The Gazette 1967/71

emphasis, yet experience has shown that it does not always receive the attention it deserves. A moment's reflection will show the importance of such contractual agreements—with, as a corollary, the dangers inherent in any lack of clarity or definition in the terms in which they are expressed, or any misunderstanding of these terms on either side. Misunderstandings can arise even between parties in the same country who previously have been doing business with each other on a trouble- free basis. If this can happen in say, Ireland, between people speaking the same language and accustomed to the same business practices, obviously there is a substantially greater risk of problems arising when an Irish exporter deals with someone in a foreign country, where there are different trade practices and laws as well perhaps as a different language. Even in the English- speaking world, one frequently finds that particular words and expresssions have different meanings in one country from those attached to them in an other, and this too can be a source of trouble. For exporters entering into agreements with for eign agents the moral, then, is obvious. But there is also a lesson for those who already are parties to such agreements. The absence of trouble in the past is no guarantee that this state of affairs is going to continue indefinitely — indeed, it can be a cause of future problems by fostering a certain casualness in business methods and procedure. The wise exporter will therefore take a second look at his relations with his agent, with special reference to the contractual agreement governing them. First step In appointing a foreign agent the first and most obvious step is to check that a proposed agent possesses the normal essential business qualifi cations—knowledge of the trade or markets in question, financial and personal integrity, and so on. This, of course, is not strictly a legal matter. But sometimes law cases can be seen to have their roots in a lack of attention to this elementary business prudence. The main legal essential is for the Irish ex porter and his proposed agent to be absolutely clear on the terms of the proposed appointment. These must cover matters such as —

1. Definition of the agent's territory. 2. Is the agent to have sole representation rights in the territory—even to the exclusion of the exporter dealing direct with certain reserved customers? 3. Is the agent to have any obligations to do a minimum amount of promotional advertising in his territory and, if so, at whose expense? 4. Is the agent to be authorised to enter into firm commitments on behalf of the exporter or will he merely seek orders which must be referred back to the exporter for official acceptance? 5. Will the agent be required to hold a stock of goods and, if so, on what basis will these goods be made available to him? 6. Apart from sales promotion, what further responsibilities will the agent have in his territory? 7. How is the agent to be remunerated? If on a commission basis, is commission payable on orders accepted by the exporter or only when the accounts therefore have been paid by the customers? 8. Is the agent to be authorised to collect accounts on behalf of the exporter and receive payments in his own name? 9. How may the appointment be terminated? These points may seem so obvious as not to deserve mention—yet many law cases arise simply from the fact that the parties fail to reach clear agreement on such elementary matters. In writing Once the terms of the appointment have been settled in principle the appointment should then be clearly set down in writing and agreed by both parties. It may be that the negotiations for the appointment have had to be conducted through correspondence, and there is quite a file of letters on the subject. It is very important that the official appointment should finally be made by a single document (be it a letter or more formal legal agreement) in which all the terms of the appointment are set out. A series of letters can undoubtedly amount to a legal contract but a 10