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Commercial Agency Agreement for United Arab Emirates

Commercial Agency Agreement Template for United Arab Emirates

A comprehensive legal agreement governed by UAE Federal Law No. 18 of 1981 (Commercial Agency Law) that establishes a commercial agency relationship between a foreign principal and a UAE-registered agent. This agreement authorizes the agent to distribute, sell, or offer products/services within a defined territory in the UAE, and must be registered with the UAE Ministry of Economy to receive legal protection. The document covers essential elements including appointment terms, territory definition, commission structures, obligations of both parties, and termination provisions, while ensuring compliance with UAE's strict agency laws that provide significant protection to registered agents.

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Commercial Agency Agreement

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What is a Commercial Agency Agreement?

The Commercial Agency Agreement is a crucial document for foreign businesses seeking to establish a commercial presence in the UAE market through local representatives. This agreement type is specifically regulated under UAE Federal Law No. 18 of 1981 and its amendments, requiring mandatory registration with the Ministry of Economy to receive legal protection. It's particularly important as UAE law provides significant protection to registered commercial agents, including potential compensation upon termination and exclusive territorial rights. The agreement must detail the scope of agency, territory, commission structure, and parties' obligations while ensuring compliance with local laws. It's commonly used when foreign companies cannot or choose not to establish direct operations in the UAE, instead partnering with local agents who have the market knowledge and connections to effectively represent their interests.

What sections should be included in a Commercial Agency Agreement?

1. Parties: Full legal names and details of the Principal and Agent, including trade license numbers and registered addresses

2. Background: Context of the agreement, brief description of the parties' businesses, and their intention to enter into an agency relationship

3. Definitions: Detailed definitions of key terms used throughout the agreement, including Products, Territory, and Intellectual Property

4. Appointment and Scope: Terms of agent appointment, whether exclusive or non-exclusive, and detailed scope of authority

5. Territory: Precise definition of the geographical area covered by the agency agreement

6. Duration and Renewal: Initial term of the agreement and conditions for renewal or extension

7. Rights and Obligations of Principal: Detailed responsibilities of the principal, including supply obligations and support to be provided

8. Rights and Obligations of Agent: Comprehensive list of agent's duties, including marketing, sales, and customer service obligations

9. Financial Terms: Commission structure, payment terms, and currency specifications

10. Intellectual Property Rights: Usage rights and restrictions regarding trademarks, trade names, and other IP

11. Confidentiality: Obligations regarding confidential information and trade secrets

12. Termination: Grounds for termination, notice requirements, and post-termination obligations as per UAE law

13. Governing Law and Jurisdiction: Specification of UAE law as governing law and jurisdiction for disputes

14. Registration: Provisions regarding registration with UAE Ministry of Economy and related requirements

What sections are optional to include in a Commercial Agency Agreement?

1. Performance Targets: Specific sales targets or KPIs, used when principal wants to ensure minimum performance levels

2. Marketing and Promotion: Detailed marketing obligations and cost sharing arrangements, if specific marketing commitments are required

3. Training Requirements: Provisions for training of agent's personnel, if product/service requires specific expertise

4. Sub-Agents: Terms for appointment of sub-agents, if permitted

5. Insurance: Insurance requirements and coverage specifications, if required for high-value or high-risk products

6. Compliance: Anti-bribery, sanctions, and other compliance requirements, particularly relevant for international principals

7. Product Support: Detailed provisions for after-sales service and warranty support, relevant for technical products

8. Minimum Stock Requirements: Stock holding obligations, relevant for product distribution agreements

9. Data Protection: Specific data protection and privacy requirements, particularly important if handling customer data

What schedules should be included in a Commercial Agency Agreement?

1. Products Schedule: Detailed list of products or services covered by the agreement

2. Commission Structure: Detailed breakdown of commission rates, calculation methods, and examples

3. Territory Map: Detailed map or description of the geographical territory covered

4. Performance Metrics: Detailed KPIs and measurement methodologies

5. Technical Requirements: Technical specifications and standards to be maintained

6. Brand Guidelines: Principal's branding and marketing guidelines

7. Required Documentation: List of documents required for UAE Ministry of Economy registration

8. Approved Sub-Agents: List of pre-approved sub-agents if applicable

9. Service Level Agreement: Detailed service standards and response times

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Publisher

Ƶ

Document Type

Agency Agreement

Cost

Free to use
Relevant legal definitions




































Clauses









































Relevant Industries

Manufacturing

Retail

Consumer Goods

Industrial Equipment

Technology

Automotive

Pharmaceuticals

Fashion and Luxury Goods

Construction Materials

Electronics

Food and Beverage

Healthcare

Telecommunications

Relevant Teams

Legal

Commercial

Business Development

Sales

Compliance

Operations

International Business

Corporate Affairs

Distribution

Channel Management

Relevant Roles

Chief Executive Officer

Commercial Director

Business Development Manager

Legal Counsel

Contracts Manager

Sales Director

General Manager

Corporate Lawyer

Regional Manager

Compliance Officer

International Business Manager

Operations Director

Distribution Manager

Channel Manager

Chief Commercial Officer

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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