Agency Agreement in United Kingdom: Template, Key Clauses and Local Law (2026)

An agency agreement in the United Kingdom appoints an agent to act for a principal, usually to negotiate or conclude sales of goods on the principal's behalf. The UK has a specific regime for many agents, the Commercial Agents Regulations, which gives agents rights that cannot be removed by contract. This guide focuses on the law of England and Wales. ## The local law that applies - Commercial Agents (Council Directive) Regulations 1993 (SI 1993/3053). These protect a self-employed commercial agent who has continuing authority to negotiate, or to negotiate and conclude, the sale or purchase of goods on behalf of a principal. They survived the post-Brexit review of retained EU law, and the Department for Business and Trade confirmed in February 2025 that they remain in force without amendment, now classed as assimilated law. Key points: - The agent is owed good faith and proper information, and is entitled to commission on deals during the agency and, in some cases, after it ends. - Minimum notice periods apply for agreements with no fixed term (one month in year one, two in year two, three from year three). - On termination the agent is usually entitled to compensation or indemnity. The default in the UK is compensation unless the contract clearly provides for indemnity. This right cannot be waived to the agent's disadvantage before the agency ends.

• General contract and common law of agency applies to agents that fall outside the Regulations, for example agents dealing in services rather than goods.
• Competition law: the Competition Act 1998 can reach restrictions in agency arrangements. The Regulations only cover goods, not services, and have some exclusions. Confirm whether your agent is in scope before drafting, and check the current text. This article is general information, not legal advice. ## Key clauses in a UK agency agreement - Appointment and scope: the goods, the territory, and the agent's authority (to negotiate only, or to conclude contracts).
• Exclusive or non-exclusive rights in the territory or customer group.
• Agent duties: good faith, proper effort, reporting, and compliance with instructions and law.
• Principal duties: good faith, providing documents and information, and notice of expected volumes.
• Commission: rate, when it is earned and payable, deals after termination, and commission statements.
• Term and notice: fixed term or indefinite, with notice periods at least matching the Regulations.
• Termination payment: state whether compensation or indemnity applies on termination, remembering the compensation default if the contract is silent.
• Confidentiality and data protection (UK GDPR and the Data Protection Act 2018).
• Restraint of trade: a post-termination restriction is valid under the Regulations only if it is in writing, limited to the agent's goods, territory and customers, and lasts no more than two years.
• Governing law and dispute resolution. ## A simple agency agreement skeleton 1. Parties and recitals

2. Appointment, goods and territory
3. Authority and exclusivity
4. Agent duties
5. Principal duties
6. Commission and statements
7. Term and notice
8. Termination and compensation or indemnity
9. Confidentiality and data protection
10. Post-termination restrictions
11. Governing law and dispute resolution
12. General provisions ## Common mistakes to avoid - Assuming you can contract out of the Regulations. You cannot remove the agent's core rights to the agent's disadvantage.

• Staying silent on compensation versus indemnity, which leaves the costly compensation default in place.
• Writing a restraint of trade longer than two years, which the Regulations will not enforce.
• Treating a services agent as if the Regulations apply, when they cover goods only.
• Short-changing the minimum notice periods, which are set by the Regulations. ## Doing this across many contracts Principals that run many agent relationships across territories benefit from keeping drafting, review, versioning and signing in one place. A single AI contract workspace such as Adira can store approved templates, flag missing or risky clauses, and keep a clear record of every version, so each appointment starts from a trusted base. Adira is built around Indian law first, and deeper United Kingdom coverage is on its roadmap, so for UK-governed agency agreements use it as a drafting and review aid alongside local counsel. This guide is general information and not legal advice. Confirm the current law of England and Wales, and have a qualified UK lawyer review any agency agreement before signing.