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Commercial agency agreement (Scotland)

Under a commercial agency agreement, a business appoints an agent to negotiate sales or find customers for it, paying commission in return. If the agent negotiates sales of goods, the Commercial Agents (Council Directive) Regulations 1993 confer rights on the agent that the parties cannot contract out of, among them a minimum period of notice and a payment once the agency comes to an end.

Prepared by a retired English qualified solicitor (LLB, LLM) · reviewed 24 September 2026 · Scots law · how we draft · recent changes

When you need one

You need one when engaging a self-employed sales agent, or acting as one. Someone who buys products and resells them in their own right is a distributor, not an agent.

What it should contain

Appointment

The products and territory covered, and any exclusivity.

Authority

Whether the agent may sign contracts or only negotiate them.

Commission

Rate, basis, and when commission is earned and payable.

Duties

Mutual good faith duties, which the Regulations impose for agents dealing in goods.

Termination

Periods of notice at least as long as the minimums set by statute.

Payment on termination

A goods agent's indemnity or compensation.

Points specific to Scotland

The same 1993 Regulations apply in Scotland, and the Scottish courts have applied them, for example in King v T Tunnock Ltd (2000). If the parties want Scots law to govern, the agreement should say so expressly.

Different rules can apply elsewhere in the UK: see the England and Wales version of this guide.

Common mistakes

Overlooking a goods agent's right to an indemnity or compensation once the agency ends. Compensation is the default position and is not capped.
Notice periods that fall below what the Regulations allow.
Restraints after termination lasting over two years.

Look at a specimen commercial agency agreement, a concise example of the overall structure and principal clauses, set out in the same way as the app's output.

Quick answers

What is the difference between an agent and a distributor in Scotland?

An agent introduces customers to the principal, which sells to them itself and pays the agent a commission. By contrast, a distributor purchases the products and sells them on for its own account.

Can a principal avoid paying compensation to an agent in Scotland?

Not for a goods agent within the Regulations, save in a few limited situations, for example termination because of the agent's serious breach. If the parties opt for an indemnity, the amount is capped.

Prepare your commercial agency agreement today

Be Contract Wise (Scotland)'s powerful, carefully prepared drafting tools turn a short set of plain-English questions into a commercial agency agreement under Scots law, laid out to a professional standard, with an explanation of every clause. Simple or complex, export to Word or PDF.

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Reviewed 2026-09-24. General legal information about Scots law, not legal advice.