WHO IS AN AGENT?
The law regulating agency contract in Cameroon is The Uniform Act Relating to General Commercial Law. Article 185 of The Uniform Act Relating to General Commercial Law defines a commercial agent as ” A commercial agent shall be an authorized agent who by virtue of the independence of his profession, shall be charged in a permanent manner to negotiate and eventually conclude contracts of sale, purchase, or lease or service contract in the name and on behalf of the producers, manufactures, traders or other commercial agents, without being bound to them by a contract of employment “
TYPES OF AGENCY CONTRACTS IN CAMEROON
According to Articles 195 and 196 of The Uniform Act Relating to General Commercial Law, there are two types of agency contracts in Cameroon one of the specified durations and unspecified duration.
WHAT IS AN AGENCY CONTRACT AND HOW DOES IT WORK IN CAMEROON?
It is important to know what is an agency contract in Cameroon and how it works in Cameroon
The law of agency serves a lot of significance in the day-to-day running of businesses all over the world. Without the law of agency, there would be an inability to carry out business on a large scale. The following are some of the reasons for the law of agency:
- It helps in the transaction of business over a long distance. For example, If Company A, based in Cameroon, needs to conduct business in Germany, it cannot do so without the help of someone else in Germany that would act as its representative. This other party is its agent.
- The law of agency also helps to narrow gaps caused by disparities in technical knowledge. If for instance, a company is venturing into a transaction in a very technical field like engineering, oil and gas, and so on, it makes use of an agent, who is skilled in that field, to successfully transact its business.
LEGAL IMPLICATION OF AGENCY CONTRACT IN CAMEROON
The legal implication of the law of agency is underscored in the fact that whatever action is done by the agent on behalf of his principal would be binding on his principal.
Thus, in an agency contract, the principal would bear responsibility for the actions of the agent in relation to the contract. However, the agent does not incur liability in the contract he makes on behalf of his principal. Although, since it is a fiduciary relationship, the agent has to act in his principal’s best interest.
AGENCY CONTRACT LEGAL REQUIREMENTS IN CAMEROON
The modes for creating an agency contract in Cameroon can be broadly classified into direct agency contract legal requirements and indirect agency contract legal requirements.
Direct Modes for the Creation of an Agency Relationship
Direct modes are those modes in which both parties consciously agree to the formation of the agency relationship. Under this mode we have:
- Express/written Agreement
- Oral Agreement
An express/written agreement is one that is made in writing. As stated above, there are some situations in which the law requires that the appointment of an agent be in writing. Any agency contract in contravention of these provisions of law would be deemed ineffective.
Oral agreements are those in which the principal appoints the agent by word of mouth. However, it is advised that agency relationships should be outlined in writing. The reason for this is the fact that a written agreement would expressly state the duty and obligations of the various parties. Thus, preventing further ambiguity.
Indirect Modes for the Creation of an Agency Relationship
Indirect modes for the creation of agency relationships are those in which the parties do not consciously agree to the formation of an agency between them. Under Indirect modes we have:
- Implied approval
- Post transactional ratification.
Implied approval in forming an agency relationship can either be through an agency by estoppel or an agency by necessity.
Agency by estoppel occurs in a situation in which the principal represents to a third party, orally or by conduct, that the agent represents him. If on the strength of this statement, the third party significantly alters his position, the principal would be bound by the agent’s actions.
Agency by necessity occurs when a person acts as an agent for another person due to emergency circumstances.
TERMINATION OF AN AGENCY CONTRACT IN CAMEROON
Let me now discuss on the conditions a principal must fulfill before terminating an agency contract in Cameroon. It is trite law that once parties agree on the period of notice in their contract, it becomes binding on them but where there is no agreement on the duration of notice m the period as provided by the law shall apply which must be in
- The notice must be in writing
- Notice should clearly state the reasons for the termination.
CREATE A LEGALLY BINDING AGENCY CONTRACT IN CAMEROON
To create a legally binding agency contract in Cameroon, Article 185 of The Uniform Act Relating to General Commercial Law has imposed certain obligations between a commercial agent and his principal as highlighted below
- The contract shall be concluded in the common interest of the parties
- The contract shall be governed by an obligation of honesty and a reciprocal duty of disclosure of information
- The contract shall be conducted with diligence.
Let me now introduce Article 186 of The Uniform Act Relating to General Commercial Law. It provides and I quote ” A commercial agent shall not be a representative of an enterprise which competes in the same business with one of his principals without the agreement of the latter. “The word “shall” in law connotes a commandment and a breach of this statutory provision can lead to the termination of an agency agreement.
Where there is a breach of duty on any of the parties in an agency relationship, there are a lot of remedies that have been made available by the law.
Article by MAFANY victor NGANDO
“The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.”