This guide is maintained as a current resource for September 2026 and covers only the laws of England and Wales. Information is for general guidance, not legal advice. Consult a qualified solicitor for advice specific to your situation.
A comprehensive guide on how to claim for breach of an agency agreement in England and Wales. Learn about contractual and statutory rights, remedies including damages and compensation under the Commercial Agents Regulations, procedural steps, time limits, and practical considerations for agents and principals.
An agency agreement is a commercial contract where one party (the agent) is authorised to act on behalf of another (the principal) in business dealings. These relationships are common across different industries, such as sales representation, import/export operations, and commercial distribution arrangements. When one party fails to perform its contractual obligations, a breach of the agency agreement can occur, potentially giving rise to legal claims. This article explains how claims for breach of agency agreements work in England and Wales, including rights, remedies, legal processes and practical considerations.
Understanding Agency Agreements and Breach
An agency agreement sets out the terms under which an agent acts for a principal. It typically includes:
- The scope of authority and tasks the agent can undertake.
- The commission, fees, or remuneration due to the agent.
- Duties owed by the agent to the principal, such as acting with care, skill, good faith and loyalty.
- Obligations of the principal, such as paying commissions or providing necessary information.
A breach of an agency agreement occurs when one party fails to fulfil its contractual obligations without lawful justification. Examples include persistent failure to pay commissions, acting outside authorised territory, or failing to provide information required for the agent to perform duties.
Where an agency agreement relates to the commercial sale of goods, the Commercial Agents (Council Directive) Regulations 1993 (SI 93/3053) (“Commercial Agents Regulations”) may apply, providing additional statutory rights and remedies beyond common law contract principles.
Common Legal Grounds for Claims
1. Breach of Contract
Under ordinary contract law, a claimant (either principal or agent) can bring a claim for breach where the other party fails to perform agreed duties. The contract's written terms, or implied duties recognised by law, will determine whether the conduct is a breach. If the court finds a breach, it may award damages to compensate for financial loss caused by that breach.
2. Breach of Fiduciary Duties
Agents often owe fiduciary duties to their principals, meaning they must act honestly, in good faith and avoid conflicts of interest. A serious breach of these duties can justify repudiation of the agreement and may give rise to remedies such as forfeiture of an agent's contractual remuneration and recovery of profits made in breach of duty.
3. Statutory Claims Under the Commercial Agents Regulations
If the Commercial Agents Regulations apply, an agent may have statutory rights to compensation or indemnity when an agency agreement ends. These rights are separate from contractual breach claims and compensate the agent for the loss of the agency's value or goodwill.
An agent must give written notice of intention to pursue compensation or indemnity within one year of termination of the agency, and normally has six years from the breach to raise a court claim for contractual or statutory remedies.
Remedies Available for Breach
Damages
Damages are monetary compensation intended to put the claimant in the position they would have been in if the contract had been properly performed. This may include loss of commission, loss of profits or other financial losses directly resulting from the breach.
Compensation or Indemnity Under Statute
Where the Commercial Agents Regulations apply, an agent may be entitled to compensation (the default) or an indemnity (if provided for in the contract) on termination of the agency, reflecting the value lost by reason of termination. Compensation is generally based on the open market value of the agency, while indemnity is usually capped at one year's average commission.
Specific Performance
In limited circumstances, the court may order specific performance, requiring the breaching party to carry out its contractual obligations rather than simply paying money. This is more common where the subject matter of the contract is unique or damages would be inadequate.
Injunctions and Accounts
A court can grant an injunction to prevent ongoing breaches, such as unauthorised use of confidential information. It may also order an account of profits, requiring the breaching agent to account for and pay over profits received as a result of the breach.
Steps to Make a Claim
1. Review the Agency Agreement and Evidence
Carefully review the written agency agreement to identify the parties' duties and the protections available. Collect all relevant documents, such as correspondence, commission statements, sales records and notices of termination or breach.
2. Pre‑Action Communication
Before lodging a court claim, send a Letter Before Action setting out:
- The nature of the alleged breach.
- The remedy sought (damages, compensation, indemnity, etc.).
- A reasonable deadline for response.
This formal step helps satisfy pre‑action protocols and may encourage settlement without litigation.
3. Issue Court Proceedings
If discussions fail, issue a claim in the County Court or, for higher value or complex cases, in the High Court. Your claim should:
- Quote the relevant contractual or statutory provisions.
- Set out facts demonstrating breach and losses suffered.
- Identify the remedy sought.
Court fees and procedural steps vary according to the value and complexity of the claim.
4. Present Your Evidence
At court hearings, present clear evidence of the breach and losses. This may include financial records, expert valuations (for compensation), and contractual documents.
Time Limits and Limitation Periods
Under the Limitation Act 1980, a claimant generally has six years from the date of breach to bring a claim for breach of an ordinary contract. For statutory claims under the Commercial Agents Regulations, the agent must give notice within one year of termination, and limitation principles also apply to any subsequent court action.
Risks and Practical Considerations
- Proving Losses: Quantifying damages, compensation or indemnity can be complex and often requires expert evidence.
- Statutory vs Contractual Claims: Claims under the Regulations may provide different remedies and valuation methods than ordinary contract claims.
- Settlement and ADR: Alternative dispute resolution such as mediation can reduce costs, delay and the adversarial nature of litigation.
Key Takeaways
Claims for breach of an agency agreement in England and Wales involve identifying the breach of contractual or statutory duties, gathering evidence, and pursuing appropriate remedies such as damages, compensation or injunctions. Where the Commercial Agents Regulations apply, agents have additional statutory rights to compensation or indemnity on termination of the agency. Acting promptly, following pre‑action protocols, and understanding limitation periods and remedies are essential to an effective claim.
