In 1986, the European Communities adopted Directive 86/653/EEC on self-employed commercial agents. In the United Kingdom, this has been transposed into national law in the Commercial Agents Regulations 1993. [12] Thus, agents and principals in a commercial agent relationship are subject to both the common law and the Commercial Agents Regulations. Alternatively, the agency can be terminated as of right: “First, commercial agents and principals must work together in the execution of their agreement to express honesty and openness. Good faith behavior requires each party to take proactive steps to help the other implement its agreement, instead of simply refraining from obstructionist behavior. However, whether a party has acted in good faith cannot be determined by reference to a moral or metaphysical concept of cooperation; that assessment must be based on an objective assessment of the actual relationship between commercial agents. As a result, the intensity of the required cooperation varies depending on the terms of the contract and relevant business practices. The mutual rights and obligations between a client and an agent reflect economic and legal circumstances. A business owner often relies on an employee or other person to run a business. Since, in the case of a company, a company can only act through natural persons, the customer is bound by the contract concluded by the representative as long as the representative acts within the framework of the agency. In Watteau v. Fenwick,[6] Chief Justice Lord Coleridge accepted a statement at Queen`s Bench by Justice Wills that a third party could personally hold a principal he knew liable when selling cigars to an agent acting outside his powers. Judge Wills noted that “the principal is responsible for all actions of the agent that fall under the authority normally entrusted to an agent of that type, regardless of the restrictions imposed between the principal and the agent imposed on that authority.” This decision is strongly criticised and questioned[7], although it is not completely repealed in the United Kingdom.

It is sometimes called “habitual authority” (but not in the sense used by Lord Denning MR in Hely-Hutchinson, where it is synonymous with “implicit real authority”). It has been explained as a form of apparent authority or “inherent agency power.” Apparent authority (also known as “so-called authority”) occurs when the principal`s words or conduct would lead a reasonable person in the third party`s position to believe that the agent was authorized to act, even if the principal and the alleged agent had never discussed such a relationship. For example, if a person appoints a person to a position that involves powers similar to those of an organization, those who are aware of the appointment have the right to assume that there is a clear authority to do the things normally entrusted to a person in such a position. If a customer gives the impression that an agent is authorized but there is no actual authorization, third parties are protected as long as they have acted reasonably. This is sometimes referred to as a “estoppel body” or the “doctrine of perseverance”, which prevents the procuring entity from refusing to grant powers if third parties have changed their positions to their detriment on the basis of the observations made. [5] Agency law is an area of commercial law that deals with a number of contractual, quasi-contractual and non-contractual fiduciary relationships involving one person, the so-called agent, who is authorized to act on behalf of another (the so-called client) in order to establish legal relationships with a third party. [1] In short, it can be described as the equal relationship between a client and a representative, where the client expressly or implicitly authorizes the representative to work under its control and on its behalf. The entrepreneur is therefore obliged to negotiate on behalf of the customer or to bring him and third parties to a contractual relationship. This branch of law separates and regulates the relationship between: the client cannot revoke the representative`s power of attorney even after it has been partially exercised in order to bind the client (§ 204), although he can always do so before this power of attorney has been exercised (§ 203). In addition, according to § 205, if the agency is for a certain period of time, the client cannot terminate the agency before the end of time, unless there is sufficient reason. If he does so, he is obliged to compensate the agent for the damage he has suffered as a result. The same rules apply if the agent gives up an agency for a certain period of time.

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