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Attorney. Specialist in commercial and labor law. Over 16 years of experience in legal support of businesses - debt recovery, contract enforcement, recovery of damages, commercial property and lease disputes.
Agency agreement
An agency agreement is one of the key tools in modern business. It is an effective way for a company to expand operations and attract new clients. The agency agreement is regulated by the Commercial Code of Ukraine, which outlines its essential content and form.
When should an agency agreement be concluded?
An agency agreement is a commercial mediation contract. It serves as the legal basis for cooperation when one party (the commercial agent) undertakes to provide services to the other party (the principal) by concluding agreements or facilitating their conclusion. Such arrangements delegate specific tasks to the agent and optimize business processes. These agreements are most commonly used in the following service sectors:
- tourism (travel agents sell packages on behalf of a tour operator);
- insurance (insurance agents assist clients in issuing policies on behalf of the insurer);
- transport (various logistics agents arrange shipments, find carriers or passengers, etc.);
- advertising (agents act as intermediaries between advertisers and advertising platforms).
Companies also often enter into agency agreements when doing business in another region or country where they lack direct representation.
Who can act as a commercial agent under the agreement?
A commercial agent is a specific business entity acting under clearly defined legal rules. Today, it can be a party that meets the following criteria:
- is officially registered as a business entity (sole proprietor, LLC, joint-stock company, etc.);
- has the relevant business activity code (KVED), such as 66.22, 79.11, 82.91, etc.;
- concludes agency agreements prepared in compliance with national legislation.
Important! It’s necessary to distinguish an agent from other intermediaries. A commission agent or distributor, for example, are not considered commercial agents.
What clauses to include in an agency agreement?
To ensure effectiveness, an agency agreement must be thoroughly drafted. It must always be in writing and should clearly define the agent’s powers. Specifically, it should state that the agent commits to:
- enter into deals solely on behalf of the principal;
- facilitate the principal’s agreements with clients;
- maintain confidentiality;
The agreement must also include the following clauses:
- remuneration for the agent (with clearly defined amount and calculation method);
- payment terms and schedule (e.g. monthly payments);
- reimbursement of agent’s expenses (e.g. transport, marketing materials);
- rights and obligations of both parties (timely payment, fulfillment of conditions, early termination rights, etc.);
- duration of the agreement and renewal conditions;
- liabilities and penalties for breach (fines, interest, compensation, calculation procedures, etc.).
When can an agency agreement be terminated?
Under Article 304 of the Commercial Code of Ukraine, an agency agreement may be terminated:
- by mutual consent of the parties (formalized by an additional agreement);
- upon agent’s fulfillment of obligations (after submission of an act of services rendered);
- by principal’s revocation of authority (with at least 30 days’ prior notice to the agent);
- by unilateral refusal of the agent (with notice to allow the principal to avoid unnecessary losses);
- upon occurrence of events terminating the agent’s authority (e.g. company liquidation, death of a party).
Important! The parties may stipulate additional termination grounds—typically conditions with significant business risk (e.g. breach of confidentiality, damage to a company’s reputation, etc.).
What additional documents are needed for an agency agreement?
Signing the agency agreement is only the first step. For full legal transparency, it is also necessary to prepare:
- a power of attorney (if the agent acts based on separate authorization);
- an act of rendered agent services (to confirm performance; essential for accounting);
- an agent’s report (basis for remuneration calculation).
Legal support in drafting an agency agreement: what services do our lawyers provide?
Drafting an agency agreement is a complex process. A correctly drafted agreement ensures safe and successful cooperation. Our lawyers offer full legal support in drafting, reviewing, and concluding the agreement. Our services include:
- in‑depth consultations;
- legal contract audit (proofreading);
- drafting an individual agreement;
- preparing supporting documents (additional agreements, service acts, agent’s report, etc.);
- negotiation support between parties;
- notarial certification assistance (if needed).
With us you receive professional support at all stages of drafting and finalizing the agency agreement. To find out the cost of our legal services — please fill out the form below.
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Is a subscriber form of service possible to quickly resolve issues as they arise?
Yes, of course, we take companies for permanent support.
The subscription form of service allows you to receive a full range of legal services on an ongoing basis for a fixed monthly fee.
Our lawyers will accompany all economic legal relations of your company: from drawing up contracts and solving corporate issues to representing interests during inspections by regulatory bodies and in court disputes.
We have very flexible pricing, so contact us and we will discuss your specific case.
Do you work only in Kyiv?
Fortunately, modern technologies allow us to effectively solve almost any legal issue online regardless of your location. In cases where personal presence is necessary, our lawyers are ready to travel to any point in Ukraine. Moreover, thanks to our network of reliable partners abroad, we can provide legal support even in international cases. Our goal is to provide you with quality legal assistance wherever you are.
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