (as defined below) for the [marketing OR marketing and sale] of the Products on the terms of this Agreement. (C) The Agent has agreed to [market OR market and sell] the Products in the Territory on the Principal’s behalf on the terms of...
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Is a purchaser of a business liable to a commercial agent of the seller of that business if the agency agreement is terminated prior to completing the business transfer? For the purposes of this Q&A, we have focussed on the contractual arrangements and allocation of liabilities stemming from the business transfer. Commercial Agency Regulations 1993 Our Practice Note: Termination of commercial agency considers the regulations governing the termination of commercial agencies (as defined in the Commercial Agency Regulations (CAR 1993)) and looks at when the right to indemnity or compensation does or does not exist in general. CAR 1993, reg 17 deals with the entitlement of commercial agent to an indemnity or compensation on termination of an agency contract. In particular, reg 17 (6)–(9) states the following: (6) Subject to paragraph (9) and to regulation 18 below, the commercial agent shall be entitled to compensation for the damage he suffers as a result of the termination of his relations with his principal. (7) For the purpose...
Do the Commercial Agent Regulations SI 1993/3053 apply to second hand or reconditioned goods? General application Regulation 2 of the Commercial Agents (Council Directive) Regulations 1993 (the Commercial Agents Regulations), SI 1993/3053 state: ‘(1) In these Regulations— “commercial agent†means a self-employed intermediary who has continuing authority to negotiate the sale or purchase of goods on behalf of another person (the “principalâ€), or to negotiate and conclude the sale or purchase of goods on behalf of and in the name of that principal; but shall be understood as not including in particular: (i) a person who, in his capacity as an officer of a company or association, is empowered to enter into commitments binding on that company or association; (ii) a partner who is lawfully authorised to enter into commitments binding on his partners; (iii) a person who acts as an insolvency practitioner (as that expression is defined in section 388 of the Insolvency Act 1986) or the equivalent in any other jurisdiction;’ [our emphasis]...
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Commercial analysis: Software-as-a-Service (‘SaaS’) is a cloud-based software delivery model where computer applications are hosted online and made available to customers over the internet. The SaaS model is now the predominant means of supplying software to customers. In The Software Incubator v Computer Associates, the Court of Justice decided that where a customer obtains a perpetual licence to use computer software, then that is a ‘sale of goods’ for the purposes of the Commercial Agents Directive (Council Directive 86/653/EEC). The novel question resolved in Kompaktwerk v LivePerson was whether the same analysis applied to a time-limited subscription to a SaaS under the Commercial Agents (Council Directive) Regulations 1993. The court decided that the SaaS model: (1) does not involve a ‘sale’ (it is more akin to a rental of the software; and (2) involves the provision of services, rather than the sale of goods) as the customer is merely given access to a product held on a computer server. Written by Alexander Brown, barrister at One Essex Court.
Commercial analysis: Agency agreements can be written or unwritten. There is no requirement under English law that an agency agreement must be in writing. This lack of requirement is consistent with the position of most agreements under English law—formality is rarely a requirement. Written by Stephen Sidkin, partner at Fox Williams LLP.
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