Authority is where trouble starts
An agent's actions can bind the company that appointed them, and not always only within the written limits. When a business lets customers reasonably believe someone speaks for it, through titles, email signatures, or past dealings, courts may hold the business to what that person promised. That is why the agreement should say clearly whether the agent can sign contracts and set prices, or only find customers and pass orders along. An agency agreement is also different from a distribution agreement, in which the other party buys the product and resells it, and the label on the document does not always decide which one a court sees. The distinction affects who carries the credit risk, who answers for the agent's conduct, and what each side owes when the relationship ends.
Commissions after the relationship ends
Many disputes between principals and agents are about money claimed after termination. The questions are usually practical: whether commission is earned when an order is placed, when it ships, or when the customer pays, whether the agent keeps earning on accounts they brought in, and how chargebacks are handled. New York has specific rules for certain independent sales representatives paid on commission, including a written agreement requirement and timely payment of earned commissions after termination, and other states have their own versions. If the agent works abroad, local law in some countries gives commercial agents compensation on termination that the contract cannot simply waive. Keep the signed agreement, any amendments, commission statements, and the emails where terms were changed informally, because informal changes are where many arguments begin.
Settling the terms before signing
When we review an agency agreement, we start with what the agent is actually expected to do and match the authority clause to it. We look at exclusivity and territory, how commission is calculated and reported, what happens to pending orders on termination, and which state's or country's law governs. Confidentiality and non-solicitation terms need attention too, since an agent often holds your customer relationships. If a dispute has already started, we look first at the payment records and the termination notice, and at whether the agreement sends disputes to arbitration or to a particular court. The aim is a document that reflects how the relationship works in practice rather than a form that was signed and forgotten.
