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Commercial Agents Regulations…

Business

… Court interprets them to reflect modern life

Although the Commercial Agents Regulations have been with us for over 20 years, historically they applied only to tangible goods. A recent case, The Software Incubator Ltd v Computer Associates Ltd [2016] EWHC 1587 (QB), 1 July 2016, has held that the Regulations apply to software even if only in digital form.
The judge decided that although software could be intangible it only operated in a tangible way through electronic equipment.   The judge made the point that the decision that software was “goods” for the purpose of the Commercial Agents Regulations did not affect whether it came within the Sale of Goods Act or the Consumer Rights Act.
The case also involved whether the agent, The Software Incubator Ltd, had acted in a way as to allow the other party, Computer Associates Ltd, to terminate the contract for bad conduct but the judge held that the contract had specifically allowed the agent to work for other organisations, so long as those other contracts did not compete with the existing contract. Whilst the agent had cancelled a few meetings and disclosed some confidential information, those breaches were minor and did not entitle Computer Associates Ltd to terminate the agency contract.
The Software Incubator Ltd was awarded compensation of £475,000, it being held that it was irrelevant to the award that the claimant intended to withdraw from the arrangement had the contract not been terminated by Computer Associates Ltd. There is no obligation to mitigate or reduce loss in a compensation award.
If you would like advice in preparing a Commercial Agency contract please contact Nina Wilson.
If you would like advice in how to pursue or defend a claim relating to the Regulations please contact Kevin Rogers.