The investor’s field guide · C
Commercial agent
Someone with continuing authority to negotiate, or to negotiate and conclude, sales or purchases on a principal’s behalf, rather than buying and reselling in their own name.
Explained by the editorial team
A commercial agent acts for a business in a market, with authority to negotiate deals, or to negotiate and actually conclude them, in that business’s name. This is different from a distributor, who buys and resells at their own risk, and from a general representative, who may scout, attend and report with no authority to agree anything at all.
How it works
In the UK and the EU, the role carries specific statutory consequences once someone meets the legal test, under the Commercial Agents (Council Directive) Regulations 1993. A genuine commercial agent is entitled to minimum notice before termination and to compensation or an indemnity for the business they built up, regardless of what the contract calls them. Some countries go further and restrict who may formally hold the role at all, for example by nationality or local registration.
What to examine
Check what authority the person actually has to negotiate or sign, not the title in the contract, since courts and regulators look at substance. Confirm the termination terms that apply under the law actually governing the relationship, and check whether the country concerned restricts who may be a registered agent before appointing anyone. Rules vary by country and change, so confirm the current position locally before relying on this.
General information, not investment, legal or tax advice. Examples are illustrative. Read the disclaimer.