In the context of the CARs, a “commercial agent” is an individual, partnership or company employed by a principal who has continuing authority to negotiate the sale or purchase of goods, or negotiate and conclude such transactions, on behalf of the principal and in its name. The protection of the CARs does not extend to arrangements for the sale / purchase of services.

Where the CARs apply, they provide certain protections and implied terms for agents recognising their typically “weaker” bargaining position compared to principals. Many of these provisions are mandatory and cannot be contracted out of. The key protections include:

• Right to a written contract.
• Minimum termination notice periods for agreements for an indefinite term, which cannot be shortened by agreement.
• Roles and responsibilities on the parties which supplement the parties duties under common law, such as a duty to act dutifully and in good faith towards the other and to communicate to each other all necessary information.
• Post-termination non-compete clauses must be in writing, relate to the geographical area covered by the agency, last no longer than two years and comply with competition laws.
• Remuneration and commission – provisions related to calculation of commission and when or how it is paid, including if the contract is silent on that matter. An agent may also be entitled to commission on transactions concluded after termination.
• Payments payable to the agent on termination, for example on the retirement or death of the agent or because the principal has terminated the agency without cause or for a non. Aside from outstanding and pipeline commissions, these can be either on the compensation or indemnity basis – the agent’s default right to compensation or option of an indemnity on termination of the agreement in certain circumstances.