As a business owner, you may find yourself in a situation where you need to engage the services of an agency to help promote and grow your business. In such a case, it’s important to have an agency agreement in place that outlines the terms of your engagement with the agency. In New Zealand, agency agreements are regulated by law and it’s important to understand your rights and obligations under these agreements.
What is an agency agreement?
An agency agreement is a legal arrangement in which a business (the principal) engages the services of another business or individual (the agent) to act on their behalf. The agent may be engaged to perform a range of functions including marketing, sales, or negotiating contracts. Agency agreements are common in industries such as real estate, where agents are engaged to sell properties on behalf of the owner.
What are the key elements of an agency agreement?
A well-drafted agency agreement should clearly outline the scope of the agent`s authority, the nature of the services to be provided, the duration of the agreement, and the payment terms. It should also include provisions covering termination of the agreement, confidentiality, and intellectual property.
Under New Zealand law, an agency agreement must be in writing and signed by both parties. The agreement should also comply with the Fair Trading Act and the Consumer Guarantees Act.
What are the obligations of the agent?
Agents have a duty to act in the best interests of the principal and to avoid conflicts of interest. They should not accept any payments or gifts from third parties that may influence their decisions. Agents are also required to maintain accurate records of their transactions and to provide regular reports to the principal.
What are the obligations of the principal?
Principals have an obligation to provide clear instructions to the agent and to pay any fees or commissions as agreed. They should also ensure that the agent has the necessary resources to perform their duties and that they are complying with all relevant laws and regulations.
What happens if the agency agreement is terminated?
The agency agreement may be terminated by either party on notice or in accordance with any termination provisions set out in the agreement. Upon termination, the agent may be entitled to any unpaid fees or commissions as specified in the agreement. The agent may also be required to return any property or confidential information belonging to the principal.
Conclusion
Engaging the services of an agency can be beneficial for businesses looking to grow and expand their operations. However, it’s important to have a well-drafted agency agreement in place that outlines the terms of engagement and ensures compliance with New Zealand law. By understanding your rights and obligations under an agency agreement, you can protect your business and ensure a successful partnership with your chosen agent.