Kinds of Mercantile Agents or Agent Middlemen
1.
Brokers
2.
Factors
3.
Commission Agents
4.
Del-credere Agents
5.
Auctioneers
6.
Warehouse keepers.
A Broker is one who bargains for another
and receives commission for his service. He is paid ‘brokerage’ for his
services .He brings buyer and the seller to the negotiating process and
arranges for finalising contracts between them. The principal businessman does
not pass on either possession of goods or the ownership of goods to the broker.
The broker is not personally liable for the contracts concluded.
Clothing, furniture, food, and
commodities such as timber and steel are often sold by brokers. They are
assigned to different geographical territories by the producers with whom they
work as they have excellent industry contacts .The most common form of agent
and broker encountered by the consumers are functioning in real estate sector.
A real estate agent acts for both the buyer and the seller.
A factor is a mercantile agent to whom
goods are entrusted for sale by a principal. He takes physical possession of
the goods, though he does not obtain ownership of the goods. A factor sells
goods in his own name without revealing the name of his principal. He may even sell
them on credit and other usual terms. He is entitled to receive payment for the
goods sold and he gives valid receipts. He is liable for his action. He can sue
or be sued for his contracts. He has a right of lien on goods in his possession
for his unpaid charges.
A commission agent buys and sells goods
on behalf of the principal for a fixed rate of commission for all his
transactions. All risks connected with his transactions are borne by the
principal. His functions are more varied than a broker and he takes decision
over the prices and terms of the sale. He has expert knowledge of the goods and
trends in the market. He takes possession of the goods without title over them
and sells in his own name.
The agent who guarantees to the
principal the collection of cash from credit sales is called del-credere
agent’. If they do not pay, the agent would bear the loss himself. He is given
an additional commission known as del-credere
commission for bearing the risk. He carefully selects the
buyers to whom credit can be extended based on their honesty and reliability.
Auctioneers are agents who sell goods by
auctiononbehalf of their principals. Auction sale is made through a
notification to the public. The notice clearly mentions the date, time, place
and details of goods which will be widely published through newspapers,
posters, leaflets and announcements etc., Auction sale may be “WITH RESERVE”
and “WTIHOUT RESERVE”. In case of auction “WITH RESERVE” no sale can take place
below the minimum price fixed by the seller, which is known as “Reserve Price”.
In case of auction “WITHOUT RESERVE” the auctioneer is bound to sell the
product to the highest bidder. The price for which the bid is accepted is
called “knocked down price”. Striking a hammer on the desk indicates the
acceptance of a bid by auctioneer. After the highest bid is accepted, the
auctioneer becomes the agent for both the seller and the buyer. For his
services, the auctioneer is entitled to receive a commission, which is a
certain percentage of the sale proceeds.
A Warehouse keeper accepts goods for the
purpose of storage in his warehouse. He should exercise reasonable care and
diligence in the storage of goods. He is entitled to payment for his services.
He will have lien on the goods in case the payments for his services remain
unpaid. The warehouse keeper delivers to the owner of the goods a receipt known
as warehouse keeper’s receipt or certificate. It is an acknowledgement issued
by warehouse keeper for the receipt of goods by him for the purpose of storage.
It is not a document of title to goods. He may issue a ‘Warehouse warrant’,
which is a document of title to goods
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