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Agency Agreements

Many companies now use the services of another company to represent them as their agent on their company matters. To do this, the company has to make an agency agreement. In the case of a sales buying agency agreement, for instance, the contract will state that the agent is to act as the sales representative of the company whether or not it’s an exclusive relationship; the process for terminating the agreement; the manner of calculating commissions; and more.


Benefits and risks of an agency agreement

Generally, there are two parties involved in making an agency agreement. First, is the agent authorised to represent another person, the principal, to perform actions and decisions on behalf of the latter? A legal relationship is created between these two parties when the principal assigns the representation to the agent.


These days, agencies have become the norm for companies because they eliminate the burden of dealing directly with specific issues. As a result, an agency agreement becomes essential when dealing with an agent who will conduct business and make decisions on your behalf over time. For example, an agent can be a vendor, lawyer, accountant, and so on.


The benefits

An agency agreement template can offer numerous benefits, especially for small-business owners. However, let’s face it; not all people have the right skills and knowledge needed to operate a business. Therefore, it becomes essential to seek the services of a professional who would act as their representative and conduct business matters more efficiently.
Having an agent can make things easier for the principal as this is a convenient way to handle specific business affairs. But the need for an agency agreement may also arise out of necessity.


For instance, if the principal gets confronted with a legal issue, he would most likely need a qualified lawyer to represent him. If hiring such a lawyer is part of an exclusive agency agreement between the principal and the lawyer, then the latter has the authority to act on the principal’s behalf.


The risks

As with any other type, an agency agreement also comes with risks. For one, having an agent represent you in business dealings has drawbacks. In addition, since the agent is the legal representative of the principal, any misconduct that the agent gets involved in will reflect on the principal.


A simple example can illustrate this point. Being a principal representative, the agent can enter into a contract without the knowledge of the principal, thus, making the principal liable for all of the contract’s terms and conditions even if he hasn’t read it. Having given the agent the authority makes him hold the ultimate responsibility.


In writing the agreement, therefore, the principal should indicate the limitations of the liabilities in the most straightforward terms and conditions while using outright language. This protects the principal if the agent performs an illegal or unauthorised activity.


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How to utilise an agency agreement?

A principal initiates the agency agreement; a principal who’s looking for an agent that would handle specific services for his business. The document is an information sheet containing pertinent details about both parties, the principal and the agent. It also describes the kind of business the principal engages in.


The agency agreement template defines specific essential characteristics of the agreement that will exist between the principal and agent. Such information includes the duration of the agency, fee information, and why the principal required an agency.


The duration of the agency refers to the length of time that the principal needs the agent. The length may even refer to the principal allowing the agent to continue and complete the services or the service ending at a specified date.


After filling out all the relevant information supplied by both parties, the agreement is printed out, and both parties sign it. Keep copies of the agreement on file for the duration of the contract, including a reasonable period after that. This agreement outlines the expectations of the principal and agent before their agency relationship commences.


Factors to consider in agency agreements

Another definition of an agency agreement is the “relationship involving authority or capacity in a person, the agent, to create or affect legal relations between another person and third parties.” Sounds more professional but still means the same thing. Generally, an agency comes into existence in the following ways:

  • through an agreement;
  • through operations of law; or
  • through ratification

There are different types of agencies and will require a separate agency agreement. There will always be good agreements and bad ones. The bad ones are usually written by those who, in their excitement, have become blinded to the corruption of several agency agreements.

Let this be a warning to those about to agree with agents. Keep these things in mind when you deal with agency agreements:



All remittances should get paid through the author within thirty days of receipt by the agent. Expect some charges from the bank, especially on foreign payments. The essential point here is that the author must take control of these payments if that is how the agreement defines it.


As a standard practice, agents aren’t supposed to charge additional costs. But many of these agents still include fees for specific activities like purchasing extra copies, photocopying for submission, etc. So again, the agreement should provide clarity on this matter, especially in terms of deductions and whether or not you obtained the approval of these charges.


This may be a tricky subject, but submissions are now made through emails, and huge postage charges have also desisted, so there should be no reason for agents to make deductions for postal costs. Another item you need to clarify in an exclusive agency agreement is the agent’s commission.


Rates can range from 10% – 20%. In most cases, the rate is 15% for all income or a different percentage rate for payment from other sales.



The principal should always receive notification for each submission. Although he may not have approval for the submission, it usually is customary to get consulted about it. Any agreement with the publisher must be subjected to the author’s permission since he’s the signatory of each agreement unless he agrees otherwise.


It’s never a good idea to grant an agent power of attorney

It would be best if you never delegated the signing of contracts to agents, even in cases where you’re out of town or the country where there’s a need for a power of attorney. Think twice before issuing a power of attorney, as this document is a potent tool.
Make sure that the agent is never granted the rights to a book. There have been instances when the author separated from his agent. However, the latter still holds the rights to the author’s book and undoing this predicament is a challenging task, all because of a power of attorney.


You can avoid this by denying the agent rights over any unsold book or other kinds of rights like foreign translation rights or film rights to a book that an agent worked on, on the author’s behalf.



There are many instances where the relationship between the author and agent does not work out, and to get out of this situation, there needs to be a termination clause in the agency agreement. This clause usually carries with it a time frame notice which is generally between one to three months.

Any contracts that the agent negotiated will remain in place. Also, he will receive the agreed-upon commissions for such agreements. The termination clause is a standard part that you should always take seriously. Also, remember that no agreement can get altered without the agent’s agreement.



Keep in mind that any agency is a business which can be either bought or sold. So what happens, and what would you feel if the agency representing you get sold to a third party? It might make you feel like you lost one of your “assets.”

Include a non-assignment clause in your agency agreement to ensure this does not happen. This means that if the agency gets sold, it cannot assign your rights to the contract to the third party. Although this isn’t a standard clause, it’s essential since more agencies nowadays are getting sold or choosing to join forces.


Looking for and finding the right agent to represent you on business matters could be a delight. That is, as long as you feel happy and comfortable with them professionally and personally. Have the time to personally meet your agent and ask him any questions you wish, even if they border on the inane.


Don’t rush with your selection. Instead, take as much time as you need until you’re sure you made the right choice. After completing the agency agreement, this could start a very long-lasting business relationship.



Sometimes all that’s needed is a form, document or tip that can solve problems or issues that repeat in your life or business. To save you from unnecessary legal costs by hiring a lawyer(s), here are customisable smart templates/forms that you can use as often as you need; they are flexible enough to allow for changes without exposing you.


In many cases, when visiting our website, you will be able to solve your legal and business problems in 20 minutes without ever contacting even our lawyers! You can do it the old-fashioned way, but it’s much more fun doing it remotely and saving you costs! If you need our help, kindly follow the following instruction:


For our ONLINE legal and business services, please follow these instructions:

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Click the following links below to search for the desired template, download it and embark on your great legal adventure – and don’t forget to bring the bug spray.  For each template, we have numerous different customisable documents.


We aim to facilitate the resolution of legal and business problems in twenty minutes without ever contacting even our lawyers.  Of course, the old-fashioned way works, too, but it is much more fun doing it remotely without incurring legal fees.


You might order via the AGENCY AGREEMENT link for our premium paid online services.



















Our passion for helping people and business owners succeed inspired us to come up with these high-quality, customisable documents. The core idea has always been to provide a service that offers a big bang for the buck.  (Translation: HUGE value for a small price.) Note: We charge a small fee to customise the template, specific to the document type.


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