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The Principal Agency Agreement is a fundamental legal instrument used in Pakistani business operations when one party (the principal) wishes to appoint another party (the agent) to act on their behalf in business dealings. This document, governed by Pakistani law, particularly the Contract Act 1872, is essential for companies expanding their business reach through representatives. It's commonly used when establishing new business relationships, entering new markets, or restructuring existing agency arrangements. The agreement comprehensively addresses key aspects such as the agent's authority, territorial rights, commission structures, performance expectations, and compliance requirements. It's particularly vital in Pakistan's business environment where agency relationships are common in both domestic and international trade, requiring careful attention to local legal requirements and commercial practices.

1. Parties: Identification of the Principal and Agent with full legal names and addresses

2. Background: Context of the agreement and brief description of the business relationship

3. Definitions: Definitions of key terms used throughout the agreement

4. Appointment and Scope: Express appointment of agent and detailed scope of authority

5. Territory: Geographical area where the agent is authorized to act

6. Duration: Term of the agreement, including commencement date and any renewal provisions

7. Agent's Authority: Specific powers granted to the agent and any limitations

8. Agent's Duties and Obligations: Detailed responsibilities and performance requirements of the agent

9. Principal's Obligations: Responsibilities and commitments of the principal

10. Commission and Payment Terms: Compensation structure, calculation method, and payment terms

11. Reporting Requirements: Agent's obligations for reporting activities and results to the principal

12. Confidentiality: Protection of confidential information and trade secrets

13. Non-Competition: Restrictions on agent's ability to compete or represent competing principals

14. Termination: Grounds for termination and procedure

15. Post-Termination Obligations: Obligations of both parties after agreement ends

16. Governing Law: Specification of Pakistani law as governing law

17. Dispute Resolution: Procedure for resolving disputes between parties

18. General Provisions: Standard boilerplate clauses including notices, amendments, etc.