Agency Agreement in Israel: Template, Key Clauses and Local Law (2026)

A commercial agency agreement appoints an agent to find customers and promote a supplier's goods or services in return for a fee. In Israel this is not purely a matter of contract. A dedicated statute protects the agent when the relationship ends, and that protection cannot be contracted away to the agent's detriment. If you are a supplier appointing an Israeli agent, the exit is the clause that will cost you if you ignore it. This guide explains the law, the key clauses and a skeleton. It is general information, not legal advice; take Israeli counsel before you sign. ## What counts as a commercial agent in Israel? An agent promotes a supplier's products and brings in customers, but does not buy and resell on its own account. That distinction matters because Israel treats agents and distributors differently. The main statute is the Agency Agreement (Commercial Agent and Supplier) Law, 5772-2012, which took effect on 27 April 2012. General agency and contract principles also come from the Law of Agency, 5725-1965, and the Contracts (General Part) Law, 5733-1973. ## The protection every supplier must plan for The 2012 law exists to protect agents who build a market and a reputation for a supplier. Two features drive almost every decision: - Compensation on termination. When the agreement ends, the agent can be entitled to compensation for the new customers it brought in, and for the increased volume with existing customers, where the agent was the effective cause. The compensation is based on the agent's profits and the duration of the agency.

• Minimum notice. The law sets a minimum termination notice, and a supplier's notice cannot be shorter than the notice the agent would have to give. A supplier can, in defined circumstances, buy out the notice period. Crucially, the parties cannot agree terms that reduce these statutory protections to the agent's detriment; they can only improve on them. So a clever drafting trick that strips the agent's compensation will not hold. Plan the economics of the exit before you sign, not after. ## Agent or distributor? The 2012 law covers agents, not distributors who buy and resell on their own account. Israeli courts have, however, applied similar reasoning by analogy to distribution relationships, especially on reasonable termination notice. If your Israeli counterparty takes title to the goods and resells, you are likely in distribution territory, which is governed mainly by general contract law and case law rather than the 2012 statute. Classify the relationship honestly before you draft. ## The law that governs agency in Israel | Area | Governing source | |------|------------------| | Commercial agents (compensation, notice) | Agency Agreement (Commercial Agent and Supplier) Law, 5772-2012 | | General agency principles | Law of Agency, 5725-1965 | | General contract rules | Contracts (General Part) Law, 5733-1973 | | Competition issues (exclusivity, restraints) | Economic Competition Law, 5748-1988 | ## Key clauses in an Israeli agency agreement ### 1. Appointment and scope Name the parties, list the products or services, and define the territory and customers. State whether the appointment is exclusive. Exclusivity has competition-law limits, so keep it reasonable. ### 2. Agent duties Promotion, reporting, minimum activity or targets, and a bar on competing lines. Tie exclusivity to real effort. ### 3. Supplier duties Supply, pricing information, product support and marketing materials, and prompt payment of commission. ### 4. Commission Rate, basis of calculation, when it accrues and when it is paid, and treatment of orders in the pipeline at termination. Clear commission rules reduce later compensation disputes. ### 5. Term and termination Fixed or rolling term, grounds for termination for cause, and a notice period that meets or beats the statutory minimum. Do not try to drop below the floor the 2012 law sets. ### 6. Termination compensation Address the statutory compensation head-on. You cannot waive it, but you can define commission and records clearly so the calculation is predictable and disputes are narrower. ### 7. Confidentiality and non-compete Protect pricing and customer information. Post-term non-competes are tested for reasonableness under Israeli law; keep them narrow in scope and time. ### 8. Governing law and disputes Israeli law will usually govern an Israeli agency. Choose the courts or arbitration and a language. ## A short agency agreement skeleton 1. Parties and recitals

2. Definitions
3. Appointment, products and territory (exclusive or not)
4. Agent obligations and targets
5. Supplier obligations
6. Commission and payment
7. Confidentiality and non-compete
8. Term and termination (notice at or above the statutory minimum)
9. Termination compensation (acknowledging the statutory right)
10. Governing law and dispute resolution
11. Signatures Use this as a structure to adapt with Israeli counsel, not a finished contract. ## Common mistakes - Drafting a waiver of termination compensation. It will not hold; the protection is one-way in the agent's favour.

• Setting a notice period below the statutory minimum.
• Confusing agency with distribution and applying the wrong rules.
• Over-broad non-competes that a court will not enforce. ## Keeping the agency and its exit in one place An agency agreement is mostly about what happens when it ends: the notice you owe, the compensation you cannot avoid, the commission still in the pipeline. Teams that bury these terms in a signed PDF are the ones that misjudge the cost of termination. The idea behind an AI contract workspace is to hold the agreement, its versions and its key dates in one place: draft from a tested template, see each clause flagged where it carries risk (such as a notice period below the statutory floor), edit clauses in plain language, and keep a live timeline of commission and renewal dates. On jurisdiction depth, Adira is India-first today with other jurisdictions on its roadmap, so for Israel-specific drafting it supports the workflow while local-law depth is built out; you can read more at Adira. One source of truth makes the one clause that matters, the exit, impossible to forget.