Commercial Agency Contracts in Malaysia

The contract of commercial Agency is one of the most used agreements in international trade. In the European Union the legal framework is set by the Council Directive 86/653/EEC, but there are still significant differences among national regulations and jurisprudence of the Member States. Outside the EU, commercial Agency is often not regulated by a specific law or can be subject to laws at the federal or state level. In most countries even if the Parties are free to choose the law applicable to an international Agency agreement and the dispute settlement method, certain provisions provided by local laws cannot be opted out. And while the Agent is usually entitled to a goodwill (clientele) indemnity upon termination of the contract, such indemnity in some countries can be excluded. When negotiating an international Agency contract, therefore, it is very important to know what the available options are, which law is most favorable for the interests of the Principal or the Agent, what provisions cannot be derogated, which is the best jurisdiction for dispute resolution, and so on. In this Guide our legal experts provide some practical answers and advice.