176 Chapter 6Agency
Example
Three years ago Peter, an artist, agreed that Alice should try and sell his paintings. Peter is
not good at negotiating and agrees that Alice should sell the paintings for as much as she
can. Alice is paid 10 per cent commission on paintings sold, and has exclusive rights to sell
Peter’s paintings. Over the three years Alice has devoted more and more time to selling
Peter’s paintings and has built up a number of clients who purchase Peter’s paintings from
her. When paintings are sold, Alice makes it plain that Peter is the seller and cheques are
made out to Peter. Alice is a self-employed commercial agent.Rights given to self-employed commercial agents
The rights given to self-employed commercial agents are as follows:
(i) to a customary or reasonable amount of remuneration, if no remuneration has been
expressly agreed;
(ii) to commission on deals which the agent has set up;
(iii) to have the principal act dutifully and in good faith;
(iv) to be given relevant documentation relating to goods bought or sold;
(v) to be given information necessary for the agent to perform his contract, and in particular
to be warned if the principal expects the level of commercial transactions to fall away;
(vi) to be informed of deals which the principal makes, including a right to inspect the
principal’s books, and
(vii) to be informed, within a reasonable time, of any acceptance, refusal or non-execution
of a commercial transaction which the commercial agent procured for the principal.Duties which the Regulations impose on the agent
The duties which the Regulations impose on the agent are as follows:
(i) to look after the interests of his principal;
(ii) to act dutifully; and
(iii) to act in good faith.
To fulfil these duties, the Regulations say that the agent will in particular need to:
n make proper efforts to negotiate and, where appropriate, conclude the transactions he is
instructed to take care of;
n communicate to his principal all the necessary information available to him; and
n comply with reasonable instructions given by his principal.
With the exception of the agent’s rights to compensation, remuneration and to inspect the
principal’s books, the rights and duties set out in the Regulations cannot be excluded by
agreement between the parties.Termination of agency
An agent acts for a principal on account of having the principal’s actual authority to do so
(although an agent can make a principal liable on account of having apparent authority or
authority under Watteauv Fenwick). Apart from some exceptional circumstances which