Many foreign companies rely on local agents to market their products and services in Kuwait. Kuwaiti law regulates commercial agencies with specific rules that both principal and agent should understand before contracting.
Registration
A commercial agency must be registered with the competent authority to take effect against third parties. An unregistered agent may lose some of the protection the law provides.
Exclusivity
Not every agency is exclusive. The contract determines whether the agent has exclusive rights for a territory or product range, and the exclusivity clause should be drafted clearly to avoid later disputes.
Key terms
- Scope: products, services and territory.
- Term and renewal conditions.
- Sales targets and the agent's obligations.
- Termination events and compensation.
- Governing law and dispute resolution.
Termination
Terminating an agency without a legitimate reason may give rise to compensation. Termination events and their consequences should be carefully addressed in the contract, and the legal position reviewed before any termination notice is sent.
Content on this website is for general information only and does not constitute legal advice.