Agency Agreement Law

Despite the convenience and need for agency agreements, there may be some drawbacks. The main risk in the legal relationship between the client and the agent is that the adjudicating entity may be held liable for a fault committed by the agent. When an agent makes an error or engages in illegal activity while representing the client, the client can be considered technically as the act, since the agent essentially acted as the “main” obligatory. The termination terminates the agency contract. None of the parties can claim to be accomplished. The party terminating the agency contract without respecting its duration or respecting the legal or agreed notice (and without the consent of the other party) is required to pay damages, unless the termination takes place for an urgent reason that is immediately notified to the other party. For the purposes of article 101, paragraph 1, the agreement is referred to as an agency agreement where the representative does not support or assume any risk related to contracts concluded and/or negotiated on behalf of the contracting entity with respect to market-specific investments in this area of activity and other activities that the awarding entity is required to carry out in the same product market. However, risks associated with the provision of agency services in general, such as the risk that the representative`s income will depend on his or her success as an agent or general investments in premises or staff, are not essential to this assessment. Therefore, for the application of Article 101, paragraph 1, an agreement is generally considered an agency agreement where the ownership of the goods purchased or sold is not the responsibility of the representative or when the representative does not himself provide the contractual services and the representative: a final, but certainly not negligible, aspect of the agency contract is the question of what right applies to the relationship between the representative and the client.

The main rule is that the agency contract is governed by applicable law in the country where the agent is established or established. In the agency contract, the parties can agree that the contract is governed by another legal system. In the event of a breach of an agency agreement, an action may be taken and compensation may be given to the uninjured party.