Distribution law in Scotland

Generally speaking, the law of Agency Agreements in Scotland is aligned with the law of Agency Agreements in England and Wales. Please see the section on ‘England and Wales’ for further detail.

Scotland, like England and Wales, is subject to the Commercial Agents (Council Directive) Regulations 1993 which prescribes much of the law on agency. Where this does not apply, common law prevails. The courts in Scotland have been increasingly reliant on English case law as the law of Agency Agreements has developed in Scotland. Therefore principles of English agency law have been incorporated into Scots Law bringing the law of agency in the two jurisdictions, for the most part, aligned.

However, there are a number of minor differences in the common law between the law of Scotland and the law of England and Wales in respect of Agency Agreements. These differences between the jurisdictions relate to fairly academic debates around, for example, the following: 

• Equitable remedies for breach of fiduciary duties: In both Scots and English agency law, the Commercial Agent has fiduciary duties towards the Principal. These are duties to act in the interest and for the benefit of the Principal in a relationship of trust and confidence (i.e. the Commercial Agent must put the Principal’s interests above the Commercial Agent’s own interests). Fiduciary duties, however, have their source in English equity law. In England, the Commercial Agent’s fiduciary duties are separate from its contractual duties. Therefore remedies for breach of fiduciary duties are not found in contractual remedies, but are instead found in equity. This does not align well with the law in Scotland (where a division between common law and equity is not recognised), as some equitable remedies have no Scottish equivalent.
• Estoppel/Personal Bar: In most cases agency is established in an express Agency Agreement, but it may also be implied by conduct. For example, in England agency may be implied by estoppel. This is where a Principal acts in a way that leads a third party to believe a Commercial Agent has authority to represent the Principal, and then the third party acts in reliance on that Principal’s representation.  The equivalent of estoppel in Scots Law is the concept of ‘personal bar’. However, in Scotland there is little practical evidence of the existence of agency by personal bar. Despite this, in similar circumstances, the Scottish courts may identify agency arising as implication from the facts and circumstances of a specific situation.