This law matters when a business uses external sales agents to negotiate or conclude sales of goods. The costly surprise is termination compensation. A contract that calls someone a consultant or introducer will not always avoid the Regulations if the real role is commercial agency.
Main laws
United Kingdom Regulation
Commercial Agents (Council Directive) Regulations 1993
The Commercial Agents Regulations give certain self-employed sales agents rights, including notice and compensation or indemnity on termination.
In forceUnited KingdomPlain-English guide4 practical checks
Plain-English explainers, not legal advice. Use the linked official source for section-level detail, and get advice for your situation.
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Quick read
- This law matters when a business uses external sales agents to negotiate or conclude sales of goods.
- The costly surprise is termination compensation.
Likely relevant if
- Businesses using sales agents for goods
- Manufacturers and importers
- Distributors appointing independent representatives
Check first
- Check whether the agent's real role falls within the Regulations
- Set commission, territory, authority and reporting rules clearly
- Plan notice, pipeline commission and termination compensation before exit
What this means in practice
Key points
- Agency termination can be expensive even where the contract is short.
- Commission mechanics should say what happens to pipeline orders.
- Using the wrong label is not a reliable risk control.
When this law usually matters
Most businesses do not need to memorise the whole law. The useful starting point is to know when it is likely to affect a contract, customer journey, employee process, data flow or company decision.
Key points
- Businesses using sales agents for goods
- Manufacturers and importers
- Distributors appointing independent representatives
- Businesses terminating agency arrangements
What to check first
Sense check
- Check whether the agent's real role falls within the Regulations
- Set commission, territory, authority and reporting rules clearly
- Plan notice, pipeline commission and termination compensation before exit
- Keep evidence of customers introduced and sales generated
Documents and workflows to review
Key points
- Sales agency agreement
- Commission schedule
- Territory and customer list
- Termination notice
- Pipeline sales report