Commercial Law, the Commercial Agents Regulations 1993 - Essay Example

CONSUMER LAW By Location Commercial Law Part The Commercial Agents Regulations 1993 is legislation in Britain that sought to safeguard the interests of agents that act on behalf of a principal through a third party relationship. Commercial agents have substantial rights accorded to them by this regulation that are not enjoyed by employees. The regulation came into the UK in line with the law of agency that applied to all EU member states. The regulation defines a commercial agent as an individual that is self-employed and has the authority to make purchases and sales negotiation on behalf of a principal, which appears to be the engagement that Rosie had with Simon. Once the terms of an agency agreement have been made, it is important to draft a written contract that any of the parties involved can request, which would state the duration of the contract among other things. An agency agreement usually contains the fixed term of the contract, exists for an indefinite term that is terminable and lastly a fixed term that can be extended if agreed by both parties1. In relation to Rosie and Simon’s case, the parties did have a written contract or agency agreement that did not state the terms of their contract in detail. The implication of this is that it might be difficult for Simon to prove that Rosie went against the terms of the contract that they had agreed upon through the written agency agreement. Additionally, Rosie is in breach of the contract they agreed upon with Simon because she did not give Simon the 10% commission that they had agreed on when he sold a piece of work for her. In order for Simon to be safe, he would have made sure that he drafted a contract that captured much detail on how he was to make money out of the contract. For this reason, Rosie could be entitled to not pay Simon. On the contrary, the Commercial Agents regulation requires that either of the parties wishing to terminate an agreement entered for an indefinite period issue adequate notice to the other party, which Rosie did not comply. The regulation requires that a person provides notice of termination depending on the period they have been in the contract. For example, if they have been in the contract for a year, they should issue a one months’ notice, two years attracts a two months’ notice and so on. Therefore, Simon has grounds to seek compensation for the breaching of the contract that he had entered into with Rosie based on not being issued with proper notice. The regulation requires that a principal act dutifully to the agent and in good faith to which she did not oblige to and instead intended to dupe Simon his earnings. Rosie also did not inform Simon of an anticipated decline of sales volumes at some point of their contract, which is a requirement for the regulation. In many ways, Rosie seems to have intentionally breached the agency agreement that she had entered into with Simon by withholding information and not honouring the commissions that Simon has an entitlement to. Further, their contract also stated that Simon was to receive an indemnity payment once their contract terminated to which Rosie did not intend to pay up alongside with his commissions2. For Simon, this provides a basis for him to seek justice because the Commercial Agents Regulation requires that a principal pay commission and indemnity payments to the agent irrespective of whether losses were incurred or not during the time of the contract. However, the best thing about the contract that Rosie and Simon drew up is that it stated the percentage entitled to the agent that which the principal has to automatically pay as required by the regulation. Rosie has indicated that Simon cannot act as a commercial agent for any other principal simply because she has barred him, which is not acceptable in relation to the regulation. One of these reasons why this does not bind Simon is because she had not stated this provision in the agency agreement that she went into with Simon. The implication of this is that Simon is free to work with any other principle that he desires because he would not be going against his contract with Rosie in any way. However, Rosie’s barring of Simon of working for, another principal for a period of two years and not three years could have held water if she had included the restraint of trade provision3. The provision if included could have been effective post-termination and Simon would have been legally bound by this contract to not act as a commercial agent for the stated period if Rosie had included the clause in writing. Simon when seeking for compensation should receive indemnity that is equivalent to his one year gross commission. In essence, Rosie is likely to be at a loss because she did not allow Simon to work for at least a year and made their agreement to end prematurely and the indemnity is still calculated on an annual basis. Therefore, Simon has grounds to seek compensation from Rosie because a breached contract and for the commissions that he rightfully earned and were in the agency agreement that they had agreed to. Part 2 The Sale of Goods Act 1979 is a piece of legislation that protects consumers in case the goods they buy become faulty and gives them rights when something goes wrong after making the purchase. As per the Act, the goods that consumers buy should be satisfactory in terms of quality, match the description attached to them and serves its purpose4. Mary Alice has minimal knowledge in paintings. She was not aware that the painting that she intended to buy was not the original piece. Pierre, who is an expert in paintings confirms that the painting by ‘Monay’ that Mary Alice notices that the painting is a fake. Based on this, Mary-Alice can make a claim based on the provisions under the Sale of Goods Act because the painting did not meet its description after later scrutiny. The claim can that she can launch based on this act allows her to ask for a repair on the painting, replacement since it is not the original painting that she sought, receiving part of her money back or a complete refund5. The painting also fell and broke because the ones that were mounting it relied on the instructions by Arted plc on the painting being mounted using two instead of three wall fixings as per its weight. The Act states that compensation or repair cannot be instituted if the purchaser damaged the good they bought themselves. However, the misleading instructions by Arted plc the supplier at fault because they gave the wrong instructions on how the painting is to hang based on its weight. Additionally, Simon did not point out that the painting was not the original piece or had any faults, meaning that Mary-Alice did not make a purchase with this understanding. When the painting fell, it broke Pierre’s foot, making the supplier of the painting to be liable for the damage that the improperly hang painting brought as stipulated in the Consumer Protection Act 1987. Mary-Alice is protected by this legislation as she does not have to prove that the supplier was negligent on their part because the law has a strict liability provision6. Based on this, Arted plc is solely responsible for Pierre’s injuries because the product proved to be unsafe as stipulated in this regulation. While Mary-Alice is seeking compensation for the broken painting, Pierre should seek being awarded damages because the painting that belonged to Mary-Alice and was faulty brought harm to him. Mary-Alice can also seek to be awarded damages because the painting damaged her hardwood floor, which the Consumer Protection Act provides for. Mary-Alice realized that the product was defective after receiving expert insight from Pierre as it also emerged that the product was not safe. The Consumer Protection Act states that a defect in a product is the element that makes the product to be unsafe as compared to the expectations of the consumer. Mary-Alice can make a claim based on this provision as the painting was not safe because it damaged her hardwood floor and also created a personal injury to her friend. The process of getting her money back might be tricky, especially if she reports the case much later. For this reason, Mary-Alice should not keep the painting for too long after it has broken, as this can make the process of getting her money back challenging. Mary-Alice should also not try to fix the broken painting as this can make her not to get her money back when she makes a claim. In an extreme case, Mary-Alice can report to the Trading Standards if she feels that the painting was unsafe and avoid using it. Based on these legislations, Mary-Alice is a protected consumer because she has rights accorded to her when she bought the painting. The Consumer Act, for instance, requires that suppliers put accurate information on the packaging of the product that will not mislead them and bring potential harm to them7. The act also protects Mary-Alice against fraud among a list of other business activities that the European Union laws protect consumers against. If Mary-Alice had received accurate information about the painting as recommended by the Sale of Goods Act then possibly all these events could have been avoided. Arted entered into a contract with Mary-Alice as per this regulation. For this reason, Mary-Alice had rights in case the product she bought did not satisfy her8. ‘Monay’ is not a party to this claim because in this case she is the manufacturer of the painting, but instead Mary-Alice should seek claim from the retailers who are Arted plc as stipulated by the Sale of Good Act. She also has a right to have the painting replaced or repaired as this is also her right. Bibliography Brownlie I, Principles of Public International Law (Oxford University Press 2003). Carr I and Kidner R, Statutes and Conventions On International Trade Law (Cavendish Pub 2003). Christou R, International Agency, Distribution, and Licensing Agreements (Sweet & Maxwell 2003). Dobson A, Stokes R and Dobson A, Commercial Law (Thomson Sweet & Maxwell 2008). Hogarth R, Insurance Law for the Construction Industry (Oxford University Press 2008). Lunney M and Oliphant K, Tort Law (Oxford University Press 2008). Rose F, Blackstones Statutes on Commercial & Consumer Law 2014-2015 Tillson J, Consumer and Commercial Law (Pearson Longman 2011). Read More