What is an Agency Agreement
An agency agreement is a legal contract creating a fiduciary relationship whereby the first party (the “Principal") agrees that the actions of a second party ("the Agent") binds the principal.
In other words, the Agent, on behalf of the Principal, can enter into agreements with clients/customers that creates a contractual relationship between the Principal and the client/customer and the Principal is required to perform under the Agreement.
Generally, the agent must act in good faith and in the principal's best interests to achieve the principal's desired goal.
When do I need this?
An Agency Agreement must be distinguished from a Distribution Agreement. With a distribution agreement, the first party (the “Supplier” / “Manufacturer”) agrees to supply/sell certain products to the second party (the "Distributor"), who then sells these products to customers. The distributor concludes a contractual relationship with a client/customer and the distributor is responsible to perform under the agreement.
Do I need a legal expert to assist?
If you require provisions relating to the exclusivity of the mandate, any restraint that must be placed on the Agent after the relationship comes to an end or provisions relating to the governance of Intellectual Property, we recommend that you involve one of our Contract Experts to assist with the review of the Agreement.