UKFT Associate Member Fox Williams explores why written fashion agency agreements can offer a high a higher degree of certainty for both the principal and the agent involved.

Agency agreements in English law can be either written or unwritten, with no strict requirement for written documentation. However, opting for a written agreement can provide a higher degree of certainty for both the principal and the agent involved, explains Stephen Sidkin, a commercial law partner at UKFT Associate Member Fox Williams LLP.

While the flexibility of unwritten agreements exists, certain obligations are automatically imposed by the Commercial Agents Regulations, regardless of whether the agreement is written or not. These regulations restrict the ability to opt out of specific obligations and duties.

Uncertainty can arise from poorly drafted or vaguely worded provisions in written agreements, especially concerning obligations to act dutifully and in good faith, as defined by the Commercial Agents Regulations and the EU Agents Directive.

Court interpretations of these regulations are limited, allowing room for principals and agents to clarify and expand on general obligations within their written agreements. Recent judgments have introduced new considerations regarding commission payments and termination compensation, adding complexity to agency agreements.

Ambiguities in language within agreements can lead to costly disputes, such as the obligation to pay commission on goods sold. Principals may withhold commission if the buyer fails to pay, but this stance may vary based on the specifics of the agreement and applicable regulations.

Conflicts of interest may arise when an agent represents principals with competing products, necessitating explicit consent from all parties involved to prevent breaches of contract.

Written agreements often contain boilerplate clauses, including “no oral modification” clauses, which prevent oral agreements from altering the terms of the written contract. The UK’s Supreme Court has upheld the validity of these clauses, emphasizing the importance of adhering strictly to written terms.

Additionally, both principals and agents have the right to request a signed written document outlining the terms of the agreement, as per the Regulations, enabling parties to clarify and confirm their mutual understanding.

In conclusion, while English law permits unwritten agency agreements, opting for a written agreement offers greater clarity and protection for both parties involved, particularly in navigating complex regulations and potential disputes. Clarifying specific obligations and terms within written agreements can mitigate uncertainties and foster a more harmonious business relationship.

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UKFT’s Associate Member Fox Williams can provide specialist advice on working with agents and distributors in UK and internationally; as well as a wide range of legal services for the fashion industry, from designers through to retailers. Find out more about Fashion Law, Agent Law or visit the Fox Williams website.

For a UKFT introduction to Fox Williams, email info@ukft.org

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