Expanding your business through agents or distributors can be a powerful way to grow your market reach—but it’s essential to have the right legal framework in place.
Before entering into any agreement, it’s important to understand the key differences between agency and distribution models. Each carries distinct legal implications, risks, and benefits. We’ll guide you through your options and help you choose the structure that best supports your commercial goals.
An agent acts on your behalf to introduce or refer customers to your business, typically in return for commission. The contract for goods or services remains between you and the end customer—meaning you retain liability under the contract and may also be liable for the agent’s representations.
You can authorise your agent to negotiate or even enter into contracts on your behalf, and you may also define their geographical territory to suit your sales strategy.
Agency agreements must comply with the Commercial Agents Regulations 1993, which include:
• The agent’s right to a written agreement
• Entitlement to commission
• Minimum notice periods for termination
• The right to compensation or indemnity upon termination
We ensure these terms are clearly addressed to protect your business from unexpected liabilities.
A distributor purchases your goods or services and resells them to the end customer, earning a profit through mark-up. In this case, your contract is with the distributor—not the end customer—reducing your exposure to liability.
Distribution agreements can include:
• Geographical sales restrictions
• Minimum purchase requirements
• Pricing controls
• Restrictions on selling competitors’ products
• Termination clauses and liability limitations
We tailor these agreements to reflect your commercial strategy and risk appetite.
Agency agreements offer greater control over pricing and customer relationships, but may involve compensation obligations upon termination. Distribution agreements shift more risk to the distributor and typically involve fewer post-termination liabilities.
We’ll help you weigh the pros and cons of each model and draft agreements that align with your business objectives.
• Clear, commercially focused legal advice
• Extensive experience in drafting and negotiating agency and distribution agreements
• A deep understanding of the legal and practical implications of each model
• Recognised in the Legal 500 and awarded the Law Society Mark of Excellence
Our specialist commercial lawyers offer a one-stop-shop for legal advice for all types of business – from start-ups to established companies.
All of our lawyers are specialists in their area of law. Book in for an initial discussion where we will discuss all of your options with you.
