Check the Local Laws
Before entering into an agreement with an agent or distributor overseas, you need to do some research on the law in the territory where he or she is based. In some countries, for example, there are rules that require agency agreements to be registered with a Government department or that stipulate only nationals of the country can become an agent of a foreign supplier.
So, before signing anything, get some local legal advice early on to cover:
- Who is entitled to act as an Agent? – is this confined to a national or company owned by nationals of the State or can a foreigner act as your agent?
- What are the basic legal rights of the Agent and the Principal?
- What are the rules concerning termination of the Agency?
- Are there any registration procedures?
- Does the law distinguish between agents and distributors? In Europe, the rules only apply to agents but in some countries of the Middle East, the distinction is blurred and a distributor might have the same termination rights as an agent.
You might think that the issues mentioned above can be avoided, if you say English law will govern the agreement with your agent. Unfortunately, it is not so simple and the local courts or even the legislation may take a different view.
More information on the specific terms you should consider in your contracts, and two contract templates, are given in the Exporting Made Easy book.
Using Contract Templates
Templates for business agreements are widely available on the web and can be used to protect your interests whilst reducing your outlay significantly. You should always get local legal advice for the reasons outlined above.Templates can also help you understand the factors you need to consider before proceeding with a new partner or agent, and are a really useful way to educate yourself on legal and commercial matters for particular business relationships.
ContractStore has a wide selection of contract templates. All the documents are ready to buy online and download to your PC. Among ContractStore’s catalogue of more than 250 contract templates, here is a sample selection of specifically export-related and cross-border documents:
- A101 Agency Agreement Template (favouring the principal)
- A115 Representation Agreement (Tendering Contract)
- A117 Distributorship Agreement (favouring the Principal)
- A132 Commission Agreement
- A134 Licence for Manufacture Overseas
- A184 Manufacture & Supply Agreement
- A138 Long Term Supply Agreement
- IN007 Power of Attorney for General Manager (India)
- E109 Expatriate Contract of Employment
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