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May 20, 2020

What's next | Agency arrangements

Continuing on our 'What's next?' series, agency arrangements is the featured topic for this video and article:


Agency arrangements can arise in a number of ways, but they all involve a level of trust and confidence. This is because the agent works on behalf of the principal as if it were the principal and has the ability to legally bind the principal to commitments made by the agent. If you are going to represent someone or have someone represent you it is important that you have a clear understanding of what the scope of that representation is and that the agent knows clearly what the principal intends in these uncertain times. 

What we are currently working through is unprecedented and so you can’t refer to historical conduct to know what to do. The assumptions underlying the agency relationship should be tested to ensure that both the agent and the principal are able to deliver on their obligations. For the purposes of this article, we have limited our discussion to express commercial representative type agency arrangements where the parties enter into an agency agreement but many of the same issues will arise in other agency relationships.

What are the assumptions and considerations when dealing with agency arrangements?

Agency arrangements are often long-term arrangements,where both parties make a substantial commitment to each other and which involve extensive cooperation between the parties. The trust and confidence required to ensure a successful agency relationship can be tested in these uncertain times. The knowledge of what the other will do and want to do in times that have no clear historical parallel is likely to be unclear. Where neither party is able to predict or plan for the unexpected effects of a global health crisis, it is key that the parties talk to each other and test their assumptions to ensure that the arrangement they put in place does have the ability to deliver on each of their expectations.

It's important to keep the conversation going on this and other topics we have covered in the series. We would welcome your observations so please feel free to get in touch.

Social media credit: Marvin Meyer

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