As provided for in Article 4 of the UAE Agencies Act, agency contracts must be written and notarized to gain legitimacy. Distribution agreements may be implicit or explicit. The registration of a commercial agent contract governed by Federal Law No. 18 of the United Arab Emirates of 1981 (Commercial Agency Act) with the Ministry of Economy of the United Arab Emirates has the consequence that the commercial agent has market exclusivity. Under the Trade Agency Act, third parties may not import into the United Arab Emirates, without the prior consent of the registered commercial agent, goods, products, finished products, materials or other goods that are the subject of a commercial agency registered with the Ministry of Economy. As a result, only the commercial agent can stop parallel imports that arrive in the UAE through channels other than the registered commercial agency. The term “agent” in most commercial agent laws governs the traditional Western conception of a commercial agent who enters into contracts with third parties on your behalf, but may also, in certain circumstances, include distribution agreements and franchise agreements. We have therefore used the term “agent” in this article to cover common problems that can arise both in traditional agency relationships and in distribution or franchise agreements. Right of non-renewal: Federal Law No. 13 of 2006, which amends the Commercial Agents Act, allows agency contracts that have a fixed term to expire automatically at the end of the period (unless otherwise agreed by the parties). The new law continues to prohibit the appointment of a new commercial agent, unless the registered commercial agent contract on the basis of which the agent was appointed has expired without extension, has been terminated by mutual agreement or terminated on the basis of a final registration judgment.

However, in practice, the Ministry applies the Agency`s unsubscribe procedures described below. The claimant has begun to comply with its obligations under the agreement; However, the respondent waived the right to provide the necessary documents and unilaterally refused to cancel the commercial agent contract of the commercial register. The United Arab Emirates allows distribution contracts to include a provision prohibiting such a transfer of distribution rights. Contracts may include clauses that limit the agent`s right to transfer responsibilities to another party; a breach of this provision may constitute a “material breach” by the agent that would allow the procuring entity to terminate the contract. It is also customary for contracts to contain clauses relating to the appointment of negotiators which allow agents to appoint negotiators where the contracting authority has approved it in writing and the representative is fully responsible for any compensation to the negotiators. It is important to identify all risks before entering into an agency relationship, which is why local advice should always be requested and such advice may be necessary for more than one jurisdiction, as many agreements apply in wider regions. Ultimately, agency law in the region is subject to principles similar to those of Western jurisdictions, i.e. the success of any agency relationship relies heavily on identifying an agent with whom the payer feels comfortable and ensuring that the parties communicate clearly and comprehensively throughout the life of the relationship. Part of this communication will be the conclusion of a clear and easy-to-understand agreement, indicating precisely what both parties expect throughout the relationship and what the consequences of non-fulfillment of their obligations by one of the parties will be.

When the Ministry receives a request from the contracting entity to unsubscribe from a commercial agency, it shall forward the request to the agent and request a response. In cases where the agent agrees to unsubscribe, the ministry will unsubscribe the commercial agency from its registry….

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