---

name: prompt-pack-agency-agreement
description: Use when drafting a commercial agency agreement appointing an agent to solicit orders or sell products/services in a defined territory on behalf of a principal. Covers corporate/commercial practice across all jurisdictions, with particular attention to mandatory MENA commercial agency laws (UAE, KSA, Lebanon, Egypt) that override contractual freedom and create registration and termination obligations.
license: MIT
metadata:
id: prompt-pack.agency-agreement
category: prompt-pack
practice_area: corporate-commercial
priority: P2
intent: [drafting, agency-agreement]
related: [prompt-pack-agreement-legal-draft-review, draft-distribution-agreement, draft-nda-unilateral, heuristic-always-state-jurisdiction-first, heuristic-no-us-style-boilerplate-in-civil-law-jx, kb-commercial-agency-mena]
source: Louis — HAQQ Legal AI (github.com/sboghossian/mini-claude-for-legal)
version: "1.0"

Agency Agreement

When to use this

Use this skill when a principal wants to appoint a commercial agent to:

• Solicit orders and/or conclude sales on the principal's behalf
• Represent the principal's products or services in a defined territory
• Act as exclusive or non-exclusive agent for a product line or geography

This skill is particularly important in the MENA context because most MENA jurisdictions have mandatory commercial agency laws that apply regardless of what the agreement says — a governing-law clause pointing to English law does not dis-apply UAE Federal Commercial Agencies Law, for example.

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Prompt template

Draft a commercial agency agreement appointing [Agent] to [solicit orders for/sell] [products/services] in [territory] on behalf of [Principal]. Include commission structure, reporting obligations, exclusivity terms, and compliance with local agency laws of [jurisdiction].

Use [[conversation-clarifying-questions]] to elicit [bracketed] inputs before drafting.

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Required inputs

Input	Why it matters	Default if omitted
Principal name and jurisdiction	Governs registration requirements; determines home-country law	Ask
Agent name and jurisdiction	Critical for mandatory agency-law applicability (must agent be a national?)	Ask
Territory	Defines exclusivity scope; overlapping territories in agency networks create disputes	Ask
Products/services	Registration and exclusivity rules often apply per-product	Ask
Commission structure	Core economic term; percentage, base, calculation method, payment timing	Ask
Exclusivity (yes/no)	Determines agent's rights on termination under mandatory law	Ask; note mandatory-law implications
Governing law	Sets the contractual framework; note that MENA mandatory laws apply anyway	Ask

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Optional inputs

• Duration (fixed term vs. indefinite): critical — in many MENA jurisdictions, indefinite agreements are harder to terminate
• Sub-agency rights
• Minimum purchase/sales targets
• Marketing obligations on agent
• Dispute resolution mechanism (arbitration seat, institution)
• IP licensing linked to agency (agent's use of principal's marks)

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Document structure

1. Parties and recitals — full legal names, jurisdiction of incorporation, registered addresses; recital describing the principal's products and the purpose of the agency relationship
2. Appointment and territory — scope of appointment; territory definition (precise geographic boundaries or named countries); exclusivity or non-exclusivity; carve-outs (direct sales by principal, key accounts)
3. Scope of authority — what the agent may and may not do: solicit orders only vs. conclude contracts; authority limits (order size, price range, credit terms); no authority to bind principal beyond these limits
4. Commission — commission rate; calculation basis (net revenue, invoice value, collected amounts?); payment timing (on order, on invoice, on collection?); deductions permitted; clawback on cancellation; reporting obligations of principal to agent
5. Obligations of agent — due diligence; minimum activity commitments; reporting obligations to principal; compliance with laws; not to represent competing products (exclusivity obligation)
6. Obligations of principal — provide agent with samples, marketing materials, product information; commission payment; not to solicit directly in territory (if exclusive)
7. IP and confidentiality — license of principal's marks for the territory; restrictions on use; return of materials on termination; confidentiality obligations
8. Term and termination — fixed vs. indefinite; notice period; termination for cause; effect of mandatory law (see jurisdictional notes); post-termination obligations
9. Compensation on termination — where mandatory law applies, specify and do not attempt to contract out
10. Governing law and dispute resolution — governing law; arbitration clause (seat, institution, language, number of arbitrators); note that mandatory local law may apply regardless
11. Miscellaneous — entire agreement; amendment; notices; severability; language

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Jurisdictional notes

UAE

UAE Federal Commercial Agencies Law (Federal Law 18/1981 as amended) applies to commercial agents who are UAE nationals or UAE-national-owned companies registered with the Ministry of Economy Commercial Agencies Register. Key mandatory terms:

• Agent must be UAE national (individual) or UAE-national-majority company
• Exclusivity is the statutory default once registered
• Compensation on unjustified termination is mandated regardless of contractual provisions
• Disputes often go to the Commercial Agencies Committee before court

A non-UAE agent acting as a commercial agent (distributing, not just soliciting) may not qualify for the mandatory law's protections but should take legal advice on whether the law applies.

KSA

Commercial Agency Regulation (Royal Decree M/11/1962 and successor regulations under Ministry of Commerce) requires registration. Saudi agents must be Saudi nationals or Saudi-majority companies. The agent has statutory termination compensation rights. Sharia-law prohibition on interest affects commission payment timing and penalties for late payment.

Lebanon

Commercial Code provisions on agency; no separate mandatory commercial agency registration law equivalent to UAE, but agency agreements with Lebanese agents benefit from certain protections under general contract law and labour-analogous protections for long-standing agents.

Egypt

Commercial Agency Law No. 120/1982 applies to distribution and agency. Egyptian agent must be Egyptian national or Egyptian-majority company. Registration at Egyptian Commercial Agency Registry required. Unilateral termination compensation applies.

DIFC / ADGM

Contract law governs. No mandatory commercial agency registration. Freedom of contract applies. Termination governed entirely by the agreement and DIFC/ADGM Contract Law. Much more flexible than UAE onshore.

France

Law No. 91-593 of June 25, 1991 (transposing EU Directive 86/653/EEC) gives commercial agents mandatory indemnity rights on termination. Parties cannot contract out. The indemnity is typically one to two years of average commission.

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Drafting standards

• Do not use "at will" termination without a notice period — in all MENA civil-law jurisdictions, abrupt termination without notice triggers damages
• Do not attempt to exclude mandatory law protections in the termination clause — such clauses are unenforceable and create false comfort
• In civil-law jurisdictions, a penalty/liquidated-damages clause for agent breach must be proportionate; disproportionate penalties may be judicially reduced
• State the commission calculation method precisely — disputes over commission calculation are the most common commercial agency disputes
• Address the treatment of orders placed before termination but executed after — this is a frequent gap

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Common mistakes

• Using a US-style "independent contractor" agreement format without adapting for MENA mandatory agency law
• Assuming the governing-law clause displaces the local mandatory agency law — it does not
• Indefinite term with no notice period — creates termination liability exposure
• No carve-out for direct sales by principal to key accounts (named accounts list should be attached)
• Commission payable "on collection" with no provision for principal-caused non-collection

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Related skills

• [[prompt-pack-agreement-legal-draft-review]] — review an existing agency agreement
• [[heuristic-always-state-jurisdiction-first]] — jurisdiction-first drafting rule
• [[heuristic-no-us-style-boilerplate-in-civil-law-jx]] — avoid US boilerplate in civil-law jurisdictions
• [[kb-commercial-agency-mena]] — knowledge base on MENA commercial agency laws
• [[draft-distribution-agreement]] — when the agent takes title (distribution vs. agency)