UAE Federal Law No. 18 of 1981 on Commercial Agencies (the Commercial Agency Law) sets out the following requirements for a valid and enforceable commercial agency agreement: parties to a registered agency agreement cannot be satisfied with the provisions of the Agency Act and cannot agree on a foreign law to frame such an agreement. Following the introduction of the Federal Trade Agency Act, there have been doubts about a foreigner`s ability to assert rights under a non-registered distribution/agency agreement. Article 3 of the Agencies Act provides that trade policy agencies that are not registered with the Ministry of Economy are not considered valid and that legal cases are not handled. The early thinking is that the intention of the Commercial Agency Law was to prevent non-ins from acting as agents or distributors of products in the UAE making this area of business the exclusive preserve of UAE nationals. However, the federal trade law clearly refers to agency and distribution agreements and the legal situation is uncertain. Under the Code of Commerce, a party may be a contract agent, a commission agent and a commercial agent. Distribution agreements are also being considered. Finally, there is a “duty to act in good faith” that is implicit in Section 246 of Federal Act 5 of 1985 on civil transactions in all agreements and contracts, which requires the parties to act “extremely faithfully” in the performance of their contractual obligations. The implied duty to act in good faith applies to sales contracts and commercial agency contracts. The Agency Act stipulates that a contractor cannot import, directly or indirectly, through another representative, food products under the agency agreement, while the agreement on the products concerned is registered with the Ministry of Economy.
When a client does, he is required to compensate the registered agent for the commissions earned. There are aspects of the UNITED Arab Emirates Commercial Transactions ACT, which governs distribution agreements in the United Arab Emirates, which overlap and overlap with the UAE Agency Act, which would then be analyzed in detail with the case law. For example, when a merchant is granted the exclusive and exclusive right to sell the client`s product in a given geographic area, in accordance with Section 227 of the Commercial Transactions Act, this may be considered an agency and certain elements of the United Arab Emirates Agency`s law may be applied. Similar provisions of the Commercial Transactions Act often form the basis of disputes and disputes between the parties in such agreements. The most common problem is, for example, the differentiation of agent distributors. This article is an overview of a relatively complex law and highlights the need for contractors and agents to obtain specialized advice before engaging in commercial agency activities in the United Arab Emirates. Distribution agreements under Federal Act 5 of 1985 are governed by the principle of contractual freedom. Therefore, there are no legal restrictions on the legal and jurisdictional decision of the parties as to their distribution relationship. The United Arab Emirates Federal Competition Act (Federal Law 4 of 2012) prohibits “restrictive agreements” such as those that set prices or terms for the purchase or sale of goods and services or that amount to collusion with respect to tenders and tenders, or which have the effect of limiting trade in goods and services on the market or, conversely, flooding the market for these goods.