🟦 Check whether you are entering into agency agreements! 🟦
Businesses entering into agency agreements fall into three categories. Some understand the arrangement and its risks from the outset. Some learn about them only from former agents’ payment demands or lawsuits. Others remain entirely unaware because they have not encountered such claims… Yet.
🔵 How can you check whether you belong to the third group? ❓
Examine how you actually work with sales representatives. If the representative:
1️⃣ provides intermediation services for contracts with customers — in short, helps you conclude contracts or concludes them on your behalf;
2️⃣ does so on a continuing basis;
3️⃣ does so as part of their business activity*;
4️⃣ receives remuneration;
you have probably entered into an agency agreement.
🔵 The following do not determine the position:
1️⃣ the agreement’s name — the familiar argument “we do not use agency agreements, just ordinary service arrangements” will therefore generally not work;
2️⃣ remuneration taking the form of a fixed fee rather than commission;
3️⃣ the representative contacting only customers whose details you provided;
4️⃣ the representative acquiring few customers;
5️⃣ the representative operating through a company;
6️⃣ the absence of a written contract.
Agency provisions may still apply in all these situations. The position differs only where the sales representative performs their duties under an employment contract.
* Some agency provisions also apply where the representative does not operate a business.
