Invicta UK v International Brands Limited  EWHC 1564 (QB)
Invicta was a business run by two partners to import and sell wine in the UK. For this purpose it had supplier listings with major retailers. International Brands wanted to enter the market, but would have trouble being listed as a supplier, so it appointed Invicta as its agent so that it could use Invicta's listing to sell wine to retailers. Invicta was successful, but International Brands terminated the agency contract. Invicta brought a claim under the Commercial Agency Regulations for compensation, to which International Brands responded that Invicta was not a "commercial agent" as it had no "continuing authority to negotiate the sale ... of goods on behalf of [International Brands] or to negotiate and conclude the sale ... of goods on behalf of and in the name of [International Brands] ...", as required by the Regulations.
The High Court (Judge Ralls QC) held that Invicta was a commercial agent. The purpose of the Commercial Agents Directive which was to protect commercial agents. As was clear from previous case law, the word "negotiate" should be construed widely. "The premise of Article 7 of the Directive was that transactions were concluded as a result of the agent's action, including transactions with his own previously-acquired customers. Thus, the activities of a commercial agent extended to procuring transactions and acquiring customers for repeat orders, neither of which needed to include negotiating the terms, provided that the agent acquired business for the principal. Whether the authority was exercised infrequently or not was immaterial unless the continuing authority was withdrawn. The context of the agreement constituted a classic commercial agency. Invicta was to sell goods on behalf of International Brands to customers, and could not perform its duties without such authority. Alternatively, there was an implied term of continuing authority to negotiate on the grounds of obvious implication/necessity or business efficacy."
In practice almost any activity which furthers a principal's business is likely to make the agent a "commercial agent". This decision is consistent with previous decisions where the word "negotiated" has been given a wide meaning. Note that no judgment has been published, so the above summary consists of extracts from the Westlaw report on the case.
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