Nature & Types
Overview
The use of self-employed agents abroad is a long-established method of marketing and selling. The agent concludes contracts for the supply of goods and services on behalf of the exporting firm. The agent usually works on the basis of a commission.
Duties of Agent
The extent of the agent’s authority will depend on the agreement with the domestic supplier. The agent will usually have the power to bind the exporting firm who appoints him in relation to the business concerned. The agent must act in good faith in the course of the agency.
Principal’s Duties
The principal is the person who appoints the agent. In this context, he is the domestic supplier/ exporter. The principal’s duties are defined mainly by the agency agreement.
Commission
At common law, the principal must pay commission on sales and business actually acquired by the agent through his efforts.
Other Agent Types
Continental European countries recognise “commissionaires” as a special class of self-employed commercial agent. This is sometimes referred to in English as a “commission agent” or a “commission merchant.”
A del credere agent undertakes to indemnify the principal for any loss which he may have sustained, owing to the failure of a customer introduced by him to pay the purchase price.
A mercantile agent is an agent who carries stock. He has authority in the ordinary course of his business to sell the goods or consign goods for sale or buy goods or raise money on the security of the goods. Third parties acting in good faith with a mercantile agent are protected against the fact that they may not have title to the goods, under certain circumstances.