Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Agency definition

What does Agency mean? Agency describes the legal relationship by which one person (the agent) is authorised to affect a principal’s legal relations with third parties, typically by entering contracts or performing other legal acts on the principal’s behalf. It is a common law concept developed mainly through case law across England & Wales, Scotland, Northern Ireland and Ireland, with sectoral statutes in specific contexts (for example the Commercial Agents Regulations, the Partnership Act 1890 and companies legislation). Key features include authority (actual—express or implied—and apparent/ostensible), the principal’s ability to be bound or acquire rights through the agent (including by ratification),...

Agency and Distribution Compared: Legal Differences, Risk Allocation, Competition Law and Termination Rights, and Choosing the Appropriate Route to Market

Published by a LexisNexis Commercial expert

Practice notes

This Practice Note contrasts agency with distribution and includes a table outlining the principal legal distinctions between agents and distributors. It explains, in detail, how agents and distributors differ, examining their links with the relevant principal or manufacturer and assessing the relative risk profile attached to each type of appointment made. It also considers when an agency is preferable and the scenarios that favour distributorships.

Initial considerations

Agency and distribution are channels to market: routes by which a manufacturer, producer, or an intermediary, such as a wholesaler, delivers products in practice to end-user customers.

Other common routes to market also include direct sales (where sales staff are employed by the manufacturer, or the manufacturer sells remotely (eg via the internet)), forming a joint venture with a local enterprise, and franchising (which shares many characteristics in common with distribution).

For further details on franchising, see: Franchising—overview for guidance.

This Practice Note contrasts sales agents—who secure (and at times conclude) contracts with customers on behalf of their principal—with distributors. Sales agents also often manage marketing activity as well. Other familiar categories of commercial agent commonly include freight forwarding agents and media agents who act for media or sports personalities in particular...

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Web page updated on 21/05/2026

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