Commercial agency is a form of intermediary in commercial activities specified in Section 4, Chapter V of the Commercial Law.
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1. The concept of commercial agent and subject in commercial agency relationship
According to Article 166 of the Commercial Law 2005, commercial agency is a commercial activity whereby the principal and the agent agree that the agent shall purchase and sell goods on its own behalf to the principal or the principal. provide services of the principal to the client for remuneration.
Participating in a commercial agency relationship, there are two parties: the principal and the agent. A principal is a trader who delivers goods to a selling agent or delivers money for purchase to a purchasing agent or is a trader authorized to perform services for a service provider. Agent is a merchant who accepts goods to act as a selling agent, receives money for purchases to act as a buying agent or is an authorized party to provide services. According to the provisions of the Commercial Law 2005, both the principal and the agent must be traders and business lines suitable to the agent’s goods.
2. Commercial agency activities
In commercial agency activities, the principal transfers to the agent money or goods and specific regulations on the price of the goods to be sold, the quantity, quality and price of the goods to be purchased. The agent is free to choose a partner to sign the contract according to the specific provisions of the agency contract. When entering into a contract for the sale of goods with a customer, the agent uses his name and the obligations arising from the contract to bind the agent to the customer. The agent must directly comply with the goods sale and purchase contract signed with the customer: deliver from his warehouse to the buyer and receive money (sales agent) or receive the goods into his warehouse and pay for the goods. to the seller (buying agent). After that, the agent hands over the results of trading activities to the principal.
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3. Agency contract
An agency contract must be made in writing or in another form of equivalent legal validity. According to Article 169 of the Commercial Law 2005, agency contracts include the following types:
– Outsourcing agency is a form of agency in which the agent purchases and sells a whole volume of goods or provides a full service for the principal.
Exclusive agency is a form of agency in which, in a certain geographical area, the principal only assigns an agent to buy and sell one or a number of goods or to provide a certain type of service. .
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General agency for purchase and sale of goods and provision of services is a form of agency in which the agent organizes a system of affiliated agents to carry out the purchase and sale of goods and provide services to the principal. General agent represents the affiliated agent system. Affiliated agents operate under the management of the general agent and in the name of the general agent.