With the above in mind, here are seven key points that you should be aware of when dealing with US agency agreements:

1. Each state has different laws

One thing to remember is, unlike England where we operate under one law of the land, in the US the agent/principal relationship is defined and governed by individual state law, rather than by US federal (national) law. Therefore, depending on which state you are contracting in the relevant laws can be different. Below I talk in general terms, but be careful of the individual nuances of particular states.

2. Pay commissions, on time!

It is true to say that the primary goal of most states’ laws is to ensure that agents, whose contracts are terminated, are promptly paid their commissions. It is really important to remember this as where commission is not paid promptly several states impose penalties on principals of up to 4x the amount of the commission due. What was a small debt can therefore become quite substantial.

3. Get it in writing

Kevin and Cliff refer to whether they enter into a ‘formal contract’. This is worth considering as many states require that the agent must be given a written contract which includes the basis of calculation of commission. As ever, this is good practice - agents should not be retained without a written agreement. By doing this you remove a lot of the chances of confusion over the terms and give yourself documents to "go to" should there be any disputes between the company and the agent.

4. Exclusivity can cause problems

Be very careful if you insist the agent handles your products exclusively. In exclusive arrangements there is always a risk that any agent can be deemed an employee of the business. The potential knock on effect of this is that, not only may the agent accrue employment rights in the US, but also Soshi may be regarded as carrying on a business for tax purposes in the US – obviously not something that your start-up business will want to be worrying about!

5. You’re still liable

The common law of the United States dictates that businesses are required to indemnify their agents against any liabilities of third parties arising out of the actions of the agents (which will include product liability claims). Therefore, Soshi will be "on the hook" for any loss suffered as a result of the actions of the agent (provided the agent is acting within the remit of their engagement). Soshi will also be liable for any claims arising from the use of the games - these won’t be left to the agent to defend in the US. With this in mind, you may want to consider whether you need insurance and whether this covers you in the States.

6. Short notice

It is quite common for US agency agreements to be terminated on relatively little advance notice, for example 30 days. Therefore, strategically you need to make sure that you are not overly reliant on any agent or, if you are, that there is always a compelling commercial case for the agent to keep working with you.

7. It’s all in the contract

There is some good news… unlike UK law, US law does not require any compensation to be paid to a sales agent where the contract is terminated – other than as may be agreed in the contract. This is different to agencies in the EU where regulations give agents employee-like-rights on the termination of certain agency agreements.

Hopefully this helps by flagging some of the key points to bear in mind.