Agency and distribution agreements

Looking to appoint an agent or a distributor?

Getting goods or services to market is the lifeblood of a business. Adopting the approach which suits you best from the various options is critical. Agents, distributors and franchisees can bring sector or geographical experience and contacts. They save the investment which would be necessary in establishing a selling business. (Further information about franchising).

There are crucial differences between agents and distributors. Briefly, an agent is an intermediary, arranging the deal between the seller of the goods or services (the principal) and the purchaser whilst a distributor purchases the goods from the principal and re-sells them to its own customers, with more freedom.

Our commercial team at Hill Dickinson can advise you on choosing the route which would more be suitable for you. Typical considerations include:

• How much control do you require over the sales terms, advertising and after-sales care?
• Can you accept making a payment on termination of the arrangement?
• Will you retain house accounts or reserve certain territories for yourself?

It is worth taking specialist advice, especially as competition law has a vast influence over certain aspects of these agreements. Hill Dickinson's commercial team can guide you through these issues. Typical concerns can include:

• How much influence can you exert over your agent or distributor?
• Can you restrict sales to specific territories?
• Can you restrict your agent or distributor from selling competing goods or products?
• Do the same rules apply online?

Certain UK and European agents are entitled to a number of protections, including a payment on termination. We can advise you on choosing the more beneficial type of termination payment depending on your circumstances. We can also draft and advise on agency agreements for you, whether you want a bespoke agreement for a particular agent or a standard document to be used across the board.

Are you an agent or distributor, looking for advice?

In addition to our work for principals, Hill Dickinson's commercial team have a great deal of experience acting for agents and distributors. Our experience of working for both sides gives us an ideal understanding of the strategic approach that the principal may adopt, as well as the critical parts of the deal.

As an agent or distributor you may be at the start of a long and fulfilling arrangement. We see our role as helping you to lever your commercial advantage, assisting you in identifying the skills, contacts and knowledge that will prove invaluable to the principal. At that stage, we can advise you on the commercial terms of the agreement and assist, to the extent you want us to, in your negotiations to obtain the best possible deal.

If your arrangement has come to an unhappy end and you are looking for compensation for loss of the agency, we can advise you on this and other entitlements of which you may not be aware.

How Hill Dickinson can work with you

Whether you are a principal considering the use of agents or distributors for the first time or are looking to review your current arrangements, or whether you are an experienced or potential agent or distributor, we will tailor our response to your specific needs and requirements.

Whilst our direct involvement may end at the signing of an agency or distribution agreement, we understand that this stage is the beginning of a long and productive working relationship for all involved in the process. We bear this in mind at all stages for our advisory role - during drafting, negotiation and advice - so that you can reach a commercial agreement which benefits you and the other party, allowing you both to build a sustainable future.