What distinguishes an Agency agreement from a contract for services?

Relationships in business can assume the conclusion among partners Agency agreements and contracts for services. What are the specifics of both types of contracts? What distinguishes an Agency agreement from a contract for services?

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What is an Agency agreement?

Under the Agency contract is commonly understood as the contract concluded between the supplier or seller of goods or services and a third-party entity (usually an individual) to which the second party provides the first mediation. Most often associated with the conclusion of contracts for the supply of goods or services to customers. In accordance with the Agency agreement, the supplier of goods or services pays a third-party entity a fee — usually a percentage of the transaction amount.

The powers of the agent under this type of contract can be different. Sometimes they are reduced to a minimum amount of action — for example, implementation of document exchange. In some cases these powers involve an agent of a large-scale PR-actions and advertising campaigns to promote a certain product or service or perhaps organization of negotiations with representatives of potential customers.

The agent under the contract is capable of interacting with the target client from itself personally and on behalf of the company with which he signed the contract, is prescribed in the document.

An Agency agreement usually has a validity period. While he has not expired, the partner has to actively work to promote products and services company that delivers them.

In the Agency agreement often spells out the limitations on the rights of the parties to conclude similar agreements with other persons. For example, the supplier undertakes not to employ any other agents to promote a specific group of goods and services. In turn, and for the agent in the contract can make it clear about the inadmissibility of such arrangements with competing vendors.

The most important thing: the supplier is not entitled to restrict the choice of agent methods to attract customers and to determine the territory in which it interacts with customers. This condition of the contract is illegal.

In the considered agreement can be the terms and conditions for the delegation by the agent of its powers to other persons. In the General case they are permitted by the civil law, but the parties signing the contract have the right to include in the agreement a clause prohibiting the relevant delegation. The third party engaged by the agent, is not entitled to conclude contracts on behalf of the supplier — if they don’t have a special power of attorney to perform such actions.

to table of contents ↑What is a contract for services?

Considering the contract is a contract between legal entities or individuals, the subject of which is execution by one party in favor of another certain set of services. For example, consulting, transport, information repair.

Payment for the contract for the provision of services is determined in a fixed form, by agreement of the parties signing the contract. In the General case, it can not be expressed in a percentage of any amount and does not contain the payment terms that are not directly related to a specific list of services that are the subject of the contract.

The criteria for the compensation for the services are also prescribed in the contract. As a rule, they reflect the customer’s requirements to the quality of services based on its typical performance, standards, norms and conditions defined by the parties to the contract.

In General, the contractor under the contract for the provision of services undertakes to solve the tasks personally. But sometimes in the relevant contract spells out the conditions enabling it to attract mates or to delegate the entire amount of the obligations to provide the contracted services to third parties.

The treaties referred to, are often ad hoc, that is, are without duration, in which the contractor will continually provide services to the customer. In some cases, contracts are awarded, having a nominal urgency. But they, as a rule, not binding the parties and executed in order to optimize workflow and reporting.

However, the contract for the provision of services may include items that establish a specific frequency of submission by the contractor of the specific services (or capabilities to provide them to the customer). Such conditions should be considered similar to those formed as a result of the urgency of the Agency contract.

to contents ^ thedifference between the Agency contract and the contract for the provision of services

The main difference of the Agency contract from the contract for services is that the contractor under the first contract work primarily for a percentage of the transaction, and the second — for a fixed compensation.

In most cases, these contracts differ subject. In the case of the first contract — it is narrower, is associated with mediation activities aimed at promoting sales of goods and services of any company. A contract for the provision of services can include a variety of tasks that need to be addressed to the contractor.

Agency contracts are usually for quite a long time, during which the representative of the firm entitled to carry out brokerage activities of any prescribed intensity. The contract for the supply of services, as a rule, single. But sometimes it is prescribed a series of services that the contractor is obliged to provide in accordance with the established periodicity.

Thus in Agency agreements usually do not include the requirement about the frequency of successful intermediary transactions. The fact that they were more interested in the artist — it is due to their number makes.

Note that sometimes the contract to provide services may establish legal relations connected just the same with the representation of the supplier of goods or services, with the negotiation partner’s interests. But in this case, the compensation for the services are mostly calculated in a fixed form, according to the rules specified by the parties to the agreement.

Defining the difference between an Agency agreement and a contract for the provision of services, reflect findings in the table.

to content ↑Comparative table

Agency agreement
A contract for the provision of services

Requires compensation in the form of a percentage of the amount of prisoners with the participation of agent contracts
Assumes a fixed payment payable by the customer to the contractor upon provision of quality services

Is characterized by a relatively narrow subject — mediation and representation of the supplier in the negotiations with potential clients
May include as the subject of the agreement of services of the different economic spheres

May be for a fixed term, during which the agent is entitled to exercise in the interests of its partner’s actions under the contract
The urgency of such agreement is usually irrelevant from the point of view of the consistency of the rendering of services by the contractor

Usually does not include terms for frequency of achieving results the liable party
May include conditions on the periodicity of submitting of results of rendering of services

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