If your business hires agents to sell goods, you’ve likely encountered the Commercial Agents Regulations 1993. These UK regulations protect self-employed agents who sell or purchase goods on behalf of a principal business.
The UK government has recently reviewed these rules and decided to keep them unchanged, reaffirming their importance. In this newsletter, we answer some common questions about what these regulations are, why they exist, and what they mean for you as a business owner.
What are the Commercial Agents Regulations 1993?
The Commercial Agents Regulations 1993 govern the relationship between businesses (principals) and commercial agents (independent intermediaries who sell or purchase goods for the business). These include the agent's right to fair payment, compensation upon termination, and the principal’s duty to provide necessary information and act in good faith toward the agent.
Why were the regulations introduced?
Prior to the introduction of the Commercial Agents Regulations 1993, agents had limited protection and often relied on general contract law, leaving them vulnerable to unfair treatment or sudden contract termination. The Commercial Agents Regulations 1993 were introduced to address this by guaranteeing agents the right to termination compensation or indemnity, ensuring fair treatment when contracts end. These regulations also harmonised agency laws across the EU, providing consistent protections for agents and simplifying legal frameworks for international businesses.
Which businesses are affected?
Any business that uses a self-employed agent in Great Britain to sell goods, whether the goods are sold in the UK or internationally, is likely to be subject to these regulations. The regulations apply specifically to agents who work with goods (not services). Whether your business operates locally or overseas, if you engage agents in Great Britain to sell or purchase goods, these rules are likely to apply to you.
What key protections do the regulations provide?
The Commercial Agents Regulations include several important protections:
- Right to fair payment: Agents must be paid commissions promptly, based on the terms of their contract.
- Written contract: Agents can request a written agreement if one is not provided.
- Notice period: If the relationship ends, agents are entitled to a minimum notice period, which increases with the length of the contract.
- Compensation for termination: Agents may receive compensation if the relationship ends, recognising the goodwill they’ve built for the principal.
- Good faith: Both the principal and agent must act in good faith, ensuring transparent communication and support.
Why did the government review these regulations?
The government reviewed the regulations as part of its post-Brexit efforts to simplify or remove EU-derived laws. Some industry groups believed the regulations were too restrictive, while others, especially agents, argued that the protections were necessary. After gathering feedback in a consultation, the government decided in February 2025 that the regulations would remain unchanged, citing their importance in maintaining fair relationships between agents and businesses.
Are you meeting the requirements?
Since the Commercial Agents Regulations 1993 remain in force, businesses must be compliant. This means reviewing agency contracts to ensure they reflect the required provisions, such as commission terms and termination procedures. Understanding these regulations will help businesses avoid legal issues and maintain positive, fair relationships with agents.
How 3CS can help
At 3CS, we understand the complexities of the Commercial Agents Regulations 1993 and the importance of fair, compliant relationships with your agents. We can review your agency contracts to ensure they align with current regulations, protecting both your interests and those of your agents. With the recent government review confirming the continuation of these regulations, compliance is crucial. Contact us today to find out how we can support you.
